Decision of offshore wind farm could come as early as July 31; Federal regulations critical to wind farm 

Representatives of four state agencies will reconvene Thursday, July 31, and have planned to cast their final vote on a contract between Bluewater Wind and Delmarva Power that could lead to the nation’s first offshore wind farm.

Representatives of the two companies say they are optimistic the state agencies’ representatives will support their contract.

Bluewater Wind and Delmarva Power announced they had come to an agreement June 23, six months after a vote on a draft power purchase agreement between the two was tabled by representatives of the Public Service Commission (PSC), the Office of Management and Budget, the Department of Natural Resources and Environmental Control and the Controller General.

Representatives of Delmarva Power and Babcock and Brown, Bluewater Wind’s parent company, negotiated in private for two months to produce the deal.

An independent consultant for the PSC issued a report July 3 saying under the new agreement, offshore wind power will cost significantly less to consumers than previously anticipated. Changes to the contract were credited with dropping the price to consumers.

Price was one of Delmarva Power’s big concerns with the draft contract.

Delmarva Power spokeswoman Bridget Shelton said, “We’re pleased with the timeline and certainly look forward to receiving the support of the state agencies for this mutual agreement between Bluewater Wind and ourselves.” She said from the tone of the hearings and comments made that Delmarva Power is confident it has that support.

Bluewater Wind spokesman Jim Lanard said, “Bluewater Wind was very encouraged by the strong show of support by the representatives of the four state agencies and the independent consultant. While we don’t want to take anything for granted, we remain optimistic there will be a positive vote on July 31, so we may move on to the next phase of our offshore wind park.”

The final contract is significantly different that the draft that was tabled in December. Delmarva Power will purchase up to 200 megawatts from Bluewater Wind’s offshore wind farm, slated to be put about 11 miles off Rehoboth Beach. That will be half the energy Delmarva Power would have purchased under the original contract.

Bluewater Wind has the flexibility to build a farm that can produce up to 600 megawatts of power that can be sold to other regional buyers.

Changes were made to the state’s renewable energy portfolio requirements, giving Delmarva Power 350 percent credit for each renewable energy credit it purchases from Bluewater Wind. Bluewater Wind will thus have more credits to sell on the open market, giving the company a way to generate more revenues from the project.

Delmarva Power is required to purchase 20 percent of its energy from renewable sources by 2019.

The PSC’s independent consultant noted that the renewable energy requirement changes mean less power will be bought to meet the 20 percent goal, effectively lowering the amount of actual renewable energy Delmarva Power has to purchase.

Public comments will be taken at 7 p.m., Thursday, July 17, in the House Chambers at Legislative Hall in Dover. Written comments may be submitted to the Public Service Commission until July 25.

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Federal regulations critical to wind farm

On Tuesday, July 8, the federal Minerals Management Service released a draft set of regulations on leasing the Outer Continental Shelf – three miles or more off the coast – for energy production, including oil, natural gas and alternative energy.

Bluewater Wind spokesman Jim Lanard said the rules must be adopted for the company to build its project. “We are ecstatic about the draft. There is a great likelihood it will be adopted this year and we can meet our timeline,” Lanard said.

He said Bluewater Wind builds in extra time in its projections to protect the company in the event the regulations are not passed when expected. The regulations are meant to protect birds as well as fishing, boating and other recreational activities, Lanard said. He said the company has the framework it needs to begin working on necessary permits.

By Leah Hoenen

Cape Gazette

11 July 2008