This post is the first in a series about the new Distributed Generation bill.
A significant new bill designed to dramatically increase the amount of clean renewable energy generated in Rhode Island has been introduced into the 2014 session of the General Assembly. The lead sponsor of Senate Bill-2690 is Chair of the Senate Environment Committee Susan Sosnowski; the lead sponsors of House Bill-7727 are Representatives Deborah Ruggiero and House Environment Chair Arthur B. Handy
I was pleased and honored to have worked over a period of months with the bill’s sponsors and with other collaborators – including National Grid and the New England Clean Energy Council – to craft the bill.
If this new bill passes, it will quadruple the size of Rhode Island’s existing Distributed Generation (DG) program. DG involves the development of projects that produce renewable energy – like solar panels on residential rooftops or a single wind turbine at a town hall or school – rather than utility-scale projects like Cape Wind or a large land-based wind farm. While both types of projects (large and small) are important to developing a renewable energy future, it often takes different laws, providing different financial incentives, to get each type of project built.
Rhode Island’s current DG program was enacted in 2011 as a pilot program designed to get 40 megawatts (MW) of DG projects up and running over a four-year period. The pilot program has worked exactly as it was intended; so far, 18 separate renewable energy projects have been approved and are under construction in Providence, East Providence, Portsmouth, Lincoln, Westerly, Bristol, West Greenwich, East Greenwich, Hopkinton, Middletown, Cumberland, North Kingstown, North Smithfield, and West Warwick.
Still, the pilot program was – well, a pilot program. As such, it was relatively small. In contrast, the newly introduced bill would ramp up DG development to an additional 160 MW over the next five years.
The bill is designed especially to facilitate rooftop solar projects for residences and small businesses by giving home and business owners a generous financial incentive for these smallest projects – and by making the process for getting that incentive very easy. Solar developers anticipate that these provisions will jump-start a strong and robust rooftop solar industry in Rhode Island.
The bill also has specific provisions designed to facilitate (and pay for) non-solar DG projects, like wind and small, local hydro. Like Rhode Island’s existing DG Statute, the new bill creates a mechanism for setting payments for DG owners – payments that are designed to be high enough to get projects actually built, yet low enough to still be competitive.
The new bill would also remove the aggregate statewide limit (currently at 3% of statewide electricity load) on net metering. Utilities and owners of small DG projects use net metering to track how much electricity these projects produce – and to make sure that the owner of the project gets properly paid. Most people have electricity meters from the utility that run one way – measuring and then billing a ratepayer based on how much electricity she uses in a month. With net metering, the ratepayer gets a meter that runs both ways. When the ratepayer produces more electricity than she actually uses, the electricity meter actually runs backwards. In all cases, the ratepayer won’t pay for that unused electricity, and, in some cases, the utility will end up sending the ratepayer a check at the end of the month for the excess electricity she put back into the grid.
Net metering provides an important way for individuals and businesses to pay for the renewable energy projects they own. Until now, Rhode Island – like most states – has capped how much net metering can be done in the state. This bill removes that cap – a goal that CLF has been fighting for in the State House for years. If passed, Rhode Island will become one of the first states in the country to remove all caps on net metering.
In future blog posts, I will discuss two additional features of Rhode Island’s new DG Bill. Both are important, because they are designed to remove major, existing disincentives to utility company support for developing a robust renewable energy future. One provision moves payment for DG projects away from contracts and to tariffs. The other creates a new method for compensating utilities, which will allow for rapid growth of renewable energy distributed generation.
Rhode Island is now poised for rapid growth of renewable DG. The newly introduced bill – H-7727 – represents a major step forward for Rhode Island.