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NEWS:
Bill Would Freeze
Renewable Energy Mandate
A recently-unveiled bill seeks to freeze the state's
current renewable
electricity mandate, a
move that supporters
believe will give
policy-makers a chance
to review the direction
of the state's energy
strategy.
Under state law, the percentage of electricity that
Delmarva Power and the
state's nine municipal
electricity utilities
are required to supply
from renewable resources
- like wind and solar
energy - must increase
each year through 2025
when "green energy" must
comprise at least 25
percent of the total.
For the compliance year
2011-2012, the regulated
utilities must have 7
percent of their load
supplied from renewable
resources.*
The measure being sponsored by State House Minority
Leader Greg Lavelle (R-Sharpley)
would freeze the
"renewable portfolio
standard" (RPS) at the
proportion the utilities
had achieved as of
January 1, 2012.
"Our energy strategy is flawed," Rep. Lavelle said.
"Despite the dynamic
nature of the energy
market in recent years,
our state policy remains
on autopilot. Freezing
the RPS at current
levels would give us a
chance to step back and
reassess the situation."
Rep. Lavelle said the recent example of Bluewater Wind
should serve as a
cautionary example of
how market conditions
can overtake and
frustrate the best
intentions of
policy-makers.
Bluewater Wind, an NRG Energy venture to deploy dozens of
wind turbines 13 miles
off Delaware's Atlantic
coast, all but died in
late December when NRG
was forced to cancel its
long-term contract to
sell up to 200 MW of the
turbines' output to
Delmarva Power.
Delmarva Power had
agreed to the deal in
2008, in part, to meet
its state-imposed
renewable energy
mandate. Unable to sell
the project, despite its
power purchase agreement
with Delmarva Power, NRG
chose to terminate the
contract rather than
make further financial
commitments to the wind
farm.
"NRG did the prudent thing," Rep. Lavelle said. "They
understood that the
factors that had made an
off-shore wind farm
appear workable four
years ago had changed
and that current
conditions didn't
support it," Rep.
Lavelle said.
State Rep. Jack Peterman (R-Milford), who is a co-prime
sponsor of the bill to
freeze the RPS, agrees.
Citing Delaware's
participation in the
Regional Greenhouse Gas
Initiative (RGGI) - a
10-state "cap and trade"
compact designed to
reduce carbon dioxide
emissions from large
power plants - Rep.
Peterman said
unanticipated changes
have outpaced the
state's policy goals.
He noted that changes at
three Delaware power
plants in recent years
will result in those
facilities producing 30
to 40 percent less CO2
by 2014, far surpassing
the RGGI target of a 10
percent reduction by
2019.
Rep. Peterman noted that this reduction estimate does not
include NRG Energy's
recently announced plan
to replace a coal-fired
generator at its Dover
facility with a cleaner
and more efficient
natural gas turbine by
next summer, the
installation of which
will further decrease
statewide CO2 emissions.
"When the RGGI was begun three years ago, natural gas
prices were on the
rise," Rep. Peterman
wrote in a recent
opinion column. "Since
then, natural gas from a
huge reserve in nearby
Pennsylvania has come
onto the market,
dropping prices and
increasing its
attractiveness as an
alternative to coal."
According to one estimate, Rep. Peterman said Delaware's
participation in the
cap-and-trade program
alone could increase
power costs for Delaware
residents and businesses
by as much as $35
million annually to meet
a goal that has already
been greatly exceeded.
Both Reps. Lavelle and Peterman said the cost of
electricity should be a
top concern for Delaware
officials and is another
reason to launch an
energy policy review.
According to the U.S. Energy
Information Agency
(EIA), Delaware has the
13th highest residential
electricity rate in the
nation (13.8 cents per
kilowatt hour) and the
13th highest rate for
commercial customers
(11.36 cents per kwh).
Federal data also
reveals that when
compared to other
states, Delawareans have
the seventh highest
residential average
monthly bill ($129.07).
"Power costs are one of the top considerations for
businesses," Rep.
Peterman said.
"Businesses in my
district like Sea Watch
International, Perdue
and North American Cold
Storage are all
intensive power users
and the cost of
electricity impacts the
welfare of their
operations at the most
fundamental level."
Rep. Lavelle notes that Delaware has very few
economically viable
renewable energy
resources. Aside from
the 10 MW Dover SUN Park
that went into operation
over the summer, EIA
data shows Delaware's
most significant
renewable resource used
for electricity
generation is methane
captured from landfills.
"The SUN Park, as admirable as it is, would not be
sustainable if it were
not for state and
federal support," Rep.
Lavelle said. "With so
little renewable energy
available locally, the
result of our current
energy policy will not
only drive up the
already high price of
electricity in Delaware,
it will export an
increasing number of
jobs and money to other
states as our renewable
portfolio standard
climbs."
Rep. Lavelle and Peterman say the intent of their bill is
not to compromise the
increased use of
renewable energy. "In
fact, our bill requires
utility companies to
inform their customers
about how they can
increase their use of
electricity from
renewable sources," Rep.
Peterman said.
Both lawmakers say given the rapid changes that have
overtaken the energy
market since 2008, it is
prudent to freeze the
renewable portfolio
standard so the state's
policies can be adjusted
to reflect existing
realities; keep power
prices as low as
possible; and move
renewable energy forward
in a sustainable way
that is supported by
consumer demand, not
state mandate.
* Delaware Electric
Cooperative is not
subject to this
provision, but must
still present a plan for
increasing its use of
renewable energy. |