“Delaware’s Regulatory Pick-Pockets”

Last month, Delmarva Power’s (Delmarva) Delaware utility customers learned that the “surcharge” they must pay each month to subsidize Bloom Energy, Inc.’s (Bloom) ongoing fuel cell project was increasing from an average 67 cents-per-month to $4.37 in November alone.

This “surcharge” is the result of a crony deal between Governor Jack Markell, the Delaware Public Service Commission (DPSC), and Delmarva to modify the Delaware Renewable Energy Portfolio Standards Act (REPSA), picking the pockets of Delmarva ratepayers and delivering millions of their dollars straight to Bloom.

Bloom’s sweetheart deal came down this way.  In October, 2011, Delmarva received approval from the DPSC to surcharge ratepayers’ electric bills and subsidize two generating stations and a fuel-cell factory in Newark, run by Bloom. Bloom, a California company, said that it would use Delmarva’s customers’ money to finance its factory and create 900 jobs manufacturing natural gas-powered fuel cells. Bloom also promised to install 30 megawatts of “Bloom Boxes” in the state.

The government then modified REPSA to establish a system of discriminatory eligibility requirements, subsidies, and energy-portfolio standards multipliers, all designed to benefit Bloom by denying out-of-state companies equal competitive footing, burdening interstate commerce, and increasing the costs for Delmarva ratepayers, who  might otherwise benefit from fair competition and an open market.

Bloom has quickly pocketed millions.  Yet, to date, the company’s promise of 900 jobs has proven to be empty.  In exchange for massive payments by Delaware consumers, it has created only a reported 50 jobs.

Last June, my organization, Cause of Action, a government accountability group, filed a lawsuit challenging this backdoor deal. The suit seeks to overturn certain provisions of REPSA for unconstitutionally undermining the competitive market and forcing Delaware utility customers to pick up the tab.  We filed this suit on behalf of one of the many unsatisfied Delaware ratepayers subject to this special surcharge-subsidy, and an out-of-state fuel cell manufacturer whose competitive place in the clean energy market was thwarted by the Public Service Commission’s scheme to prop up Bloom at the expense of its own citizens.

Renewable energy competition means lower prices and better customer service.  But, by denying out-of-state companies the level playing field that they are entitled to under the law, Gov. Markell and the DPSC elevated the interests of a corporate crony over those of Delaware’s citizens and ratepayers.  Delaware utility payers now must pay for a surcharge that can rise rapidly without warning, oversight or explanation.  So the next time Delmarva customers pay their monthly utility bill with the Bloom surcharge, they should ask why their government “rigged the game” to prevent fair competition, and who, exactly, their government serves.

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