Here is the PDF of the lawsuit on Cause of Action’s website.
Archive for June, 2012
DOVER, DE – Cause of Action, a Washington D.C.-based legal advocacy group, has filed suit today in US Federal Court, District of Delaware, against Governor Jack Markell and five members of the Delaware Public Service Commission.
The Caesar Rodney Institute (CRI), a Delaware-based non-partisan think tank, has challenged the merits of utilizing high-cost Solid Oxide Fuel Cells to produce electrical power for sale to ratepayers of Delmarva Power, Delaware’s largest energy utility provider. CRI was the sole entity opposing the contract between Delmarva Power and Bloom Energy at the Delaware Public Service rate hearings in October of 2011, on the basis the economic impact on Delaware’s economy would be negative because of the contract. CRI has been concerned about the constitutionality of the contract from the very beginning.
Since CRI and John Nichols, a citizen activist, were not able to convince the Public Service Commission to change its views on either the economic or environmental impact of the permit application, Mr. Nichols decided to take his case to the Coastal Zone Industrial Control Board. He challenged the permit application on whether Bloom Energy had the right to build its Solid Oxide Fuel Cell technology in lands that were considered protected for wildlife. CRI funded expert testimony as part of Mr. Nichols’ motion to appear the permit decision.
The Board voted to deny Mr. Nichols standing at the hearing, which allowed Bloom Energy to proceed with installation of its Solid Oxide Fuel Cell units in the Coastal Zone. Mr. Nichols opted to file a lawsuit against Governor Markell and five members of the Public Service Commission, using information CRI provided during testimony. He was joined by Fuel Cell Energy, Inc., a company which makes fuel cells, and which feels it was denied the opportunity to do business in Delaware because of the government’s decision to not open the bidding process to outside companies.
Caesar Rodney Institute
Proponents of Senate bill 263 say the law will help the poor put solar panels on their homes. The real purpose of the law is to sell more solar panels at premium prices. Electric ratepayers, including the poor, will pay $750 million more for electricity over the next dozen years to pay for this new solar requirement. Each job created in the solar industry will cost about two jobs elsewhere. At the same time, the bill manages to violate the U. S. Constitution and a legislative deal cut just a year ago. Delaware already has a solar mandate 10 times higher than the average state east of the Mississippi and we are only one fifth of the way toward meeting it. We don’t need an expansion of this mandate.
Installing solar modules is the most expensive way to help the poor pay their electric bills. Energy efficiency improvements, such as efficient lighting, better insulation, a new hot water heater or furnace, or new windows provide a better return for each dollar spent. This means more people can be helped for the same investment. Programs already exist to help the poor with these energy efficiency improvements and to provide help paying for electric bills. The cost of these programs doesn’t get passed on as higher electric bills to the very people we are trying to help.
Let’s examine the claims made about this proposed law:
Claim: Ratepayers will not see higher costs because of reductions in Alternative Compliance Payments.
Truth: The ACP is a minimum charge for energy credits if they are not purchased from solar electric generators. No one has ever paid an ACP charge for standard Solar Renewable Energy Credits because enough wealthy people have built systems to cover the requirements so lowering the ACP does not save any money. Meeting the new 2.5% maximum will require generating 265,000 LSREC’s a year. That will require 190 megawatts of new solar capacity to generate those LSREC’s. At the current $4/watt installed price the solar infrastructure investment will cost $750 million. The infrastructure cost will be passed onto electric ratepayers through LSREC purchases by electric distributors or from grants paid by taxpayers.
Claim: Jobs will be created for the home-grown solar industry.
Truth: The diversion of money to higher electric rates will eliminate one to six jobs elsewhere for each job created by the solar industry according to multiple studies from around the world. A CRI article titled “Where are the Green Jobs?” discusses this in detail.
Claim: Only energy credits created by solar generators located in Delaware will count.
Truth: Such laws violate the Commerce Clause of the U. S. Constitution and are being challenged in other states. No out-of-state energy credits are registered in Delaware so this exclusion is not needed. When the Fuel Cell Act was passed last year it was known passage would lead to higher electric bills. A deal was made to protect electric ratepayers. Part of the agreement was these higher costs would be offset by requiring the purchase of fewer solar energy credits. It was also agreed no legislation would be introduced to expand the requirement for solar energy credits.
Claim: An energy credit procurement flaw will be corrected.
