Our legislature's approach to promoting offshore wind power raises serious concerns about deception and manipulation.

 

By David T. Stevenson

Center for Energy & Environmental Policy

April 5, 2024

 

 

Delaware lawmakers have cleverly disguised the costly price of offshore wind power through a draft Senate bill called the "Energy Solutions Act." This bill is a prime example of how to deceive Delawareans and the public by making it seem like a "noble" effort through skillful wording and selective data.

 

Let's start by first examining the title of the draft Senate bill. They cleverly chose the title "Energy Solutions Act," a.k.a. the "Pro Offshore Wind Procurement Act."

 

Of course, when one sees the bill's title, it seems like a "noble" bill on the surface, but as we explore further, beneath its "noble" intentions lie a series of concerning elements and claims that are troubling, which include misleading perception, biased expertise, false claims, opaque bidding process, dismissal of input, and manipulated benchmark prices (see details below):

 

• Misleading Perception: Many negative impressions about offshore wind abound right now, as half the projects failed economically. Beach communities worry about lost tourism and lower property values, and many people worry about the environmental impacts. So, don't put the words "offshore wind" in the title of the bill. Call it the "Energy Solutions Act." Who doesn't want solutions?

 

• Biased Expertise: The proposed legislation includes significant input from the University of Delaware Center for Research in Wind, which has pursued the singular goal of building an offshore wind project off Delaware's coast for over a decade. The center's website summarizes financing from offshore wind developers and federal grants.

 

• False Claims: Claiming offshore wind prices have been falling and that the industry is our future. Factually incorrect! The fact is that nine of eighteen projects have collapsed because their ridiculously high state-guaranteed prices weren't high enough to obtain financing, and recent bids have been 50% to 100% higher. Also, ignore the fact that approved projects face a wall of unresolved litigation. Over twenty years the proposed bill could add almost $3 billion to electric bills, raising residential bills $230 to $350 a year and business rates thousands to millions of dollars.

 

• Opaque Bidding Process: The bill claims to set up a competitive bidding process but bars any direct bidding from other low-emission generating technologies like onshore wind, solar, carbon capture, hydrogen, and nuclear that accomplish the same environmental goals at one-quarter to one-half the cost. Additionally, our Public Service Commission's (PSC) job is to protect ratepayers by using the "Just and Reasonable" standard in its approval process for utility company requests. By redefining the term as any bidding price, the legislation says it would not allow the PSC to determine what "Just and Reasonable" really is. 

 

• Dismissal of Input: The bill announces that various interested parties will review the proposals, but the law says such advice can be ignored.

 

• Manipulated Benchmark Prices: Create an obscure benchmark price determination process and set the data sources to skew potential bids higher in favor of offshore wind companies. The benchmark price will be set using the three-year average costs Delmarva Power has paid for Renewable Energy Credits, plus the three-year average of the winning bids for purchasing electric power known as Standard Offer Service (SOS), plus 10%. That will be compared to the current value of the first-year price of the offshore wind bid.

 

• Cherry-picking data: As unbelievable as it may seem, this is precisely how the draft Senate bill was crafted. For example, the bill uses the most recent three-year price average to calculate up-to-date costs and does not consider the recent Ukraine War's impact on energy prices. Please CLICK HERE to read the full explanation of the bill's cherry-picking data.

 

In summary, the current draft Senate bill, the "Energy Solutions Act," proposed by Delaware lawmakers, presents itself as a promising initiative. Yet, upon closer inspection, various aspects of the bill raise concerns. These include potential misleading perceptions, reliance on biased expertise, promotion of false claims, an opaque bidding process, dismissal of stakeholder input, and manipulation of benchmark prices.

 

As this bill is still in the proposal stage, it is crucial for the public to be aware of these elements and to engage in the discussion surrounding its development. Transparency and scrutiny are essential to ensuring that any future legislation accurately reflects the interests and concerns of Delawareans.