Bloom critic wants review of $2M surcharge (Karl Baker)

Compare this headline to the title of the online story: "Bloom critic petitions state to review fuel cell surcharge today topping $200 million."

“As Delaware’s fuel cell surcharge for Bloom Energy ticked past $200 million this month, a long-time critic formally challenged the validity of the deal the company reached with lawmakers eight years ago.” John Nichols of Middletown is said to be petitioning utility regulators to review “Delaware’s decision” [
the PSC’s decision] to impose a fuel cell tariff on Delmarva Power electric bills to provide “money the utility uses to purchase electricity from Bloom Energy.” Actually, all of the electric power produced is sold to the grid and Delmarva Power simply acts as a collection agent.

Nichols claims the qualified fuel cell provider (QFCP) tariff has “placed a ‘burden’ on homes and businesses.” The rest of his pitch is deferred until later in the story. The fact that over 300 people signed an on-line petition asking for relief isn’t mentioned, although it is cited in his petition to the PSC.

Bloom spokesman David McCullough (from a written statement) is quoted that (1) the petition “has no basis” [
that’s debatable], and (2) Nichols is an “established critic.” [So what?] Later in the story, whether from the written statement or otherwise, McCullough is quoted that (3) “Delmarva Power [simply the billing and collection agent] and Bloom Energy continue to deliver clean, reliable electricity with stable and predictable prices [prices have considerably exceeded the initial forecast] over the term of the project, exactly as promised,” and (4) it is “desperately disappointingly to our employees in Delaware when local media provides a mouthpiece for such critics.”

The surcharge, “which acts a subsidy for the heavily-indebted company,” is said to be calculated “based upon the market price of renewable energy credits and the regional cost of surplus electricity. The lower those prices fall, the higher the surcharge becomes for Delmarva Power customers in Delaware.” [
This doesn't accurately describe how the tariff is calculated.]

A 2011 study [
not identified] “estimated the average monthly charge for a household would peak at about $3.50 in 2017,” but “it has surpassed $6 in past months” and “the October charge will be about $4.79” according to the PSC.

Highlights of the back story about how Delaware sought to entice Bloom Energy to locate a factory in Delaware to create jobs are reprised, including the fact that the number of employees currently stands at about 1/3 of the initial goal of 900 employees.

Nichols [
already dismissed as an “established critic”] argues that “the Bloom tariff has been too expensive for too small of an environmental benefit, while claiming "it has not provided proposed economic development or innovation.” He wants the PSC to consider “options to mitigate the burden,” but when “asked what that should be, he said it was up to the Commission to decide.” [Three specific options are enumerated in the petition; it might have been appropriate to report them.]

Rep. John Kowalko (D-Newark) has supported the petition and will seek to intervene. He signed the implementing legislation in 201l after being personally lobbied by then-Governor Jack Markell,” and calls this “the most regrettable vote” he has ever cast.

The petition will be discussed at the Oct. 9 meeting of the PSC, and Matt Hartigan of the PSC staff is quoted that (1) Nichols “wants us to reevaluate this tariff and whether Bloom is fulfilling the requirements,” and (2) PSC officials have told Nichols in the past that any issues with the tariff should be resolved by the General Assembly “and not in an executive agency.” [
The PSC is an independent regulatory commission, not an executive agency.]

“Nichols’ petition" is characterized as his "latest challenge to the Bloom deal,” and it is noted that two prior actions (Delaware Coastal Zone and Commerce clause challenge in federal court) were dismissed based on grounds of “lack of standing.”

The QFCP deal is not a fiasco that is over and done with. The cumulative QFCP tariff is on track to reach about $700 million by 2033, and there are no significant environmental benefits. The key question is whether the PSC, Delmarva Power and Bloom Energy have any obligations in this matter beyond compliance with the specific terms of the legal paperwork that was executed in 2011. We'll see what happens.


© 2018 Secure America’s Future Economy • All rights reserved • www.S-A-F-E.org