Coauthored with John Nichols
Delaware’s political establishment thinks First State electricity consumers should subsidize the manufacturing of super-sized fuel cells, under the auspices of California-based Bloom Energy, to replace natural gas and coal-fired power plants in generating electricity.
The politicos want to build a factory in Newark, where rail service is available to ship Bloom’s 10-ton, 100-kilowatt, “eco-friendly” Energy Servers to presumed eager buyers across America.
Bloom claims its “revolutionary new design” and “breakthroughs in materials science” make its new solid oxide fuel cell (SOFC) technology “clean, reliable and affordable.” Governor Jack Markell, Department of Natural Resources Secretary Colin O’Mara, Department of Economic Development Secretary Alan Levin and assorted legislators insist their plan will create jobs and put Delaware at the forefront of the Green Revolution.
If that’s the case, and if Bloom had a viable business plan, investors would be clamoring to get in on the action. There would be no need to stick Delaware ratepayers with a bloomin’ tariff (“green premium”) that will add at least $600,000,000 to household and business electricity bills over the next 20 years – above what they would pay for electricity generated by combined cycle natural gas plants. There would be no need for the Economic Development Department to contribute another $16,000,000 in startup costs.
Actually, the green premium could be much higher – based on a 2016 “levelized cost” of $215 per megawatt hour for the fuel cell tariff versus $66 for combined-cycle natural gas generators. The $149 difference times 5,200,000 MWh from fuel cells is $774,800,000!
Tariff proponents will likely argue that this cost must be reduced by $426,000,000 in renewable energy certificates (ie, energy taxes) that Delmarva Power is required to purchase under Delaware’s Renewable Portfolio Standards Act. However, this just means the same families and businesses must pay the bill in two ways: as taxpayers and as electricity ratepayers.
In other words, Free State families and businesses will be “free” to pay an extra $600,000,000 to $775,000,000 in any combination of taxes and tariffs they “choose” – for the “privilege” of being able to say part of their electricity comes in a greed or greenbacks shade of green.
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