Truth: The flaw is solar proponents were more interested in the next sale than in protecting existing system owners. Older system owners were cut out of participating in a new, very generous, energy credit procurement process so more new systems could be sold. Owners of existing systems were relegated to the spot market which saw energy credit prices drop from $300 to $25 each (a typical residential system might generate 10 SREC’s a year). Many of these older systems may have been built by wealthy individuals or owners who have already made back their investment. None of them are likely to be poor. Delmarva Power could solve this problem by offering owners of these stranded systems short term SREC contracts at moderate prices. Delaying withdrawal of banked Dover Sun Park SREC’s to future years would leave room for the contracts with no reduction in the number of SREC’s needed from new installations. The contracts would also produce the least expensive contracts Delmarva Power has signed and would lower ratepayer cost for the Renewable Portfolio Standard.
This proposed law would expand the solar carve out in Delaware to 6% of electric power sold in the state, sixteen times higher than the average state east of the Mississippi. New Jersey requires about 3%, Maryland 2.2%, and Illinois 1.5%. Seven states and the District of Columbia require 1% or less and sixteen states have no solar requirement. We need competitive electric rates to compete with these other states and SB263 takes us in the wrong direction.
David T. Stevenson, Director
Center for Energy Competitiveness
Wednesday the House Education Committee tabled HB 380. The purpose of this bill is to revise the Delaware Charter School law by among other things requiring charter school applications be submitted to local school boards for review and consideration, require a face-to-face meeting with the charter school applicant to review and discuss the application, requiring statements about the impact on school district enrollment and financial programs, and eliminating five mile draw boundary.
The objectives of HB 380 seem reasonable until questions from House Members and testimony by the Charter Schools Network, CRI, Department of Education and other interested groups pointed out issues with the bill. Problems that include the application process, impact statements, administration of lotteries, the emphasis on the system taking focus away from the student, the logistical impact on families that would have made teacher and parent interaction difficult if not impossible for some, and the potential for influence by unions and other special interest groups with specific agendas.
Rep Jaques’ intent was to start a conversation about Charter Schools and to promote a more civil discourse. He accomplished his purpose and after hearing all the discussion decided the bill should be tabled.
The focus now switches to Rep Schooley’s ‘blue ribbon’ committee on Charter Schools. She briefly outlined her plan at the end of the discussion on the Charter School Bill.
CRI is disappointed she continues to focus on one small part of the overall education system. A part that is less than 10% of the total K-12 enrollment, has some really stunning successes, and has a 58% minority enrollment. We agree they can be even better however they do not deserve the attention given them particularly when the larger problem of how poorly prepared students are for college or careers.
The focus must be on how to improve the education experience and results for all children in the total system including charter schools.
Over the past few years across the country there has been a revolution in innovation. Charter schools were created nearly twenty years ago to improve total student learning and to encourage different and innovated learning methods in exchange for being freed from some onerous regulations and influence; but charters are not enough.
Today innovation challenges the model of single or limited school choice. One model just doesn’t fit the diversity of student and family issues when there are available many different methods with private, religious, home schooling, virtual schooling – creative greenfield approaches that have the potential to overcome the lack of change over the past 50 years and overcome the ‘tuition barrier’ by opening up more funds for parents in all income levels to pay for the best education for their children.
Over next few months CRI will feature some of these through profiles, You Tube video and print articles.
And, CRI needs your support – make your concerns known to your elected representatives. The focus must be on renewing the total school system and expanding the opportunity for all to share the benefits of a great education system.
James E. Hosley
Director, Center for Education Excellence
Yesterday, the Coastal Zone Industrial Control Board voted to uphold Secretary O’Mara’s decision to grant Bloom Energy the right to build their Solid Oxide Fuel Cells, called Bloom Boxes, on nine acres of land near the coastal zone. Bloom Energy says their boxes will be good for the environment, will lower energy costs, and will create jobs in the state. The Board decided this was good enough for them, and denied John Nichols standing, despite the fact that five hours earlier they voted 4-3 with 1 abstention to allow him standing to make his case.
We are disappointed, but not surprised, by the decision made by the Board. More than half of voting board members were appointees of the governor’s administration, whose appointees in DNREC are behind the decision to give Bloom Energy over $550 million in taxpayer subsidies to build their technology on land occupied by wildlife uncommon to the state of Delaware. Additionally, the decision means Delmarva Power customers will be on hook for over $620 million over the next 21 years to help subsidize the Bloom Boxes, as part of a deal Delmarva Power reached with the state and Bloom Energy.
We feel this is the incorrect decision. During testimony, despite repeated objections from the other side and from DNREC, we were able to show the public how secretive Bloom Energy was on their technology. Admitting they never shared with the public or DNREC what is actually in their boxes, we exposed their box’s use of rare earth metals from China that are part of the box’s manufacturing, and the byproduct is hydrogen sulfide- a poisonous gas. Forcing Delaware taxpayers, and Delmarva Power customers in particular to pay more than triple for less clean air and less efficient energy sources is not how Delaware needs to go about fixing our energy problem. Furthermore, the lack of transparency between the government and Bloom Energy Corporation was appalling to those of us who believe in an open government, and in free-market principles, where everyone has the right to do business in the state, not just the chosen ones.
