Social advocates, environmental groups and the state’s energy suppliers were generally supportive of a package of four energy bills introduced last month to the state Senate in a hearing held before the Senate’s Committee on Financial Services, Technology and Regulatory Issues.
The bills, according to main sponsor Sen. William Walaska, D-Warwick, are aimed at helping low-income earners pay for their utilities, strengthening current energy oversight and providing more transparency for the ratepayer.
Still, not everyone is satisfied. One of the loudest concerns came from advocates who say that more has to be done to help low-income earners in the short term who are facing utility shut-offs when a moratorium on shut-offs, which began Nov. 1, expires on April 15.
The proposal for the energy affordability legislation, which would redirect a portion of already collected funds from gross-receipt taxes collected from electric and gas companies and a commercial tax on oil into an energy assistance program, would not take effect until July 2007.
Henry Shelton, director of the George Wiley Center in Pawtucket, an organization that largely fights poverty, said that come April 15, there is a potential for 25,000 shut-offs.
The center supports a bill that is currently in the House Finance Committee that would put a cap on the percentage of income – 6 percent – that people eligible for federal energy assistance would pay for their utilities. The bill also has a stipulation that says every month the 6-percent requirement is met, 1/36 of the back bill will be forgiven, leading to elimination of the debt within three years, said Shelton.
This is not a new concept, he said, noting that a similar system is in place for the elderly and people in public housing who pay no more than 30 percent of their income on rent.
The House legislation could provide a bridge through two major shut-off seasons, this April and next April, until the new fund is implemented, said Shelton.
While the reaction was mostly positive, there were some recommendations for changes.
Tom Bessette, vice president of regulatory and government affairs at Constellation New Energy, said that while the legislation would extend the standard offer agreement with National Grid, it does not outline how power will be purchased after 2009, the end of the current agreement.
When the standard offer expires, the state could explore purchasing power – like Massachusetts and Maine – separately for industrial and residential consumers.
Residential customers in Massachusetts still have contracts on a longer-term basis to stabilize prices but large businesses have prices based on three-month contracts that allow them to respond to changes in the market, said Bessette.
Still, the linchpin of the legislation – which could lead to the passage of the other bills – is the procurement of energy legislation that would extend the standard offer to 2019 and promote least-cost procurement of energy with conservation, weatherization and a more varied energy portfolio with renewable energy.
Ron Gerwatowski, vice president of distribution regulatory services at National Grid, said that while the company is generally supportive of the measures in the key bill, the company asked that lawmakers consider separating the provisions in the procurement bill.
The company needs the flexibility to procure energy that would not be available under the standard offer, he said.
A separate but related energy matter may soon provide some much-sought- after relief for the rising electricity rates in the state.
The day before the hearing, National Grid announced it had filed a request with the Massachusetts Department of Telecommunications and Energy to lower electricity rates for Bay State customers as early as May 1.
That development prompted a letter from Gov. Donald L. Carcieri to Michael F. Ryan, executive vice president for National Grid.
“Rising energy costs have put unnecessary strains on Rhode Island families and businesses, many of which are forced to choose between creating jobs and paying their energy bills,” wrote Carcieri.
David Graves, spokesperson for National Grid, said Ryan met with Carcieri on March 24 and told him the company is looking at the possibility of lowering rates in Rhode Island.
This would be welcome news to customers who endured two rate increases last year, one in October and one in December.
The higher energy prices at the end of last year left National Grid with a deficit between money collected and funds spent on electricity totaling $16 million, said Graves. That number, through the end of February, has decreased to $6 million, opening up the possibility for a rate reduction, he said.
Per guidelines of the Public Utilities Commission, if under collections reach $20 million, the company is expected to file for a rate increase, said Graves. Conversely, if the company is making more than it is paying out – a point National Grid is approaching – a rate reduction is in order, said Graves.
The rate increase of Jan. 1 was based on estimates to break even by the end of this year, he said. Graves said the company is optimistic that a rate reduction could be filed with the PUC as early as Friday.
