WARWICK – Staff from the state Division of Public Utilities and Carriers have recommended paying the Town of Portsmouth less for electricity generated by a wind turbine at the local public high school.
In a memorandum dated Feb. 2, the division’s Advocacy Section found that the 1.5-megawatt turbine installed in 2009 should never have been allowed to qualify as a “net-metering” facility that could sell its electricity into the regional power grid at a retail rate. Instead, from now on, Portsmouth should be paid at a lower wholesale rate, according to the memo.
Although it is unclear what that amended rate would be – because it depends on when the power is sold to the market – it would almost certainly be less than the rate the town has been paid until now, which was as high as 11.4 cents per kilowatt-hour in 2009 and 2010, and has more recently been 9.5 cents. Wholesale rates over the past two years have tracked between 2 and 3 cents less than those retail prices.
The memo was submitted as part of an investigation into the way Portsmouth sells power from the turbine to National Grid, Rhode Island’s dominant electric utility. The inquiry was prompted by a complaint from Benjamin Riggs, a Newport resident who has questioned the economics of wind power.
The Advocacy Section’s findings do not represent a final ruling in the case. National Grid has been given 21 days to respond in writing. A hearing will then be scheduled to allow public comment and give any parties with a direct interest in the matter a chance to intervene. At the end of the process, a hearing officer from the DPUC will issue an order, according to a spokesman for the state agency.
The case revolves around the state law that governs net metering – which functions as a financial incentive to owners of wind turbines and solar energy systems – and the differing interpretations of that law.
Under a strict reading of the statute, only green energy that isn’t used on site – at a home, a school, a business or some other location – can be sold to the power grid at a retail price. Not only does this prevent any excess electricity from going to waste, but the higher price rewards the owner of the turbine or photovoltaic array for generating clean, renewable power. This configuration of selling only excess power is known as a “behind-the-meter” installation.
But there is also a looser interpretation of the law that allows renewable-energy systems that are not behind the meter. That is the one that Portsmouth and its supporters refer to in defending how the town sells power from its turbine.
The Portsmouth turbine could not be set up behind an electric meter because of the layout of power lines and other equipment at the high school site. The turbine was instead installed directly into National Grid’s distribution system. None of the power is used at the high school. Instead, all of it is sold to National Grid.
There is nothing wrong with that configuration, but the price at which the power is being sold has raised questions. National Grid agreed to buy the power at a retail rate as if the turbine were a net-metering facility.
Riggs complained that that price is artificially high. The retail price includes surcharges for distribution and transmission, services that National Grid provides, not the town. If National Grid is paying that money to the town but still maintaining the services, then it must be getting compensation from other customers to make up the difference, Riggs argued.
The effect on other customers’ bills from the Portsmouth turbine may be small. But a group of East Bay communities has proposed a similar configuration with an 8- to 10-turbine wind farm in Tiverton. And proposals in North Kingstown, Charlestown and Johnston would, in effect, do something similar, by either using a fraction of the power they generate on site or selling it entirely to the electric grid at a retail rate.
Since the case was filed, National Grid has conceded Riggs’ point. Now, the division’s Advocacy Section agrees.
“At a minimum, any further recoveries of costs by National Grid associated with net metering of the Portsmouth Wind Facility, or any similarly situated arrangement should cease immediately,” the memo says.
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