The votes from the board members:
Robert Wheatly- voted against giving Mr. Nichols standing after he had already been granted it.
Albert Holmes- voted against giving Mr. Nichols standing
John Burton, SR- voted against giving Mr. Nichols standing
Peter Jamison-voted against giving Mr. Nichols standing
Richard Legatski- voted against giving Mr. Nichols standing
Stanley Tocker- abstained from voting
Robert Bewick-abstained from voting
Dr. Pallatheri Subramanian PHD- voted against giving Mr. Nichols standing
Caesar Rodney Institute
Please read the following from David Stevenson, CRI’s Director for Energy Competitiveness:
In August 2011 the Public Service commission approved PSC Docket No. 11-362 providing for Delmarva Power to purchase electrical power to be supplied by the Bloom Project Company, a privately held company headquartered in Sunnyvale, California, from their proprietary solid state fuel cells. Bloom’s fuel cell units are to be assembled on the site of the former Chrysler automobile assembly plant, located in Newark and owned by the University of Delaware. The power supply commitment spans 21 years with projected revenue from electric ratepayers of approximately $1.1Billion.
Caesar Rodney Institute was the only intervener at the public service commission hearing requesting denial of the new rate tariff, arguing that it would increase the cost of power to Delmarva’s customers by up to $35 Million a year over the life of the contract versus power from conventional sources. Delmarva’s customers will be billed a $2 Million premium in the second half of this year for fuel cell power from just 10% of the proposed project. Ratepayers will also pay $17.5 Million for infrastructure upgrades needed to support the entire fuel cell project. In addition, Delmarva ratepayers will pay a $19 Million premium this year for other “green” programs such as wind and solar energy credits, regional cap and trade permits, and Green Energy Fund grants. These expenses are not shown separately on Delmarva Power electric bills.
Under the terms of the above Docket approval, Diamond State Generation Partners, LLC, a Bloom Energy affiliate, plans to install 235 Bloom Energy solid oxide fuel cells requiring 9 – 12 acres of land at Delmarva’s Red Lion Energy Center, 1592 River Road in New Castle and located within the protected Coastal Zone area. While the sub-station land use by Delmarva would be prohibited today, it was built before the restrictive zoning law was passed and enjoys “grandfather” status.
On April 30, 2012 Diamond State Generation was granted a permit by the Delaware Department of Natural Resources to locate its fuel cells on the Delmarva site. On May 15, 2012 John Nichols, a citizen activist and Delmarva customer filed an appeal to the issuance of the permit with the Coastal Zone Industrial Control Board (CZICB) on the grounds that it was a prohibited use under the CZ statute. Diamond State Generation then filed a Motion to Dismiss Mr. Nichols appeal claiming Mr. Nichols did not have standing (the right) to file an appeal. The motion to dismiss will be decided at the public hearing at 9:30 AM, June 13, 2012 at Del Tech’s Dover campus before the members of the CZICB. (http://egov.delaware.gov/pmc/Event/Details/18175). All members of the CZICB are appointed by the Governor, confirmed by the State Senate and is currently chaired by Richard Legatski.
Caesar Rodney Institute will provide two expert witnesses supporting Mr. Nichols’ appeal. In addition, Lindsay Leveen, an expert in thermodynamics will provide an analysis of Bloom’s fuel cell operating characteristics. His study of the Coastal Zone application submitted by Diamond State Generation Partners, LLC (Bloom Energy) was funded by CRI.
CRI has consistently maintained that electrical power supplied from high cost “renewable” sources such as these ‘Bloom Boxes’ is a “job killer” for the state.To this end CRI continues its efforts to inform the public of the facts and explore other options to prevent the Bloom Energy project from proceeding.
This is a very important meeting. All of Delmarva’s customers have a vital stake in the outcome as does every Delaware citizen concerned about the environment so it is absolutely important you attend.
David A. Stevenson
Director, Center for Energy Competitiveness
If you plan on being there, please reply to this post and say you’ll come!
Also, please consider helping CRI out with a tax-deductable contribution to helping us keep up the fight against those that abuse power. We know the economy is rough, and you have other places you are trying to help out, but we are facing a multi-billion dollar entity with the best corporate lawyers money can buy. You can send a check to:
Caesar Rodney Institute
PO Box 795
Dover, DE 19903
or log onto the website http://www.caesarrodney.org and make a secure donation online.
or call us at (302) 734-2700 and let us know you are available to help us sound the alarm to victory!