Delmarva Power Submits Bidders' Proposed Term Sheets
Friday, September 14, 2007
Delaware Public Service Commission, State Agencies and Delmarva to
Thoroughly Evaluate Proposals for Long Term Supply
WILMINGTON , DE – Delmarva Power today submitted to the Public Service Commission and Delaware state agencies proposed term sheets from the three bidding parties involved in negotiations over a potential long-term 25-year power supply arrangement for Delmarva’s Delaware electricity customers.
The term sheets filed today represent the bidders' best offers and do not represent final agreements between Delmarva Power and any of the bidders. The bidders, for example, and Delmarva have not reached agreement on critical terms such as the size of the hybrid structure, the price of the electricity, or the start date of the project.
The potential power supply arrangement is a hybrid structure that would consist of a primary 450 megawatt offshore wind farm proposed by Bluewater Wind and 200 to 300 megawatts of natural gas back-up generation provided by either Conectiv or NRG. The two contracts in the hybrid structure, if implemented, could be among the largest the State of Delaware has ever considered. The cost of the electricity provided by the hybrid structure would be paid for by Delmarva's electric customers through contracts with the bidders that would remain in effect for 25 years.
Now that the proposed term sheets have been submitted, both Delaware Public Service Commission Staff and Delmarva Power will each begin their own process of carefully evaluating the complex offers and presenting the results in a manner that will allow all stakeholders to fully understand the complexity and cost of this hybrid proposal. Once this evaluation is complete, Delmarva will be able to fully share the results with the public. It is noteworthy that the cost for the Bluewater Wind bid to Delmarva's standard offer service customers has increased from what was offered in the bids originally submitted to Delmarva, the Commission and the state agencies. This fact, in particular, requires close scrutiny from all those who will be evaluating the proposed term sheets.
Given recent cancellations of other offshore wind projects due to unreasonable costs, we owe it to our customers to provide a thorough evaluation of the impact the potential 25-year commitment would have on them. We look forward to providing the results of our evaluation, which will be open to public scrutiny, as soon as possible.See our Bidders' Proposals.
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Delmarva Power, a public utility owned by Pepco Holdings, Inc. (NYSE: POM), provides safe and reliable energy to more than 500,000 electric delivery customers in Delaware, Maryland and Virginia and over 121,000 natural gas delivery customers in northern Delaware .