Long-term contracts are needed by renewable energy developers to secure financing for their projects. We therefore fully support the R.I. Public Utilities Commission’s (PUC) recent directive that National Grid enter into long-term contracts with renewable energy projects.
But from a public-policy perspective, the PUC’s order is only a small step in the direction of where Rhode Island needs to go to make significant use of clean, stable-priced energy, and to benefit from the job-creation potential of renewable energy. Thus, in order to capture the full range of benefits of renewable energy for Rhode Island, legislation is required. Fortunately, the General Assembly leadership is showing great initiative on this issue, and we urge quick passage of their long-term contracts for renewable energy measure (introduced in the Senate as S-0111, in the House as H-5002).
In addition to containing the mechanisms for bringing more renewable energy to Rhode Island, the bills require that projects benefitting from long-term projects create jobs in Rhode Island based on those contracts. The proposed legislation also protects ratepayers from the possibility that a rapid decrease in customers using the “standard offer” supply option will result in higher prices for the remaining customers. And while the bill has a minimal floor amount of renewable energy that National Grid must obtain, it also creates a financial incentive to obtain even more if it makes commercial sense to do so.
There are good reasons why an incentive for National Grid makes sense: First, the reality is that Rhode Island is competing with Massachusetts for green energy jobs, and Massachusetts already has implemented an even higher incentive to lure renewable energy jobs to the state.
Second, while there is broad agreement that long-term contracts with stable prices represent a good strategy for ratepayers, just how many such contracts should be signed is impossible to determine without becoming active in the market. By requiring a minimum amount of renewable energy, and also providing an incentive for even more – should it make commercial sense and be approved by the PUC – Rhode Island can achieve the greatest amount of renewable energy usage. And at 3 percent of the long-term contract value, it is a small “insurance” premium against unpredictably larger energy cost increases from nonrenewable sources.
If we can use long-term contracts to entice developers to specify components built in Rhode Island, what do we care if the factory’s products end up being used in Maine or Massachusetts?
And finally, in order to jump-start local green job creation, the proposed legislation does contain a provision that will foster the quick installation of solar projects here in Rhode Island. There is strong logic for specifying a small amount of in-state solar (about 5 percent of the total minimum requirement): Large renewable projects, or renewable energy technology manufacturing, will take some time to come online here in Rhode Island. Meanwhile, solar projects can be installed very quickly, on roofs all over the state, using workers who do not require significant additional training. And given the urgent need for job creation in the state, a small solar set-aside is a great way to jump-start green-collar job creation for the state.
This bill – carefully considered, well-vetted, and broadly supported – is too important to pass on to the PUC and hope for the best. •
Paul Beaudette is president of the Environment Council of Rhode Island. Bob Chew is the president of the wind business of Alteris Renewables. Michael Sabitoni is president of the Rhode Island Building and Construction Trades Council and Erich Stephens is New England Projects manager with Bluewater Wind.
