I Want to Believe

I want to believe. I really do.

I am in favor of energy alternatives that will benefit the environment. I camp, I fish, I visit and enjoy the State Parks in the region and am careful to leave no footprints.

I have followed, to the best of my ability, the goings on in the Legislature and elsewhere on the Purchase Power Agreement (PPA) between Delmarva Power and Bluewater Wind. The machinations of certain legislators aside, I have been trying to form my own judgment with the learned guidance of kavips and TommyWonk.

An excellent history of the proceedings and analyses of the issues can be found here and here.

One of the things that is bothersome about the entire mess is that, in my opinion, legislators do not have the background, experience, or wherewithal to completely understand such a complicated issue. Even those that may advise them, as well-intended as they may be, have difficulty conveying the subject matter in laymen’s terms. Perhaps there are no laymen’s terms.

The Electric Utility Retail Customer Supply Act of 2006 (HB 6) was enacted in part “To stabilize long-term pricing in the DP&L service territory, the Act provides for a request for proposals through a competitive process to build cost-effective merchant generation in the State..”. That is not a mandate for Bluewater, it is a mandate for the process.

And what a process it was. We all know the history, and most have read the December, 2007 DPSC Staff Report. Putting cost issues aside, I found this report to be less than a ringing endorsement due to the risks involved. This is a huge project, using existing technology in a relatively untested geographic area. Additionally, Bluewater has the right to terminate the contract if (1) pending Minerals Management Service regulations are unfavorable, or (2) the Federal Production Tax Credit (PTC) is not extended to cover the construction timeframe.

In other words, without some sort of subsidies, this project would not even be proposed. This is not unusual, as a 2007 study on wind power in Denmark (a leader in the practice) concludes that the without the massive subsidies “the development of wind technology could not have occurred”. I believe that investments should be made for the future well-being of the planet, but how much? And is this the best investment?

Much has been said about the cost of the Bluewater Wind proposal, but little has been said about the benefits. Nowhere have I seen a cost-benefit analysis. Has anyone done a study on the wind data in the area? There are plenty of provisions in the agreement, it appears to me, to allow for the vagaries of the environment, but I am wondering if alternatives have been placed side-by-side in terms of not cost alone, but the associated risks and relative return on the investment. I may not be privy to such analyses if they exist, but take for example the abstract from this 1983 Technical Report in the Energy Citations Database which establishes a methodology for, among other things, “evaluating and comparing total utility system costs, with and without wind plants, and expressing them in terms of wind power plant value and cost.”

Bluewater’s proposal was made based on the assumption that offshore wind power was the answer. Has there been independent research and evaluation of all alternatives that would confirm that offshore wind power is the best solution for Delaware? We can argue back and forth about the megawatts and such and the intricate details of the existing Delmarva/Bluewater PPA, but perhaps we are losing site of the bigger question of whether or not offshore wind power is the best alternative to begin with. This is a huge assumption.

Another thing that bothers me is that advocates for the Bluewater proposal often quote the fact that “90% of Delawareans support it”. The 2006 survey, financed by a Green Energy Fund grant, got 949 responses. That means that approximately 854 people in the State who say they support offshore wind power. With a population of over 850,000, that is 0.10 %. Hardly a mandate. I believe that if I had received that survey in 2006 I probably would have answered mostly in the affirmative. Wind power is just so romantically appealing. But that pesky cost-benefit analysis for all of the alternatives is not fully evaluated. Wishful thinking is not good policy.

I also have great difficulty with the legislature being able to force a contract upon Delmarva Power, simply because it goes against my grain. Both Delmarva and the Independent Consultant hired by the various state agencies involved ranked the Bluewater proposal (actually, twelve variations were submitted) as the second most favorable option, not the first (PSC Staff Report, 12/14/2007). I know quite a bit has happened since then, but the potential for contentiousness probably was ignited at this point. Since then, it has become a point of no return, and if a contract is forced upon Delmarva there is little or no probability of success. It is doomed from the start.

Much of the issue has been obfuscated by assorted power plays, personalities, endless commercials, and at times probably actual personal enmity. Whatever the intrigues may or may not occurred, they cannot be considered. They need to be tossed out completely, and the whole issue of alternative energy needs to be looked at in an unbiased and unemotional way based solely on what is best for the long-term energy future of Delaware. There has been so much water under the bridge that I believe people may become emotionally tethered to their positions.

We need to step back and look at everything anew.

Yes, I want to believe. But I cannot.

Yes, I want an investment in alternative energy in Delaware.

But not this way.