Because Rhode Island policies on
renewable energy lag behind other states in the region, it is losing out on business from the installation of wind turbines, solar-energy systems and the like, industry representatives told a special legislative task force on Wednesday.
State grants and federal stimulus money have helped, but they have failed to create a sustainable industry in Rhode Island.
“Right now, we’re missing out,” said Kenneth Payne, administrator of the state Office of Energy Resources.
Karina Lutz, of the green-energy company People’s Power and Light, and Paul Raducha, a consultant with Soleil Resources, presented one possible long-term solution to the Small Business Renewable Energy Task Force. They propose setting up financial incentives for the development of what’s known as distributed generation. Simply put, the idea is to encourage the proliferation of small energy systems throughout the state. It’s not restricted to windmills or solar arrays, but the focus is on renewables.
Supporters of distributed generation say the benefits aren’t limited to just bringing on line more sources of clean power. Development would create jobs, for one.
In addition, locating energy sources at strategic sites, such as places where electricity usage is high, takes stress off transmission lines, because they can reduce the amount of power that has to be carried in from farther away. In turn, these small systems increase the overall reliability of the power grid. And decentralizing energy production protects against power disruptions caused by natural disasters or terrorist attacks.
Legislation creating a distributed-generation program has been drawn up, but it has not been introduced yet in the General Assembly. The bill would set a goal to increase the amount of distributed generation in the state by 1 percent annually, with a target of 10 percent in 10 years.
It would require local electric utilities — primarily National Grid, the state’s dominant player — to purchase renewable-energy certificates, or RECs, from distribution-generation facilities. RECs are federally mandated tax credits that accrue with the generation of clean energy. The owner of, say, a wind turbine, receives more credits when the turbine produces more power, which can then be sold on the open market.
Under the legislation, utilities would be required to enter into contracts to purchase RECs from sources connected directly to the Rhode Island power grid. Prices would vary based on technology and the size of a project and would be managed by the Rhode Island Renewable Energy Coordinating Board. The board would be created under separate legislation that was introduced this week and would consist of the directors of five state agencies who would be advised by businesses, environmentalists and policymakers.
The bill aims to bring certainty to the REC market in Rhode Island by stabilizing prices. Prices for the credits elsewhere can vary. The bill would not set prices for the actual power being sold from generators. That would still be decided by the market.
Raducha said that locking in a price for the credits would make Rhode Island much more attractive for developers.
“If I build this system and it produces what I say it will, that’s a bankable number,” he said. “That stability is key.”
The bill would also fill a gap in state law governing renewable
energy.
The law is clear regarding net metering, the practice of building a renewable-energy system “behind the electric meter” to offset power usage at a given location. It is not clear about building a system in front of the meter to sell power directly to the grid. Those issues have been raised in connection with a wind turbine built by the Town of Portsmouth and are the subject of a case being considered by the state Division of Public Utilities and Carriers.
Task-force members spoke positively about distributed generation.
“We need to create a sustainable renewable-energy industry in Rhode Island, and not just do a one-off here and a one-off there,” said Rep. Deborah Ruggiero, D-Jamestown, Middletown, who heads the task force.
