State Rep. David Segal, D-Providence, answers questions from his House colleagues as his alternate-energy bill is debated.

The Providence Journal / Connie Grosch

PROVIDENCE — The Rhode Island Senate last night passed a series of energy bills designed to encourage and embrace renewable energy projects, both large and small, in order to make the state less dependent on electricity produced by traditional fossil fuels.

The House of Representatives approved one of its own and started debate on another. But in this corner of the State House, the debate escalated into allegations the bill had been stuffed “chock-full” with so many “treats” that it had been turned into the legislative equivalent of a piñata, and then rammed through a House committee without the opportunity for public comment on the potential added costs to ratepayers.

The House will resume its alternative-energy debate today, with passionate advocates on both sides.

Supporters of the legislation said it would spark development of small-scale renewable-energy projects, foster private investment in large-scale wind and solar projects, stabilize electricity prices, and at the same time spur economic development within the state.

Environmental advocates, who helped craft the bills, said enacting the laws would thrust Rhode Island into the forefront of renewable energy development in New England.

The centerpiece of the legislation is a bill that would require National Grid to enter into long-term contracts with renewable-energy developers to purchase their electricity. That requirement would give assurance to prospective developers that there would be a customer for the electricity produced by the project. Such assurance, the developers have said, is needed to borrow money to build renewable energy projects.

On the House side, some legislators were not convinced the bills were a good idea, and suggested that the General Assembly should take more time to study the potential impacts, such as how the bills might affect electricity rates.

“These are very complicated subjects which tend to be overwhelmed by emotional appeals to the ‘need to do something’ about alternative energy,” said Rep. Laurence Ehrhardt, R-North Kingstown.

The most significant energy bill, which passed the Senate yesterday, requires National Grid to enter into “commercially reasonable” long-term contracts to buy renewable energy from developers who plan to build large-scale renewable-energy projects. The company would be required to buy at least 5 percent of the power it delivers to Rhode Island, and the contracts would last 10 to 15 years, or even longer with approval by the Public Utilities Commission.

National Grid has opposed such a provision in the past because it saw these commitments as risky. However, it changed its position when the bills’ authors, which included Senate President Joseph A. Montalbano, agreed to provide a financial incentive to the utility company. The company would receive an amount equal to 3 percent of the payments it made each year to the developer it contracted with, once the project started producing electricity. The payment is a way to compensate National Grid for the additional risk it would be assuming.

The three-percent payment and any extra cost associated with buying renewable energy would be spread among all ratepayers.

While the bill has been trumpeted as boosting economic development within the state, it doesn’t require that National Grid buy the renewable power from a facility based in Rhode Island. The contracts would have to “provide other direct economic benefits to Rhode Island, such as job creation, increased property tax revenues or other similar revenues.” The PUC would determine whether a contract fits these requirements, which left several lawmakers unsatisfied.

Rep. Susan Story, R-Barrington, proposed an amendment that would have specifically required each contract “create additional employment opportunities” for state residents, but the House rejected her amendment, 18 to 47, with the GOP suggesting the wording was aimed at providing an opening for the developers of the Cape Wind project in Massachusetts, who had a hand in writing the bill. “Where did this legislation come from?” Ehrhardt demanded.

And it’s unclear how the legislation would advance the proposal by Governor Carcieri calling for the state to work with a private developer to build and operate a major off-shore wind farm off Block Island, similar in size to the proposed Cape Wind project in Nantucket Sound.

Under the governor’s proposal, the state will “use its best efforts” to expedite the permitting process and assure a long-term contract for energy produced by the facility.

Last week, seven companies responded to a state request for bids to build the wind farm, which would be large enough to supply 15 percent of the state’s electricity usage.

Since the legislation passed yesterday allows National Grid to buy the renewable energy from a developer outside the state, there’s no assurance that the developer selected by the governor would be chosen by National Grid to supply the required amount of renewable energy.

“So, the million-dollar [or billion-dollar actually] question is what happens if a developer wins the RFP but can’t get a long-term contract” with National Grid, said Matt Auten of Environment Rhode Island.

“The governor’s RFP puts the cart before the horse,” he said. “It may have been more prudent for the governor to wait for the legislative process to finish and then focus on implementation, rather than acting unilaterally and setting up his own secondary process.”

As the House leapt from one bill to the other, Ehrhardt contended there had been “no credible information” provided lawmakers about potential savings. He quoted from a University of Rhode Island report that, as he read it, suggested Rhode Island “lacks substantial wind resources,” except for off-shore.

He and his fellow Republicans questioned why ratepayers already reeling from high energy costs, and not National Grid, should pay for demonstration projects, and why the legislation had been crafted in such a way that National Grid would have to pay full price for any excess energy produced by a developer, including the cost of carrying it over its own distribution system.

Another significant energy bill passed yesterday by the House and Senate would make it more cost-effective for homeowners, farms, businesses and municipalities to operate their own renewable-energy project, such as a wind turbine or solar panels.

The “net-metering” and “net-billing” would allow people who generate their own electricity from renewable sources to get a greater benefit from their surplus electricity –– power generated beyond what the customer can use. A customer could get credit for that surplus electricity, in the form of a discount on a future electricity bill.

tbarmann@projo.com