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Carcieri: Force National Grid to buy renewable energy

Gov. Donald L. Carcieri today called on the R.I. Public Utilities Commission (PUC) to force National Grid, the state's major power company, to sign long-term contracts to buy electricity from renewable energy generators. One of the PUC's mandates is to keep ratepayers' costs as low as possible. In a letter sent to the three commissioners today, the governor argued that requiring the dominant utility to buy renewable energy will provide market incentives for new power sources that will reduce electricity costs in the long run.

Gov. Donald L. Carcieri today called on the R.I. Public Utilities Commission (PUC) to force National Grid, the state's major power company, to sign long-term contracts to buy electricity from renewable energy generators.

One of the PUC's mandates is to keep ratepayers' costs as low as possible. In a letter sent to the three commissioners today, the governor argued that requiring the dominant utility to buy renewable energy will provide market incentives for new power sources that will reduce electricity costs in the long run.

"I believe that besides being an environmentally responsible action, large-scale renewable energy can provide stable, cost-effective electric prices far into the future," Carcieri wrote. "However, to facilitate the construction of such projects, it is necessary that National Grid be compelled to enter into long-term contracts in order to provide lower cost financing for these projects, such as the wind farm I have proposed."

However, the governor also said a cost-effectiveness test should be applied to assure that National Grid only buys competitive-priced renewable energy.

The governor's proposal differs from the policy that would have been adopted under a bill passed by the General... more [truncated due to possible copyright]  

Gov. Donald L. Carcieri today called on the R.I. Public Utilities Commission (PUC) to force National Grid, the state's major power company, to sign long-term contracts to buy electricity from renewable energy generators.

One of the PUC's mandates is to keep ratepayers' costs as low as possible. In a letter sent to the three commissioners today, the governor argued that requiring the dominant utility to buy renewable energy will provide market incentives for new power sources that will reduce electricity costs in the long run.

"I believe that besides being an environmentally responsible action, large-scale renewable energy can provide stable, cost-effective electric prices far into the future," Carcieri wrote. "However, to facilitate the construction of such projects, it is necessary that National Grid be compelled to enter into long-term contracts in order to provide lower cost financing for these projects, such as the wind farm I have proposed."

However, the governor also said a cost-effectiveness test should be applied to assure that National Grid only buys competitive-priced renewable energy.

The governor's proposal differs from the policy that would have been adopted under a bill passed by the General Assembly earlier this year but was vetoed by the governor in June. The measure would have rewarded National Grid for buying renewable energy by adding a small bonus payment for the utility to ratepayers' monthly bills. The bill was supported by National Grid, environmentalists and lopsided majorities in both chambers.

Carcieri, a Republican, argues that National Grid already receives enough compensation because as a regulated utility its prices are fixed under the rules that govern regulated utilities. The bonus payments would give the utility "great monetary benefits without taking any risk," he said in the letter.

Although National Grid did not respond directly to Carcieri's letter on Thursday, the utility did reiterate its support for the bill that was vetoed in June and called for cooperation between industry, policymakers and advocates.

"National Grid supported and participated in the collaborative effort that led to the drafting of legislation related to long-term renewable contracts that was passed overwhelmingly by the Rhode Island General Assembly this year," David Graves, a spokesman for National Grid, said in a statement to Providence Business News. "The company believes that any policy setting on this matter should include the collaborative contributions of environmentalists, energy policy advisors, electric utility companies and those parties engaged in the development of renewable energy."

The reaction from environmentalists, who have sharply criticized the governor's decision to veto the bill passed by the legislature, was cool.

"Environment Rhode Island shares Gov. Carcieri's stated goals of shifting Rhode Island towards more clean renewable energy sources like wind power," Matt Auten, an advocate for Environment Rhode Island, said in an e-mail to Providence Business News. "However, we believe it would be duplicative of past work and a step in the wrong direction for the Public Utilities Commission to take up the issue of long-term contracts again before new legislation authorizing long-term contracts is approved by the General Assembly."

Auten noted the issue of long-term contracts has already been debated twice, and that the PUC has found in favor of the idea as recently as last October.

At that time, the commissioners directed a working group that included the governor's aides to develop a new proposal for requiring long-term contracts, which eventually led to the bill that Carcieri vetoed, Auten said.

He added, "Rather than returning to the PUC for a third time to debate long-term contracts, Environment Rhode Island believes the quickest way to encourage the development of new clean renewable energy sources is for the General Assembly to override Gov. Carcieri's veto."

But the governor continued to defend his veto this morning, calling the General Assembly's bill "fatally flawed."

"Renewable energy projects guaranteed by our ratepayers should be located in Rhode Island and also be cost-effective, and should not allow National Grid to reap monetary benefits without taking any risk."

Spokesmen for Senate President Joseph Montalbano and House Speaker William Murphy said a decision has not been made yet on whether and when to reconvene the General Assembly and attempt to override any of the 49 bills, including the renewable energy bill, that the governor vetoed during the last legislative session. Lawmakers have until January to hold any override votes.

The PUC will likely take up the governor's proposal at its next open meeting, Thomas Kogut, a spokesman for the R.I. Division of Public Utilities and Carriers, said in an interview. The commission has not yet scheduled any future open meetings, according to its Web site, www.ripuc.org.


Source: http://www.pbn.com/stories/...

AUG 14 2008
https://www.windaction.org/posts/16538-carcieri-force-national-grid-to-buy-renewable-energy
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