PUC greenlights price cuts for solar projects, but votes down proposed equity incentive

Updated at 2:05 p.m. on Feb. 19, 2021.

WARWICK – Commercial and large-scale solar projects will see a drop in the 15-year tariffs paid by National Grid under prices approved by the R.I. Public Utilities Commission on Thursday.

The commission’s unanimous vote, part of the utility company’s proposed 2021 Renewable Energy Growth Program, came quickly and with little discussion. However, developers contacted by Providence Business News previously expressed concern that the drop in prices would make it difficult to justify the higher costs associated with renewable energy projects, with one threatening to “walk away” from state projects if the cuts were approved.

The annual Renewable Energy Growth Program aims to incentivize green energy by offering long-term, fixed-price contracts to buy excess energy from homeowners, businesses and developers that build wind, solar and other renewable energy projects. The 2021 proposal submitted by National Grid also included extra financial incentives for developers that build ground-mounted canopies on parking lots – continuing a pilot program that launched in 2020-  and for community remote solar and wind projects in which at least 20% of users subscribed to receive energy from the project meet low-income requirements.

The carport pilot program extension was approved by a 2-1 vote, with Commissioner Abigail Anthony voting it down. But the second incentive to help low-income customers benefit from the electricity bill saving by subscribing to remote, green energy projects was voted down.

- Advertisement -

Commission members blasted the proposal for failing to address the true problems of socioeconomic inequity, while creating higher costs for all ratepayers, many whom have struggled to pay their bills amid the COVID-19 pandemic.

“It is at best, a poorly developed concept and at worst, a gimmick and thinly veiled attempt by the utility company to increase their profits through the REG program while claiming to be doing in the name of equity,” Anthony said.

Chairman Ronald T. Gerwatoski also had harsh words, pointing out that the proposal not only failed to solve the problem it sought to address, but also was based upon an “illusion” that project subscribers were using solar or wind energy, when in fact they were simply getting a discount on their electric bills based upon energy generated elsewhere.

Ian Springsteel, National Grid’s director of U.S. regulatory strategy, in a January public hearing on the topic agreed that the community remote distributed generation program is in some ways a “fiction” but defended the benefits of savings for participating customers.

National Grid analysis shows that low-income customers, who must meet requirements showing they receive certain types of federal or state assistance such as food stamps or social security benefits, comprise 8% of total residential customers, but just 3% of those who benefit from small-scale solar projects under the Renewable Energy Growth Program. The proposed 3-cents-per-kilowatt-hour adder would provide “meaningful customer bill savings, as well as additional utility savings and economic benefits,” according to testimony submitted by Springsteel on behalf of National Grid.

But the idea that only 20% of low-income customers would benefit from a given project, while 100% of ratepayers would see rates rise to offset the adder, did not sit well with commission members. They also objected to the idea that only those in “good standing” – not with outstanding bills- could opt to participate.

The R.I. Division of Public Utilities and Carriers, in testimony submitted by consultant Michael Brennan, also opposed the incentive, stating there was “no compelling public policy reason to support an adder that picks winners and losers among low income ratepayers when all low income ratepayers need assistance paying their bills and when all low income ratepayers will be paying for the adder through the RE Growth Factor.”

Brennan also wrote that since one-third of the proposed adder is earmarked for administrative costs, the proposal essentially amounts to taking 3 cents from every ratepayer and giving 2 cents back to just a few of the low-income customers. The estimated 50 to 150 low-income customers who could benefit from the program represents less than one-third of 1% of all low-income customers in the state, according to Brennan.

Asked for a response to these criticisms, Ted Kresse, a National Grid spokesman, wrote in an email on Friday, “The proposed adder, which had stakeholder support from others, including the Northeast Clean Energy Council, was intended to provide a first step toward expanding low-income customer participation in RE Growth by increasing enrollment in CRDG projects using a similar approach to other states’ renewable energy programs. The company remains committed to addressing low income customer issues in fulfilling its clean energy goals, and will consider alternatives, as the commission recommends.”

Commissioners in the Thursday vote suggested several preliminary ideas for how to better address equity issues, with plans to discuss new proposals at a future meeting. The new prices for the 2021 Renewable Energy Growth program take effect for small-scale solar programs on April 1, with a series of three competitive bidding rounds for commercial-scale projects, the first of which will happen in April or May.

The 2021 program aims to incentivize 57-megawatts of “nameplate” of maximum renewable energy through various sizes and types of energy projects.

Nancy Lavin is a PBN staff writer. You may reach her at Lavin@PBN.com.

Updated to include comments from National Grid.

Purchase NowWant to share this story? Click Here to purchase a link that allows anyone to read it on any device whether or not they are a subscriber.