Rhode Island Passes 15 Percent State RPS

Rhode Island Passes 15 Percent State RPS

"When it comes to protecting our nation's heath and environment, Rhode Island is not only doing its share, we're helping to show the way."

- Erich Stephens, Executive Director of People's Power & Light

Providence, Rhode Island - June 25, 2004 [SolarAccess.com] Rhode Island is poised to join the growing number of states with a renewable energy standard, a measure which helps catalyze the construction of renewable energy projects.

In a flurry of rapid voting indicative of the broad support that had developed for the proposed policy, the Rhode Island General Assembly has unanimously passed a bill that will require 15 percent of Rhode Island's electricity to come from renewable energy sources by the year 2020. The bill will become law unless Governor Donald Carcieri vetoes it within seven days.

The bill is the result of over three years of advocacy by a coalition that had grown to nearly 100 businesses, labor unions, health and environmental groups. People's Power & Light, Rhode Island Public Interest Group (RIPIRG), and Clean Water Action were the lead organizations of the coalition. People's Power & Light is a nonprofit organization that, among other programs, offers a "green" electricity option to Rhode Island electricity customers.

"We developed a great team working for this bill," said Erich Stephens, Executive Director of People's Power & Light. "Our knowledge of, and connections within, the electricity industry, coupled with the organizing and lobbying strengths of RIPIRG and Clean Water Action, proved to be a very effective combination in getting this legislation passed."

According to People's Power & Light, the House version of the bill was sponsored by a Democrat with strong labor ties, and the Senate version of the bill was sponsored by a Republican with solid pro-business credentials.

Both sponsors indicated that economic factors, particularly the potential for job creation in the region, were their biggest reasons for proposing the bill. Opposition to the bill centered around perceived cost impacts, even though studies showed the impacts would be minimal and that the policy could result in savings.

Two price protection mechanisms, an alternative compliance payment should the incremental cost of renewable energy exceed 5 cents per kWh, and the ability of the Public Utilities Commission to slow the annual percentage increase of renewable energy required, helped to overcome these concerns. In the end, the only strong opposition came from multi-national natural gas and nuclear companies.

Given that only two percent of the 15 percent target requirement can come from existing renewable energy sources, Rhode Island's renewable requirement will be a more ambitious policy than many other states that require higher renewable percentages, but whose existing generation base starts with a higher percentage of renewable energy, according to People's Power & Light. This bill is also one of the few renewable energy standards to be passed independently of any electricity industry deregulation or reregulation, settlement with a utility, or similar activity.

The Rhode Island bill incorporates some lessons learned from neighboring Massachusetts' renewable energy standard, where the inability or unwillingness of electricity suppliers to enter into long-term contracts for renewable energy certificates has caused short-term prices to bump up close to legislated maximums. The Rhode Island bill enables the state's Economic Development Corporation to enter into long-term contracts for renewable energy certificates. The Economic Development Corporation can then resell these certificates, on a short-term basis if need be, to utilities that seek them for compliance with the renewable energy standard. The Economic Development Corporation will also receive any alternative compliance payments, and invest these funds into projects whose generation can be used to meet future renewable energy requirements.

Rhode Island will differ from many other states that have passed renewable energy standards in that little, if any, project development is expected to occur within the state as a result of the policy. Rhode Island is the smallest state in the nation, is densely populated, and has a medium quality wind resource. Proponents of the policy are counting on out-of-state projects to supply the required renewable energy. In turn, those projects should spur the Rhode Island economy and job development.

For example, turbine blade manufacturer TPI Composites is located in Rhode Island. Executives with Cape Wind, a large wind project proposed off the Massachusetts' coast, are considering using a former naval air station, which is owned by Rhode Island's economic development corporation, as the manufacturing and staging space for their project. In addition, Rhode Island's electricity is provided through a regional marketplace serving all six states of New England. So even if new renewable energy projects resulting from the bill are built outside of Rhode Island, the state would benefit from the long-term price stabilization that could result from greater use of renewable energy.

Given that the legislature clearly demonstrated it could over-ride any veto and there is bipartisan sponsorship of the bill, proponents are optimistic that Governor Carcieri, a Republican, will sign the bill into law or at least will allow the bill to pass without his signature. Carcieri campaigned on his environmental credentials, and shortly after coming to office wrote a letter to federal officials in support of the Cape Wind project.

"When it comes to protecting our nation's heath and environment, Rhode Island is not only doing its share, we're helping to show the way," Executive Director of People's Power & Light Erich Stephens said. "We're very pleased that the hard work of the coalition over the years has finally paid off."

For Further Information:

• People's Power & Light

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