Gov. Donald L. Carcieri today vetoed a measure that was the centerpiece of a package of renewable-energy legislation approved by the General Assembly.

The measure - An Act Relating to Public Utilities and Carriers ( 2008 S 2849Aaa, sponsored by Senate President Joseph A. Montalbano, D-North Providence, Lincoln and Pawtucket; and 2008 H 7916Aaa, sponsored by House Majority Leader Gordon D. Fox, D-Providence) - aims to promote large-scale renewable-energy projects by setting conditions under which utility company National Grid would enter into long-term contracts for renewable energy.

Some critics have charged that the measure would increase local electrical rates. But in a June 3 statement, Montalbano said that, "in this volatile era of energy prices, stabilizing the market will benefit consumers - and actively, aggressively facilitating the development and use of renewable energy will benefit the planet."

Environmental action groups have praised the measure, which also has drawn support from labor unions and energy developers, installers, marketers and distributors. "National Grid and Rhode Island's General Assembly are to be complimented for the constructive approach they have adopted on renewable energy," Jerry Elmer, a Providence lawyer for the Conservation Law Foundation, a New England environmental group, had told Providence Business News earlier this month. The legislation "will spark a new generation of renewable energy projects that will play a significant role in reducing greenhouse gas emissions in our region," Elmer said. (READ MORE)

The measure cleared the Senate by a resounding 34 to 1, and the House by a vote of 53 to 11.

In his veto message this morning, Carcieri wrote: "It is with much regret that I find it necessary to veto this legislation.

"Renewable energy has great potential for powering our homes and businesses as well as our economy. Rhode Island is poised to be a pioneer in emerging technologies of wind and wave energy, and I'm confident that in due time, we will fulfill my goal of securing at least 20 percent of our energy from renewable resources."

But, he added, "unfortunately, I believe the legislation before me today fails to balance our desire to invest in renewable energy with the realities that rate-payers currently endure."

He faulted the measure for the 3-percent incentive it would pay National Grid on its large-scale purchases of renewable energy. "Normally, regulated returns are earned by companies as either a return for investing capital or taking a risk ... In this case, National Grid does neither, thus rendering any bonus unnecessary and unearned."

He also faulted the legislation for not requiring "does not require that projects funded by our ratepayers be located in Rhode Island. ... I'm confident that our state can and will produce renewable energy at competitive market prices, and I'm sure that projects located here will provide more jobs and more opportunity for our citizens."

His third complaint was about "perhaps the most troubling provision ... the guaranteed set-aside for a Rhode Island-based solar energy project(s). While it's encouraging to see a Rhode Island project get priority, it's unfortunate that the General Assembly picked perhaps the costliest renewable technology ... [for] preferential treatment."

The state "can come up with a better way to support investment in renewable energy," Carcieri said, adding: "We can and will balance the needs of our environment, our economy and our ratepayers - but not with this legislation."

The measure was one of three vetoed today by Gov. Carcieri. The others were a measure that would build an $88 million courthouse in the Blackstone Valley; a bill that would extend to three years the statute of limitation for claims under the Civil Rights Act of 1990; and a measure that would bar the use of radio-frequency identification (RFID) tags to track students in schools or on school buses or other transportation.

The energy-bill veto drew a joint response today from Assembly leaders Montalbano and Fox.

"I am deeply disappointed that Governor Carcieri has decided to veto legislation five years in the making that would have put Rhode Island at the forefront of the renewable energy economy," wrote Fox, the House majority leader. "The clean energy sector is one of the few bright spots in today's economy and is well-positioned to grow exponentially over the next decade.

"Rising fossil fuel prices, the economic downturn, the threat of global warming and our dependence on foreign energy is creating a perfect storm that is impacting the life of everyone in Rhode Island. ... Wind, solar and other renewable energies can create jobs and increase our energy independence. ... Sadly, Governor Carcieri has decided today that the energy status quo is acceptable, and that his office knows more about renewable energy development than all of the renewable-energy developers and environmental advocates that support this legislation," Fox added.

"With the governor of Massachusetts set to sign a similar renewable energy bill into law next week, I hope Governor Carcieri understands that his veto is raising a caution flag in Rhode Island just when the light is turning green in Massachusetts."

Montalbano, the Senate president, was even harsher in his comments. "The governor's recent approach to increasing the generation of renewable energy in Rhode Island is to issue a request for proposals for developers who might be able to build a wind farm, in a patch of ocean that they might get permits to build in, along a timetable that they might meet, and with financing that they might obtain. Like parts of his budget proposal, we'll believe the outcome when we see it," he wrote.

"The governor quotes estimates of the high cost of solar energy. The most recent studies show that with new photovolatic technology and the production of solar-grade silicon, solar energy costs are declining - as much as 25 percent in the next year. This decline in cost is not reflected in [Carcieri's] estimates. ... I would also note that ... solar production in the summer months will offset the power brown-outs that could occur from air conditioning use. [And] solar will come on line faster than wind power, offering the state a renewable energy source years before an offshore wind project is operational," he added.

"Finally," Montalbano said, "the bill has at its core the purpose - and contains the mandatory provision to ensure - that there is a direct and substantial economic development benefit to the State of Rhode Island from any long-term renewable energy project that is developed. By vetoing this bill, the governor is vetoing a landmark economic-development bill."

The environmental community also reacted with disappointment to the veto.

"Our region is facing a climate-change emergency, and the Rhode Island General Assembly recognized that fact when it passed the long-term contracting bill to boost development of renewable energy projects, like wind and solar," wrote Elmer, of the Conservation Law Foundation. "Governor Carcieri's veto is extremely disappointing, and we hope the General Assembly will override the veto promptly to help set the stage for a clean energy future."

"Long-term contracts with renewable energy projects help make clean energy happen by getting entrepreneurs the stability they need to get financed," John Rogers, senior energy analyst at the Union of Concerned Scientists, said in a statement today. "This legislation will benefit Rhode Island consumers, its growing clean energy industry, and the planet. It's time to get it done and get Rhode Island moving forward."

"This clean energy legislation will shift Rhode Island towards wind, solar and other renewable energy sources," added Matt Auten, advocate for Environment Rhode Island. "Now is the time for Rhode Island to start moving towards energy independence - and that's why we are advocating for a veto override."

Information about the R.I. General Assembly, including details of legislation before the House or Senate, is available at www.rilin.state.ri.us. News from the R.I. Governor's Office, visit www.ri.gov/governor.