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Delaware Senate Democrats

Sen. Hansen sponsors legislation to establish procurement policy for offshore wind farms

April 18, 2024

DOVER – On the heels of historic commitments to expand its renewable energy portfolio and reduce greenhouse gas emissions, Delaware took another major step toward a more sustainable future on Thursday with the introduction of a bill to establish a procurement policy for future offshore wind projects.

“Delaware is the lowest lying state in the country, and climate change is already affecting our communities. Greenhouse gases need to be reduced, and we need to find cleaner ways to generate energy,” Governor John Carney said. “This legislation will make Delaware more of an active player in offshore wind by allowing us to purchase wind-generated renewable energy in a fiscally responsible way. Thank you to the members of the General Assembly who have brought this important bill forward.”

Sponsored by Sen. Stephanie Hansen, Senate Bill 265, also known as the Delaware Energy Solutions Act of 2024, would create a detailed framework for the solicitation, consideration, and potential approval of a future offshore wind project in Delaware Code.

“This legislation is the product of careful consideration and input from multiple state agencies, industry experts, energy researchers and environmental advocates, and I want to thank all of the people who worked so hard over many years to help us reach this important milestone,” said Sen. Hansen, chair of the Senate Environment, Energy & Transportation Committee.

“Thankfully, we have the benefit of taking the best outcomes from our neighbors to make sure we are moving forward in a strategic and deliberate manner to create the best and most affordable results for Delawareans,” she said. “I want to be clear that the bill I introduced today does not automatically give the green light for any offshore wind projects. What it does do is establish the specific terms and conditions under which the State of Delaware will be willing to permit a qualified and experienced developer to move forward with a cost-effective offshore wind farm project, securing a cleaner, more sustainable future for our children and grandchildren.”

SB 265 would authorize the DNREC State Energy Office and the Delaware Public Service Commission to work in consultation with the Delaware Renewable Energy Task Force to solicit proposals from one or multiple developers willing to build a system of offshore wind turbine electric generation facilities, transmission lines and interconnection facilities. Following public comment, the Public Service Commission would approve a final solicitation document.

Under SB 265, either through one solicitation or through multiple solicitations, the State Energy Office is directed to procure between 800 and 1,200 megawatts of electricity to Delaware’s public utilities. Delaware’s municipal electric companies, rural electric cooperatives, and third-party providers will be able to purchase electricity generated from offshore wind if they choose. Delaware also could initiate its own project or partner with another state.

To qualify for further consideration, those proposals would need to have a term of at least 20 years, meet benchmark pricing guidelines, describe any potential impacts to the electrical transmission system and energy markets in Delaware, and specify a number of detailed economic costs and benefits for the state, including potential jobs created, supply chain requirements and workforce development needs, among other requirements.

The State Energy Office also would determine whether to allow each submission to proceed to the contract negotiation stage based on several factors. They include each proposal’s likelihood of achieving commercial operation, adherence to a benchmark pricing structure, consistency with the Delaware Climate Action Plan and Delaware Energy Plan, estimated ability to result in a net reduction of greenhouse gas emissions, competitiveness with similar projects, economic impact, among others. The Public Service Commission also would have to authorize a bid to go forward following a public hearing. 

For proposals that reach the contract negotiation stage, SB 265 authorizes the State Energy Office to set contract terms that include community benefit agreements, project labor agreements, supply chain requirements, workforce development requirements and conservation and mitigation elements.

Negotiated contracts determined to be in the public interest by the State Energy Office would then be submitted to the Public Service Commission to verify that the final proposal remains in the public interest and will result in rates that are just and reasonable.

After confirming those findings, the Public Service Commission would issue an order approving an offshore wind contract along with any costs or savings passed on to consumers.

“By opening the door to offshore wind energy, we’re not only embracing a cleaner, more sustainable future but also ensuring that we stay on track to meet the targets outlined in the Climate Solutions Act,” said Rep. Debra Heffernan, House prime sponsor of SB 265 and chair of the House Natural Resources & Energy Committee. “I want to thank Sen. Hansen for all of her hard work on this issue and for her leadership in bringing forward this legislation.”

SB 265 has been assigned to the Senate Environment, Energy & Transportation Committee.