The bill boosts the amount of electricity from renewable sources and would increase rates slightly.

08:14 AM EDT on Friday, June 25, 2004

BY TIMOTHY C. BARMANN
Journal Staff Writer

The General Assembly has passed a bill that will gradually increase the amount of electricity supplied to Rhode Island from renewable energy sources, such as the sun and wind.

The Clean Energy Act boosts the amount of "green power" to 16 percent by the year 2020. Renewable energy sources, excluding large hydroelectric plants, now supply about 2 percent of the electricity used in Rhode Island.

Supporters say the act will help lower reliance on traditional fossil fuels, such as coal, oil and natural gas, and will also help reduce air pollution because less of these fuels would be burned to make electricity. The act could, however, result in slight increases in electricity rates, beginning in 2007.

The measure requires that at least 3 percent of retail electricity sales in the state come from renewable resources in 2007. That requirement would increase by 0.5 percent each year in 2008, 2009 and 2010; by 1 percent each year in 2011, 2012, 2013 and 2014; and by 1.5 percent each year in 2015, 2016, 2017, 2018 and 2019. That would raise the amount of renewable energy use to 16 percent of all sources of power.

The renewable electricity could come from solar radiation, wind, the movement of the latent heat of the oceans, the heat of the earth, small hydroelectric and biomass facilities and fuel cells. The power would have to come from "new" renewable energy sources, which is defined as those put into service after 1997.

If Governor Carcieri signs the bill into law, Rhode Island would join at least 13 other states, including Massachusetts, Connecticut and Maine, that have similar renewable energy supply requirements.

The House of Representatives passed the bill 62 to 0 Tuesday and the Senate passed it 35 to 0 Wednesday.

"I think it's a great step forward on a new energy path that's smarter and cleaner and is going to mean great things for Rhode Island," said Kate Canada, an advocate for the Rhode Island Public Interest Research Group, or RIPIRG.

The act has mustered broad support from some 90 other groups and businesses, including People's Power and Light, Clean Water Action, the AFL-CIO and Save the Bay.

Narragansett Electric had opposed an earlier version of the bill that would have shifted more of the energy supply to renewable energy and would have started the program a year sooner.

The electricity distribution company, which serves 465,000 customers in 38 of Rhode Island's 39 communities, said it now gives the act its "tacit approval."

"WE STILL HAVE significant concern about costs," said Fred Mason, a spokesman for the company. "But we're satisfied the appropriate checks are in place to prevent that from happening."

The main check in place is the Public Utilities Commission, which would have the authority to step in and modify, or even cancel, the planned increments if they would raise prices too high, or if there isn't enough renewable energy to buy.

The Clean Energy Act is an effort to move away from the strong reliance on traditional fossil fuels. It could also help stabilize energy prices.

Canada compared investing more in renewable energy to diversifying a stock portfolio. The greater variety of securities, the less likely the overall portfolio will be affected by fluctuations in the market, she said. By making "green power" a bigger part of the mix, it will help dampen the effects of price spikes associated with rising fuel prices, she said.

The mix right now is very heavy in fossil fuels. Narragansett Electric said the power delivered to its customers for the 12-month period ending June 2003 was produced by coal (20 percent), nuclear energy (27 percent), oil (9 percent), natural gas (33 percent), water (4 percent) and other sources (7 percent).

Renewable energy has not been a larger part of the mix, mainly because it is generally more expensive, supporters say, but by increasing the demand, the supply will grow and prices will come down.

It could even result in lower natural gas prices in future years, Canada said, as demand is lessened because of greater reliance on renewable energy.

Supporters say renewable ewnergy could also boost the local economy by helping companies whose businesses are tied to its production. One example could be TPI Composites of Warren, which makes blades for wind turbines.

Narragansett Electric is projecting that when it is required to buy more renewable electricity, it will cost more. The act allows the company to pass through those costs to customers.

The company predicts that in 2007, the first year of the program, rates will go up by no more than 25 cents a month for the typical residential customer using 500 kilowatts of electricity, according to Thomas Robinson, deputy general counsel for Narragansett Electric.

In the year 2010, the rate increase would rise to about 62.5 cents per month for the typical customer, a 1-percent hike, the company said.

Robinson said that Narragansett predicts that there will not be enough renewable energy available to buy for its customers in the first years of the program.

In that case, the company is required to make an "alternative compliance payment" to the Rhode Island Economic Development Corporation.

The EDC would then use the money to help foster the production of renewable energy.

The payment would be equal to 5 cents per kilowatt hour of renewable electricity that the company was obligated to buy.

Canada said the act provides for the money to be put in a trust fund, overseen by the EDC, and could not be used for other purposes.