Provision had been criticized as costing ratepayers to benefit donor developer
PROVIDENCE — In the 24 hours leading up to Wednesday's big House budget debate, Speaker Nicholas Mattiello promised to remove a provision that would have benefited a politically-connected wind-energy developer at the potential expense of rate payers; a top aide to Governor Raimondo said negotiations continued on multiple other fronts; and Republicans primed for battle.
By Tuesday, lawmakers had asked State House lawyers to draft 55 potential amendments to the 321-page budget bill that surfaced in the House Finance Committee past midnight on Wednesday a week ago.
As evidence of how controversial the provision — described by critics as a "favor" to Mark DePasquale, a wind-energy developer and major campaign donor — had become, the number of potential amendments dwindled to 42 after Mattiello announced Tuesday that House leaders intended to yank the item from the budget bill.
As critics read it: The retroactive provision could be used to sidestep a recent decision by the state Public Utilities Commission in a case involving DePasquale, and force electric rate payers to pay millions of dollars more to connect renewable energy projects to the power grid.
Mattiello issued a statement on Tuesday on his reason for removing the entire "renewable energy" provision, known as Article 18, from the budget bill: "Over the past several days, I have received feedback on Article 18 and have reached the conclusion there are pieces of the article that do not need to be in the budget.
"I do not want any distraction to deter from our focus on an excellent budget that offers significant tax relief and is laser-focused on jobs and the economy. For these reasons, we will be removing Article 18 in its entirety from the budget.”
In interviews on Tuesday Mattiello confirmed that DePasquale hosted a fundraiser for him or his PAC within the last year and House Majority Leader John DeSimone confirmed that he has done legal work for Iron Instruction, a company run by DePasquale's brother, Steven DePasquale. ("I don't have any other comment,'' DeSimone said. "He's a client.")
Mattiello also said on Tuesday he was "not aware of all the PUC rulings" when the controversial language, benefiting DePasquale, was inserted into the budget bill. "That puts things in a different perspective. So at this point, we are going to look at all of that."
In other words, the multi-pronged budget item may not be dead yet. Mattiello said pieces of it may resurface in a separate bill. "We are certainly going to try to promote renewable energy,'' he said.
Critics said the provision would, in particular, help North Kingstown-based Wind Energy Development, which owns a wind turbine in North Kingstown, has almost finished the construction of a 10-turbine wind farm in Coventry, and is also replacing a broken wind turbine at Portsmouth High School.
Company CEO DePasquale, his wife and his employees have made more than $64,000 in campaign contributions to state government leaders in recent years, including Mattiello, DeSimone and Governor Raimondo.
DePasquale and his representatives have long complained that interconnection costs for the company’s wind turbines have been too high and that utility National Grid, which owns the power infrastructure in Rhode Island, should pay a greater share. They have not prevailed, however, in their arguments to the PUC.
"The entire section of the budget designed to benefit Wind Energy Development must be removed ... or the whiff of corruption surrounding the State House will only grow stronger,” said state GOP Chairman Brandon Bell, following a in-depth Providence Journal story on the controversy.
Some House Democrats also raised objections to the provision, which contains language that is identical to failed legislation introduced by Rep. John Carnevale, D-Providence, who is vice chairman of the House Finance Committee.
"They got a decision they didn’t like ... they come running to the legislature,'' said Rep. Michael Marcello, D-Scituate, of DePasquale. "We are not experts in tariffs or electric generation."
While this issue has been quieted, for now, Republicans are geared for battle on other fronts, while Democrat Raimondo quietly attempts to reinstate money for more pre-kindergarten sites; revive a $40-million school-construction bond (on top of $80 million already in the budget), and remove the uncertainty on charter-school funding.
The budget bill already contains a proposed income-tax exemption for the first $15,000 in retirement income. The Republicans want to eschew the proposed income-eligibility threshold — $80,000 for an individual, $100,000 for joint filers.
"We are proposing to increase the exemption to the first $20,000 of all retirement income and remove the limits. The cost to the 2017 budget is $6,340,796. We propose using money from the Rebuild RI tax credits to fill the gap,'' said Rep. Robert B. Lancia, R-Cranston.
Added House Minority Leader Brian Newberry, R-North Smithfield: “It is time to begin real middle-class tax relief, which includes phasing out the most egregious and burdensome tax, the car tax, increasing the proposed tax exemption for retirees so it is affordable to remain living in our great state, and eliminating legislative grants.''