New General Assembly Bill Addresses Invenergy Power Plant Proposal

Jerry Elmer

On Friday, May 20, Rhode Island Representative Cale Keable, of Burrillville, introduced a bill into the General Assembly that could have profound implications for the proposal of Invenergy to build an unneeded 1,000-megawatt fossil fuel power plant in Burrillville. The bill is H-8240.

Main Point of the New Bill

Under existing law (R.I. General Laws § 44-4-30) the Burrillville Town Council has the power to set the property tax rate for Invenergy at any level it wants. Thus, under existing law, the Town Council could give Invenergy a sweetheart deal by charging one dollar per decade; or the Town Council could drive Invenergy out of Burrillville by charging a million dollars per nano-second. The Keable bill changes this by adding the requirement that, whatever the Town Council does, that arrangement must be approved by the voters of Burrillville in a voter referendum [page 4 of the bill]. This is a very good thing because it makes it much less likely that the plant will be built. In fact, this is true for two separate reasons:

First, many people have been worried that the Burrillville Town Council will make a secret sweetheart deal with Invenergy, and that the people of Burrillville will be cut out of the process. People have been very worried about this, because the people of Burrillville are overwhelmingly opposed to the Invenergy proposal.The Town Council, however, seems (much) more favorably inclined toward Invenergy.

If passed, H-8240 would make it impossible for the Town Council to cut the people of Burrillville out of the process. Any deal the Town Council makes with Invenergy would have to be approved by the voters; and the voters could vote down any tax treaty with Invenergy that does not ensure, with 100% certainty, that the plant is not built.

Second, even the presence of this law on the books would create uncertainty for Invenergy – at least until a tax treaty is negotiated and approved by public referendum. This uncertainty would probably make it more difficult (and maybe impossible) for Invenergy to obtain the necessary funding (loans) to start construction. After all, what lender would put up hundreds of millions of dollars knowing that the Town could tax Invenergy out of existence?

Importantly, in a situation like this, delay (“mere delay”) can actually kill the project. As CLF argued at the EFSB, Invenergy made the election to obtain a Capacity Supply Obligation (CSO) in the February 2016 Forward Capacity Auction of our regional grid operator, ISO New England – before Invenergy had the necessary state permits to build the plant. That CSO begins on June 1, 2019, and it comes with huge financial penalties if Invenergy is not up and running by that time. If Invenergy is delayed in starting construction by even 12 months, Invenergy may be forced to sell out of its CSO (in an effort to avoid penalties) and abandon this project.

Note, importantly, that what I say in that last paragraph is true even if the EFSB grants Invenergy a permit! In other words, if passed, the Keable bill provides a separate and independent way of stopping Invenergy, a way that works even if CLF’s litigation against Invenergy in the EFSB fails.

In this sense, the Keable bill is clearly good for democracy. Up until now, many people have feared that the Town Council would secretly cut a sweetheart deal with Invenergy, despite overwhelming citizen opposition within the Town. If passed, the Keable bill would make that impossible.

Changing the Make-Up of the EFSB?

The Keable bill would also change the make-up of the EFSB by expanding the EFSB from three to nine members [bill, page 1, lines 7 to 14]. I am skeptical about how useful this provision would be, even leaving aside the unwieldiness of a nine-member EFSB. Currently, two of the three EFSB members sit at the pleasure of the Governor (and the provision in the Keable Bill changing this is probably intended to change that status quo). One of the proposed new members under the Keable Bill is the chairperson of the Commerce Corporation, who also sits at the pleasure of the Governor. Of the three “public members” to be added, the union representative will reliably support all new power plant construction, and the person “experienced in energy issues” may very well also reliably support new power plants.

That would be five members of a nine-member EFSB that would reliably support new power plants. While well-intentioned, this provision is probably not a good way to stop the Invenergy proposal, or to constitute a better EFSB.

Summing It Up

The Keable Bill, H-8240, is not a perfect bill – but it is a very good bill for people who don’t want to see a new, 1,000-megawatt fossil fuel power plant built in Rhode Island. The real-world effect of this bill, if enacted, would be to make it much less likely that Invenergy will build its proposed plant.

Update, May 24: I had a conversation yesterday with one of Invenergy’s lawyers, who had apparently read my blog about the Keable Bill, H-8240. In fact, he gave me a preview of Invenergy’s argument against the bill. That argument is really (really!) simple: The Keable Bill is pure NIMBYism that would make it impossible for any large new infrastructure project to be built and sited anywhere in Rhode Island. [NIMBY is an acronym that stands for “Not in My Back Yard.”]  He said that the bill would preclude new development at the state landfill in Johnston, as well as all other big, future infrastructure projects anywhere in the state.

The argument is demonstrably wrong. The portion of the Keable Bill to which the Invenergy lawyer was referring is the portion on page 4 that amends R.I. Gen. Laws § 44-3-30. That law applies only to electricity generating facilities, and only in Burrillville. That is, the Keable Bill, if enacted, would not preclude all infrastructure projects, all over the state.  (In fact, the bill, if enacted, would not even definitely preclude the Invenergy project in Burrillville. All it would do is require that any tax treaty reached by the Town Council and Invenergy be put to a voter referendum in the Town of Burrillville.) The idea that the Keable Bill would apply to the Johnston landfill or to other, non-power-plant infrastructure or projects not in Burrillville is just wrong.

Nevertheless, the fact that Invenergy’s argument is wrong, does not mean that it won’t be used!

Hearing Scheduled: The Keable Bill, H-8240, is scheduled for hearing in the House Environment Committee on Thursday, May 26, at the Rise of House, which usually occurs between 4:00 and 5:00 PM. The hearing will be in the House Lounge, on the second floor of the State House.

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