Rhode Island consumers and businesses that buy “green” electricity through the New England GreenStart program may be eligible for a tax break.
The GreenStart program supports the building of new renewable-energy projects in the region, such as wind and solar power installations. It is financed by a surcharge on the electrical bill of customers who choose to participate.
The new tax break will result from the restructuring of the company that administers the program in Rhode Island – People’s Power & Light of Providence.
The nonprofit company said it has merged with the Massachusetts Energy Consumers Alliance (Mass Energy), to form a new business entity, Energy Consumers Alliance of New England.
Both companies will continue to do business under their former names and continue other services, including a heating-oil buyers group.
The change means that GreenStart customers in Rhode Island may list as a deduction the monthly surcharge they’ve paid as of last July 1, when the companies officially merged.
The surcharge can be listed as a charitable contribution on a customer’s 2006 federal tax return, People’s Power & Light said in a statement.
The current surcharge is 1.5 cents per kilowatt hour. The cost to a typical household that uses 500 kilowatts of electricity a month would be $7.50 a month, or about $90 a year. The tax savings for someone in the 25-percent tax bracket would amount to $22.50 a year.
The money collected by the surcharge is used to purchase “renewable energy certificates” that are sold by generators who make green energy. There is a market for these certificates in New England because several states, including Rhode Island and Massachusetts, have laws that mandate that utility companies buy a certain percentage of renewable energy, such as that produced by wind turbines and solar panels.
The states hope that requiring more and more electricity to come from these sources will bring about more investment in large-scale renewable energy projects.
In Rhode Island, 3,369 customers of utility National Grid have signed up for the GreenStart program, said Larry Chretien, executive director of Energy Consumers Alliance of New England.
Altogether, those customers buy about 6 megawatt-hours of renewable electricity a year, which amounts to about 17 times the annual output of the wind turbine at Portsmouth Abbey, Chretien said.
Another significant change at People’s Power & Light is the departure of the organization’s founder, Erich Stephens.
Stephens left to take a job with Bluewater Wind LLC of New York City, People’s Power & Light said. Stephens is establishing a Rhode Island office for the developer and will work on wind projects along the East Coast.
His departure was not related to the restructuring of People’s Power & Light, Chretien said.
The organization has hired two people to take Stephens’ place: Omay Elphick, who served as project manager for the construction of Save the Bay’s new Providence headquarters; and Karina Lutz, who was one of the original board members of People’s Power & Light.
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