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For Immediate Release
Agreement Completes a Wind Energy Portfolio to Deliver Reasonable Cost, Stable Rates
NEWARK, Del. - Delmarva Power and Babcock & Brown have reached an agreement on a long-term power purchase contract under which Delmarva Power would buy up to 200 megawatts of power from an offshore wind farm to be developed by Babcock & Brown's subsidiary, Bluewater Wind Delaware, LLC. The purchase includes energy, capacity and renewable energy credits.
This contract will be added to a portfolio consisting of up to an additional 170 megawatts of existing, land-based, wind power contracts recently signed by Delmarva Power, all of which are subject to state approval. When blended together, the various wind power agreements will provide customers with a diverse, stable and reasonably-priced pool of clean, renewable resources.
"With the addition of this contract, I'm confident we will meet the aggressive renewable energy goals established by Delaware in 2007," said Gary Stockbridge, President of the Delmarva Power Region. Under the state's renewable energy goals, Delmarva Power must ensure that 20 percent of its electricity supply comes from renewable sources by the year 2019. Delmarva Power is one of the first investor-owned utilities in the United States to have made contractual commitments that will enable it to meet such aggressive renewable energy goals.
"We're comfortable that, through these wind power contracts, we will fulfill our responsibility to provide customers with affordable energy in a way that helps protect and preserve the environment," Stockbridge added.
"Babcock & Brown believes this contract is a significant step toward developing Delaware's first offshore wind farm, which will almost certainly be the first offshore wind farm in the country," said Hunter Armistead, head of Babcock & Brown's North American energy group. "This offshore wind farm will bring clean energy, new jobs, and stable rates to Delmarva Power customers."
Under this 25-year agreement, Bluewater Wind, the state-selected offshore wind provider, could begin delivering electricity to Delmarva Power's Delaware customers around the year 2012. Delmarva Power's customers would buy about half the amount of electricity at a lower overall price per megawatt-hour, as compared to the previous offer.
In addition to the agreement to buy a percentage of the output of the wind farm, Delmarva Power also has agreed, subject to state approval, to implement an optional program that would give Delmarva Power customers the choice to purchase additional offshore wind power.
The costs and benefits of the new contract will be spread among all Delmarva Power customers in Delaware. "Our analysis shows that the monthly price impact upon Delmarva Power's typical residential standard offer service customers has been reduced from about $20 to about $3.50 per month under the new agreement because of the lower negotiated price, smaller amount, and by spreading it across a larger customer base," Stockbridge said. "Avoiding higher costs for our customers has been Delmarva's main concern all along. Now that we have a diverse portfolio of wind supply, a lower cost impact, and a regional approach to this project, Delmarva Power supports this agreement."
Babcock & Brown's Armistead joined Stockbridge in thanking all parties involved in the state-mandated process to site new energy generation in Delaware. Both noted the high degree of interest and participation in the process and said that the outcome reported today was a win for everyone.
Delmarva Power, a public utility owned by Pepco Holdings, Inc. (NYSE: POM), provides safe and reliable energy to nearly 500, 000 electric delivery customers in Delaware and Maryland and over 121, 000 natural gas delivery customers in northern Delaware .