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Our Energy Predictions for 2016
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We at CRI have been correct about every major energy policy prediction we've made. In 2010, we predicted the Bluewater Wind offshore wind project would collapse for lack of financing.  The announcement came in late 2011. In 2011 we predicted the Bloom Fuel Cell Project would cost Delmarva Power residential electric customers between $4 and $5/month when everyone else was saying about $1/month. The cost averaged about $4.50/month in 2014 and 2015.  We have successfully predicted the price for Solar Renewable Energy Credits (SREC) in the last three annual auctions. 
 
 We wish you all a Happy New Year and present to you our 2016 predictions:
 
1. The courts will strike down the Delaware Department of Natural Resources & Environmental Control's (DNREC) un-constitutional 2013 carbon dioxide allowance tax increase forcing a return to the old allowance auction rules. This will result in Delaware withdrawing from the Regional Greenhouse Gas Initiative and instituting a Delaware-only auction, saving electric customers a projected $30 million a year. There will be additional savings from increasing power generation instate lowering premium charges for importing 32% of our power. Delaware power plants have already cut CO2 emissions 50%, and have met the RGGI goal.
 
2. Delmarva Power will announce plans to build a large utility owned solar farm ending the practice of exclusively buying expensive SRECs from high priced, small scale, independent solar generation systems with twenty-year contracts saving electric customers millions of dollars. The current practice limits construction to two megawatts of capacity and violates Delaware Code which states SREC purchases must provide economic viability for all size solar facilities. SREC costs are passed on to electric customers.
 
3. Bloom Energy will go bankrupt sometime in the next two years as state subsidies nationally are not high enough to support the extraordinary high cost of Bloom’s products. The lack of replacement fuel cell stacks will eventually shut down the Delmarva Power fuel cell generating facilities.  Unfortunately, the contract requires Delmarva’s customers to pay 55% of the cost of what would have been produced for another 18 years. The charge to electric customers will fall from $36 million a year to about $20 million.
 
4. The Delaware General Assembly will consider legislation to clarify a regulation requiring a freeze in the increasing amount of renewable energy sources used in Delaware. Delmarva Power customers are paying a 9% premium for electricity from renewable sources compared to a legislated 3% cost cap.  DNREC is expected to issue a determination saying a freeze is not required, using tortured logic to declare the cost everyone can see on their own electric bills is not real.
 
The outcome of the legislation is uncertain. If the proposed legislation passes the practical implication is SREC auctions will cease lowering subsidies for small scale solar installations. These systems would still receive a 30% federal Investment Tax Credit and Green Energy Fund grants paid for by Delmarva Power customers.
 
The good news is studies from the US Department of Energy, the Massachusetts Institute of Technology, and CRI show some installers are overcharging by up to 40% for small scale solar projects either by failing to deploy installation efficiencies, or by padding their margins. Lower subsidies will result in uniform lower installed prices which, in turn, will lead to a larger market for the solar industry.  We project abandoning the proposed 2016 SREC auction will save electric customers $27 million. These auctions are expected to continue annually through 2025 without a freeze, so a freeze could potentially save electric consumers a quarter billion dollars. 
 


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