June 23, 2016
Rhode Island

Renewable energy gets a boost in Assembly session

By Alex Kuffner, Journal Staff Writer | Providence Journal | Posted Jun. 22, 2016 | www.providencejournal.com

PROVIDENCE – As the General Assembly session wound down this month, the discussion around state energy issues focused on two controversial proposals.

The first – legislation aimed at blocking a plan for a large fossil fuel-burning power plant in Burrillville – was killed by the Senate Committee on Judiciary, but only after it won broad support in the House of Representatives.

The second – a provision inserted into the House budget bill that would have shifted some interconnection costs for renewable energy projects from private developers to electric ratepayers – was removed after a group of legislators alleged that it was aimed only at benefiting one politically connected wind power company.

Despite the attention devoted to those divisive issues in the waning days of the legislative session, there were other important changes on the energy front that lawmakers had been working on for many months.

The changes do not include the adoption of a carbon tax aimed at addressing global warming that would have affected electric suppliers. Although a coalition that calls itself Energize Rhode Island pushed hard for the legislation, it stalled in committee for the second year in a row.

But the changes do include the extension of the state’s Renewable Energy Standard, which requires National Grid and other electric suppliers to gradually increase their purchases of renewable power every year. Under the new law, the state’s target for green energy was reset from 14.5 percent of total supplies by 2019 to 38.5 percent by 2035.

Many of the changes were grouped together in one overarching bill that won approval early in the morning of June 18. Nearly all of them were put forward in one form or another as part of Senate President M. Teresa Paiva Weed’s “green economy” plan unveiled in January and Governor Raimondo’s budget proposal presented in February.

Among them is an expansion of net metering, a program that allows the owner of a renewable energy system to use the electricity generated from that system to offset their power bill. Net metering is most popular with homeowners and small businesses who install those systems on their property – for example, rooftop or ground-mounted solar panels.

The new program extends what’s known as “virtual” net metering, which is currently confined to municipalities, to affordable-housing developments. Under the provision, even if those developments don’t have room on their properties to put up solar panels or wind turbines, they can install them off site and still get credits on their bills.

Virtual net metering will also become available for “community” projects, which are defined as three or more residential electric consumers banding together and developing renewable energy systems and then sharing the credits among themselves.

At a hearing on the bill before it won passage, the Conservation Law Foundation, the state Public Utilities Commission, the Northeast Clean Energy Council, the Rhode Island Public Expenditure Council and others all spoke in support or submitted written testimony in support. Nobody registered opposition.

“When we look at net metering, this is a structural incentive. It’s not a financial incentive. So there’s really no impact to the ratepayer,” Julian Dash, of Clean Economy Development, said at the hearing. “If you use 500 kilowatt hours a month of electricity, but if you produce 250 kilowatt hours of solar, you’re just going to be charged the remaining 250 kilowatt hours. It just nets out your bill. We’re not asking the ratepayers to subsidize anything.”

The legislation also allows companies such as SolarCity, Sunrun and other third-party financiers to lease solar arrays to homeowners and businesses, bringing Rhode Island law in line with 26 other states, including Massachusetts, Connecticut and New York. SolarCity is active in Rhode Island, but under current law is able to offer only a loan program. Leasing allows more people to install solar panels by removing the hefty upfront costs, which can be an impediment to some.

Chris Kearns, chief of program development for the state Office of Energy Resources, said the net metering and third-party financing provisions were among the energy measures that were of critical importance to the Raimondo administration. He called the legislation “far-reaching in terms of improving the state’s clean energy economy.”

“We view this legislation as a great step forward,” he said in an interview.

The bill, which is set to go into effect once the governor signs it into law, also:

— Extends the Renewable Energy Fund to 2022. The fund, which is supported by a small surcharge on electric ratepayers in Rhode Island, is used to provide grants and loans to businesses, municipalities and homeowners to install renewable-energy systems. According to the General Assembly, over the past three years, the fund has issued $9 million in loans and grants and leveraged $21 million in capital funds for projects.

— Directs the Office of Energy Resources to work with the Rhode Island Public Expenditure Council, the Rhode Island League of Cities and Towns and municipal tax assessors to come up with a property tax for new renewable energy systems by Nov. 30. A recent state Supreme Court decision determined that wind turbines are tax-exempt as manufacturing equipment, but cities and towns can still assess a tax on the land they occupy. Kearns said this change was also one of the governor’s priorities because it brings more predictability to the market.

— Allows multi-family homes that share the same roof to participate in the state Renewable Energy Growth Program, an initiative that sets prices for the sale of energy to National Grid. This and other related changes can be implemented next year rather than in 2019 as was scheduled under the original 2014 law.

The legislation was introduced in the House by Rep. Deborah Ruggiero, D-Jamestown, Middletown, and in the Senate by Sen. William J. Conley Jr., D-East Providence, Pawtucket.

“These are great ways to incentivize the development of more small renewable energy generation projects, and they help continue the expansion of our clean energy industries at the same time,” Conley said in a statement.