Conservation Law Foundation Blasts PUC Decision: “Decoupling” Seen as Step Backward in Fight Against Climate Change

Contact:
Jerry Elmer, Staff Attorney
(401) 351-1102
JElmer@CLF.org

PROVIDENCE, RI (November 24, 2008) — The Conservation Law Foundation (CLF) today blasted the Public Utilities Commission (PUC) for a decision in which the PUC declined to approve a proposal for “decoupling” of gas prices. CLF said the ruling would harm both consumers and the environment.

Decoupling is an important step forward in the fight against climate change,” said Jerry Elmer, the CLF Staff Attorney who litigated the case for CLF at the PUC. “Decoupling would have been good for consumers because it would have lowered utility bills, and it would have been good for the environment because it would have removed a major obstacle to conservation and efficiency.” Elmer vowed that CLF will continue the fight for decoupling in Rhode Island in 2009 when the PUC considers electricity prices.

PUC Docket # 3943 addressed several controversial issues including gas distribution pricing and profit margins for Rhode Island ’s dominant gas utility, National Grid. The PUC handed down its decision in the Docket at a hearing today.

Decoupling would have meant a major change from traditional gas pricing. With traditional utility pricing, the more commodity (in this case, gas) the utility sells, the greater the utility’s profits. This makes it difficult for utilities to fully back environmentally important efficiency and conservation efforts, because if such efforts are successful utility profits go down. Decoupling breaks the link between the utility’s volume of sales and profits. Had the PUC approved Grid’s plan for decoupling, the PUC would have set Grid’s allowed profits in advance; any additional profit Grid took in would have been returned to customers.

This Docket presented an unusual alignment of parties. CLF has often litigated in the PUC against Grid when CLF believed that Grid was not fully living up to its environmental obligations under applicable law. But in this docket, CLF supported Grid’s proposal for decoupling. “Grid is to be commended for supporting decoupling, and we are very disappointed with the PUC for not approving it,” said CLF Attorney Elmer.

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The Conservation Law Foundation (www.clf.org) works to solve the most significant environmental challenges facing New England . CLF’s advocates use law, economics and science to create innovate strategies to conserve natural resources, protect public health and promote vital communities in our region. Founded, in 1966, CLF is a nonprofit, member-supported organization with offices in Maine , Massachusetts , New Hampshire , Rhode Island and Vermont .