NRG, the company that submitted one of three energy-generation proposals to provide Delmarva Power long-term supply, questioned last week how those proposals were graded.
The state’s independent consultant and Delmarva Power ranked the three proposals last week on price, reliability of technology, environmental impact and other factors. More of an impact was placed on price than any other factors.
NRG’s “clean coal” plant proposal ranked last, with a Conectiv natural-gas-fired plan ranking first and a Bluewater Wind proposal to build wind turbines offshore ranking second.
In its 36-page filing, NRG called the evaluations “fundamentally flawed” and suggests that the evaluators did not “understand the purpose” of the request for long-term proposals.
The RFP came in response to Delaware legislation approved last year calling for innovative, long-term energy solutions. Legislators were attempting to combat future rises in energy prices potentially similar to Delmarva Power’s on May 1 that hit its residential customers statewide with a 59 percent rate increase after rate caps were lifted.
Rising fossil fuel prices — such as those from natural gas — have been blamed as the culprit. According to Delmarva Power numbers released last year, wholesale prices of natural gas had risen 400 percent since 1999.
In its report, NRG questioned the evaluators’ apparent confidence in natural gas, writing that the recommendation seems to “reinforce the circumstances that the act was intended to correct.”
NRG also questioned why the price category was the most important individual category in the evaluation process. Maximum points available in the price category were 33 — more than the amount of points available in any other single category.
Bluewater Wind officials have also questioned the scoring techniques – especially in the price category — but have not yet filed a formal objection. Jim Lanard, Bluewater spokesman, said the company will submit comments before the March 23 deadline.
Bruce Burcat, executive director of the Delaware Public Service Commission, one of four state agencies reviewing the proposals, said the objections will be noted, as all others would.
“This is not a contested type of proceeding,” Burcat said. “They are certainly permitted to file comments. We’re going to look at them just as we would look at public comments. But the process isn’t going to change to allow for the contested type of preceding which would allow cross examination.”
Conectiv’s proposal to build the nearly 200-megawatt plant north of Wilmington received 68.9 points in the Feb. 21-released independent consultant evaluation. Bluewater Wind, with its proposed 600-megawatt wind farm, received 57 points and NRG’s “clean coal” proposal – which would reduce much of the pollution currently emitted at Indian River and shut down two of the old units — received roughly 24 points.
As expected, Bluewater performed best in the environmental category and NRG’s proposal performed well in the technology innovation category. Both were trumped in the price category, though, by Conectiv’s proposal.
But buying wholesale energy would be less costly for Delmarva Power and its customers than buying from any of the proposals, evaluators found in a 27-year market prediction model presented with the Feb. 21 reports. Delmarva Power recommended denying all of the proposals and continuing to shop on the wholesale market.
An independent consultant’s recommendation was not included in last month’s report but is expected on April 4.
The Public Service Commission and officials from other state agencies plan to discuss the proposals in Dover on May 8 and are likely to make a decision then to approve one, or none, of the proposals.