PROVIDENCE - An amendment to a state renewable energy law is expected to encourage wind and solar power by making it easier for projects to be paid when they produce more electricity than they use.

The amendment, signed by Governor Carcieri this month, reduces restrictions on a law enacted last year that for the first time in Rhode Island allowed "net metering."

The law was designed to compensate green energy producers for surplus electricity they pump back into the power grid. But language in the law addressing the number of electricity accounts that could receive the credit was vague. The state Public Utilities Commission interpreted the language to allow credit for up to five accounts only.

But that created a potential problem for municipalities that can have dozens of accounts. If they were to go forward with a renewable energy project, they would be able to designate their five largest accounts for credit. But if the electricity pumped back into the grid is more than the amount used by those five accounts, they would not be compensated for the excess. They would essentially be giving away power for free.

That's exactly what the Town of Portsmouth was facing after it installed a wind turbine at its high school in March. The town has about 30 electricity accounts covering power used at each of the public schools, the police station, Town Hall and other municipal buildings, according to Gary Gump, a member of the Portsmouth Economic Development Committee and a coordinator of the wind energy project.

The five accounts selected to receive credit included the high school and middle school - which combine for nearly half of the town's electricity usage - and an elementary school. There was no question that when school was in session any credit the town received wouldn't be greater than the amount of electricity used by the schools. But, said Gump, what about in the summer when the schools are closed and the turbine's blades are still spinning? Would the town lose out on credit it was due?

Because of legislation sponsored by Rep. David Segal and Sen. Joshua Miller that scenario won't be realized. Their bill increases the number of accounts that can be credited to 10 and, in a more far-reaching change, offers another option: energy producers can receive a check in compensation, which means they can distribute the credit to as many accounts as they want.

"Our goal last year, and what we've achieved this year, is to make it so that a proprietor of an energy installation can accrue the full benefit of the electricity they're generating," Segal, D-Providence, East Providence, said in an interview yesterday. "You're getting paid now for all the electricity you're producing."

Governor Carcieri signed the legislation into law yesterday, according to his office. The amendment is retroactive to June 1.

Miller, D-Cranston, Warwick, said in an interview that the change should accelerate investment in green energy.

Gump said a consortium of nine East Bay communities, including Portsmouth, that is looking at investing in wind-power projects could benefit from the new law.