N. Grid appeals PUC ruling on renewables

PROVIDENCE - National Grid has appealed to the R.I. Supreme Court a ruling by the R.I. Public Utilities Commission (PUC) ordering Grid to sign long-term contracts for the purchase of renewable energy. The utility argues that current law does not allow it to do what the commission wants.

In its ruling on March 16, the PUC unanimously rejected National Grid's electricity supply plans for 2010, writing that "contrary to the plain language" of the commission's rulings on the subject, "the plan did not contain any long-term contracts for renewable energy resources."

The PUC ordered Grid to file new proposals by April 16. The utility's current supply plan, which has been in place since 1998, expires at the end of this year. National Grid has approximately 478,000 electricity customers in 38 communities in Rhode Island.

In response, attorneys for National Grid filed an appeal of the ruling with the state's top court this week. They argue that under existing legislation, the utility has few options for renewable energy purchases.

David Graves, a spokesman for National Grid, said the utility only had seven days to file a court appeal and wanted to keep its options open. "We believe in long-term contracts, but we just think under current state law we're prohibited from doing it as defined by the PUC," Graves told Providence Business News today.

The utility's argument puts it at odds with Carcieri administration officials, who have said they think the PUC has all the authority it needs under current law.

Graves said the court filing is "just something we needed to do to keep that option open for us, but certainly it doesn't preclude continued discussion on the topic." He emphasized that the utility hoped to avoid a protracted fight with its regulators.

Graves also said National Grid continues to support a bill in the General Assembly vetoed by Gov. Donald L. Carcieri last year that would set out guidelines for long-term contracts.

The bill would also have ratepayers give National Grid small bonus payments when it buys renewable energy, an inducement advocates say would make the utility a more effective partner in efforts to boost alternative energy in the state.

In an interview, the PUC's senior legal counsel, Cindy Wilson-Frias, said Grid may also file a motion with the PUC asking the commission to clarify its March 16 ruling. If that resulted in an answer that satisfies the utility, a court fight could be avoided, she said.

"I think that if they file a motion for clarification, that clarification should be helpful to everyone involved," Wilson-Frias said, although no such motion had been filed as of Thursday.

Asked if it were a common occurrence for National Grid to take the PUC to court, Wilson-Frias said: "If you had asked me a couple years ago, I would have said no. But I actually have four cases I worked on right now that are up at the Supreme Court."

In the ruling at issue, the three commissioners cited evidence from previous PUC proceedings that both they and National Grid had understood that renewable-energy requirements mandated in state law would be put into force starting in 2010. One law specifically calls on National Grid to buy at least 3 percent of the electricity it sells to Rhode Island customers from renewable sources.

The PUC rejected an argument advanced by National Grid's attorneys that the renewable energy mandate should be handled separately from the utility's energy purchasing plans for its Standard Offer Service, which is what 99 percent of Rhode Island ratepayers and many small- and medium-sized businesses use to buy their electricity.

The PUC's ruling also pointed out that National Grid has previously argued that it should not have to enter into long-term contracts because they could result in higher costs that drive residential ratepayers into the competitive electricity market. "The commission was not persuaded in 2005 and 2007 and remains skeptical of National Grid's argument today," they wrote.

In the same ruling, the PUC also for the first time defined a "long-term" contract as one that lasts for at least 10 to 15 years.

Although the commissioners declined to specify exactly what percentage of the electricity supply must come from renewable energy, "suffice it to say," they wrote, "it needs to be more than de minimus, but does not need to match 100 percent."