Representatives:
Please vote against SB 119. It is on your House agenda for today.
HERE IS SS1 FOR SB 119
http://www.legis.delaware.gov/LIS/lis145.nsf/vwLegislation/SS+1+for+SB+119/$file/legis.html?open
Among many other things, this bill requires electric utilities to purchase 25% of their power from renewable sources like solar or wind by 2025. Isn't this a good thing? The answer: probably not.
Why not? Solar and offshore wind are dramatically more expensive than conventional sources. One electric utility tells us their average cost of power is 7.6 cents per kilowatt hour. The prices they have gotten on solar is .27 to .46 per KWH. For offshore wind, which is not yet available, the last suggested price (by Bluewater Wind) was .20 per KWH. There is no indication this situation will dramatically change in just the next few years.
In fact, the price of natural gas, a clean fossil fuel, has dropped like a stone. It is much less than oil, although still more than coal (About $27 for the equivalent of a barrel of oil at $75). This, plus the fact that the Great Recession has dramatically reduced demand, will make it extremely difficult for expensive alternatives like solar and wind to be developed.
The federal government tried to create alternative energy in the seventies, during the energy crisis of that decade. It was a miserable failure. A weak economy drove oil prices down so far it bankrupted alternative energy producers. They couldn't compete and huge government subsidies were wasted. This time, individual Delaware power purchasers will pay the subsidies.
Artificially high energy prices are an economy killer! These prices filter through every aspect of the economy. In particular, they hurt job creators and the middle classes, particularly the unemployed. It is, in effect, a huge regressive tax.
2025 seems like a long way off. In reality, the requirement ramps up each year. Any business that might consider moving here from another state would have to take the long-term costs into account. Why would you move your business to a state that is obviously committed to increasing energy prices?
In conclusion, please leave the existing law in place for the time being, or even consider weakening its terms. We believe Delaware's, and the world's, economic situation is so fragile that raising energy prices in our small state is like playing with fire. All Delawareans may get burned.
Thank you for your consideration,
Rich Collins
Executive Director
302-381-1610
P.S. Delaware government has recently been working hard to get solar & wind power manufacturers to Delaware. They surely understand the economic dynamic outlined above. Is it possible that these laws are just designed to force us to fund these companies and their products, regardless of economic practicality? If so, how many jobs will be killed as companies try to pay artificially bloated energy bills?
