Paving the way for green energy in Rhode Island

Expansion of distributed generation program could prompt major growth in renewable energy sector

STATE HOUSE – With the support of environmentalists, potential developers and the electric utility, Sen. V. Susan Sosnowski has introduced a bill (2014-S 2690) that would establish a program gradually expanding the current 40 megawatts (MW) over four years to a total of 160 megawatts of distributed generation over five years. 

Presently, the pilot program – which the General Assembly approved in 2011 – allows small-scale energy producers to attach to the electric grid and sell their energy to National Grid, with a standard 15-year contract and a set price. The program was slated to expire this year.

The practice is called “distributed generation” because it involves power generation that is spread around the grid, instead of only at large power plants. Larger-scale distributed generation projects would compete, using the standard contract, but using the set price as a ceiling to ensure price competition.

The expansion, Senator Sosnowski (D-Dist. 37, South Kingstown, New Shoreham) explained, would make room for a large number of renewable energy projects in Rhode Island, including more residential projects. The pilot program is oversubscribed, with more than 71 applications for the 24 renewable energy projects awarded.

“This bill benefits ratepayers, the environment and Rhode Island’s economy,” Senator Sosnowski said. “It’s an exciting venture for both the state and its residents because the expansion essentially encourages more renewable energy projects in the residential market. More importantly, more renewable energy projects mean more green jobs we can create to support those struggling with unemployment.”

Under the bill, potential developers can enter 15- or 20-year standard agreements with National Grid that gives them a guaranteed income that helps them obtain financing for their projects. Or, if they prefer, they may “net meter” which would allow them to receive payment at the retail rate for energy they generate in excess of what they use. 

Net metering is a system where an electricity customer who owns an energy generating system can connect to the grid and receive retail credit for at least a portion of any excess electricity they generate. The bill would also remove the statewide cap on net metering, which has been a longstanding goal of stakeholders in the environmental community and renewable energy developers. 

National Grid, the Office of Energy Resources (OER), Conservation Law Foundation (CLF) and the New England Clean Energy Council (NECEC) stand in support of this legislation.

The bill benefits ratepayers by encouraging the continuing downward trend in renewable energy prices  It does this by using a competitive bidding process for large and commercial-scale projects and by reducing developers’ financing costs through a guaranteed long-term revenue stream.

In 2011, the distributed generation program resulted in 29 contracts for local renewable energy projects in 20 separate Rhode Island municipalities, as well as a steady and significant decline in renewable energy prices. As a result of these projects, more than 175 direct jobs were created in the first 18 months of the program, according to the state Office of Energy Resources (OER).

Senate cosponsors include Senators William A. Walaska (D-Dist. 30, Warwick), William J. Conley Jr. (D-Dist. 18, East Providence, Pawtucket), Catherine Cool Rumsey (D-Dist. 34, Exeter, Charlestown, Hopkinton, Richmond, West Greenwich), and David E. Bates (R-Dist. 32, Barrington, Bristol, East Providence).