McKee budget proposes $5M for small-business energy upgrades

Corrected at 5:50 p.m. on Feb. 2

GOV. DANIEL J. McKee's budget proposal includes $5 million for a loan program for businesses to finance energy efficiency projects ./ PBN FILE PHOTO/CASSIUS SHUMAN

PROVIDENCE – Robert “Rocky” Kempenaar, a commercial developer who operates four hotels on Aquidneck Island and is in the approval process for a mixed-use development in Middletown, is shopping for ways to cut his energy bills.

Kempenaar said he has already factored in a 30% increase in expected costs for his next fiscal year budget. And he would like to, at the very least, add solar panels to one of his hotels in the near term to cut its electricity consumption.

“When you are talking about $500,000 a year in electricity costs,” he said of his combined holdings, “it adds up.”

Rhode Island companies of all sizes are looking for ways to trim costs for heat and electricity amid rising rates this winter and looking to state leaders for help.

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Legislative leaders, however, have yet to commit to any new proposals, including one offered by Gov. Daniel J. McKee targeting small businesses with less than $2 million in annual gross revenue. The budget proposal allocates $5 million in the first fiscal year for an energy efficiency program, run through R.I. Commerce Corp.

According to Commerce, there are more than 98,000 small businesses in Rhode Island.

Kempenaar Real Estate is too big to qualify for the new program proposed by McKee but could get help from the existing Commercial Property Assessed Clean Energy program. Administered by the R.I. Infrastructure Bank, that program provides below-market fixed-interest loans to qualifying businesses with limited capital to “green” their operations by implementing clean-energy projects.

The program “allows owners of commercial real estate to access affordable, long-term financing for qualifying energy efficiency, renewable energy generation, and other clean energy or related environmental health and environmental safety improvements on eligible properties,” according to the RIIB website, which notes as one example a $450,000 20-year loan approved for McQuade’s ACE Hardware in Westerly to install a 200-kilowatt rooftop solar array, which now generates more than $50,000 annually in electric savings and is projected to save more than $1 million over the life of the system.

Kempenaar was not familiar with the program but is interested in any help state leaders can offer.

“We will certainly be knocking on the governor’s door this year” seeking help, he said. “All you can do is throw some darts at the board and see what hits.”

State Republican lawmakers in Connecticut recently released a series of proposals to address rising energy costs, including moving charges resulting from public policy decisions from ratepayer bills to the state budget, adding nuclear and hydro power to the state’s renewable energy portfolio, and increasing utility rate oversight, which they said will save a combined $362 million in annual energy costs.

Does Rhode Island need to do more to help businesses with energy costs?

“Gov. McKee is focused on providing relief – and making it easier to do business in Rhode Island,” said Lindsay Russell, Commerce’s deputy director of communications. “We know that increasing energy costs are placing a strain on Rhode Island’s small businesses. Secretary [Elizabeth] Tanner looks forward to working with Gov, McKee and the General Assembly to secure these dollars and ultimately launch the [proposed small-business] program after General Assembly passage.”

Senate President Dominick J. Ruggerio said that “easing the burden” of rising costs “is a top priority” in the current session.

“As costs for families and businesses remain high across the board, we are committed to holding the line on taxes and reducing the burden wherever possible,” he said. “We will closely evaluate the governor’s budget plan for the coming year.”

Larry Berman, spokesman for House Speaker K. Joseph Shekarchi, was noncommittal when asked about McKee’s proposal, but noted the House Finance Committee will begin holding public hearings “on all aspects of the governor’s budget proposal, including the energy initiative.”

“Should the House feel that more action is warranted after the hearings, it could take appropriate action,” he added.

During Providence Business News’ 2023 Economic Trends Summit on Jan. 26, Julietta Georgakis, chief of staff for the R.I. Executive Office of Commerce, said McKee’s proposal should be seen as “short-term fix” and not a holistic solution to the energy prices.

“For long-term fixes we must become less dependent on fossil fuels,” she said.

(CORRECTS throughout with details on the Commercial Property Assessed Clean Energy program, which is separate from a new program proposed by Gov. McKee; minor edits.)

Christopher Allen is a PBN staff writer. You may contact him at

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