As the surcharge for the 30 megawatt Bloom Project with Delmarva Power kicks in at over three times the expected cost to consumers questions persist about how this project got through the system. It is really a story of how rules were bent for a risky start up business that promised a lot of jobs in return for a very large financial guarantee. As Director of the Caesar Rodney Institute’s Center for Energy Competitiveness I regularly work with the legislature and the Public Service Commission (PSC), the groups whose support was needed to approve the project. The Markell Administration approached me about helping with the legislative lobbying and I later became an intervener in the PSC approval process so I had a front row seat to the proceedings. Interveners get to see all the documents (over a thousand pages), to submit testimony, and to cross examine witnesses in a public setting. Unique legislative approval was required to treat Bloom’s fuel cells as a renewable resource, to allow the PSC to establish a tariff for fuel cells, and to require the PSC to consider the economic development potential as an offset to the tariff. Delmarva Power would also be reimbursed for the natural gas and operating cost of the Bloom Boxes. The legislature was also asked to limit the tariff to fuel cells manufactured in Delaware, a provision that led to a lawsuit testing the Constitutionality of this feature under the Interstate Commerce Clause. We are still awaiting a decision from a federal judge. Especially troubling is allowing the Bloom Project to be called a renewable resource and to offset wind and solar projects when it was using conventional natural gas and is, in fact, less efficient than conventional natural gas generators. The Fuel Cell Act was brought before the legislature late in June near the end of the session when the focus is on passing a state budget. It was passed in nine legislative days. To put that in perspective, most new laws take a year or more for action. The Administration’s main argument was Bloom might bring 900 to 1500 jobs to Delaware and it would only cost residential ratepayers $1 a month. To stay within the $1 a month number, for the first time, no Delmarva Power customer would be excluded from paying the fee. Previously, large industrial customers had been exempted from paying for renewable power and anybody who bought from a third party generator had been excluded. The maximum cost to ratepayers was capped at the cost of the highest tariff existing the January before the law was passed. It was pretty well known the Bluewater Wind offshore wind project was about to collapse and postdating the reference ensured the expensive offshore wind tariff would be the comparator. No details were provided as to how the $1/month figure was calculated. It was basically, “trust us”. Another feature of the bill was once the tariff was approved no future legislature could cancel the project without paying Bloom the entire cost. The bill passed because of the potential jobs and was moved to the PSC for tariff approval. PSC dockets often take a year to complete. The Fuel Cell Tariff was fast tracked and wound up passing in less than three months. Now the details of the project cost came out and even then much information needed clarification. Bloom and Delmarva were guaranteed $1.1 billion in payments over 21 years. Electricity from Bloom costs three and a half times conventional power. We identified nineteen separate risks in the Bloom Project and all were handed off to electricity customers. Electricity customers might be reimbursed through sale of the electricity the Bloom Project produced, through the avoided cost of buying future renewable energy credits, and in the economic benefits of those expected new jobs. Delmarva Power’s customers assumed all the risks of the future price of electricity and renewable energy credits, and how many jobs would actually be created. Neither the PSC Staff, nor the Public Advocate questioned the basic assumptions of what those future prices would be. Minor adjustments were made that brought the expected cost to $1.34 a month and cut the economic development benefits in half but the legislative rules were met and the PSC Commissioners reluctantly passed the tariff. The outcome could have been different. The Caesar Rodney Institute was the only intervener objecting to the tariff. The price of renewable energy credits was already crashing and estimates for the future price of electricity were being dramatically reduced by the US Energy Information Agency. We found eight separate errors in the economic development calculations of the Delaware Economic Development Office that lowered the value of the project by a factor of ten. Instead of $1 a month we estimated the cost would be closer to $4.50, way above the $2.40 cap. We also questioned the likely-hood those 1500 jobs would ever be created given the fact Bloom can’t sell any product without massive state subsidies that don’t exist outside of California. The Commissioners chose to ignore this evidence. Monthly Delmarva Power reports indicate the cost will be around $4.50 a month by the end of this year and we see little relief for electric customers in future years. Ironically, Bloom’s manufacturing plant won’t pay the tariff as it buys power from the City of Newark. Hopefully, we have learned a lesson to avoid this type of sweetheart deal. The Fuel Cell Act also allows Bloom to request a tariff for an additional twenty megawatts of generating capacity. There is no way this should ever be approved. Finally, we hope the PSC approves electric bill transparency so you can see the cost of this project on your monthly bill.