Report: Expanded DG Program an Economic Win
May 28, 2014
PROVIDENCE — A new report emphasizes the economic and environmental advantages of having more solar panels and wind turbines in Rhode Island, but which benefit makes the best argument for expanding renewable energy in the state?
The 50-page report by the Brattle Group, of Cambridge, Mass., conducted at the behest of the General Assembly and the Office of Energy Resources, advocates continuing subsidies for renewable energy programs, in particular the distributed generation contract program, which offers incentives for large wind and solar projects.
Since 2011, the distributed generation (DG) program has yielded more than 20 wind and solar systems in 15 cities and towns across the state. The fixed-pricing system, launched as a pilot project in partnership with National Grid, is slated to expire by the end of this year.
Legislation (S2690, H7727) would extend the program for five years and quadruples the electricity allotment available. Both bills are expected to be voted out of committee during the first week of June.
The Brattle report concluded that benefits of an expanded DG program would include an estimated $556 million in economic output across 25 years, while creating 246 full-time jobs. It would reduce carbon dioxide and other pollutants from power plants emissions preventing $22 million in damages to crops and human health.
The report noted the need for diversifying the sources of electricity. Currently, nearly 99 percent of Rhode Island’s power is generated with natural gas. Less than 1 percent comes from renewable energy. In 25 years, even with the 30-megawatt Deepwater Wind project up and running and the extension of the renewable energy incentives, only 4 percent of Ocean State power would come from wind and solar, according to the report.
The cost to electricity ratepayers for the program is an estimated $17.25 million a year. The average electric bill would increase $1.43 a month, or $325 across the five years of the DG program and other initiatives that boost Rhode Island’s small-scale solar-energy sector.
Detractors of the legislation say the added cost is felt most by businesses.
“The resulting rate increases will push more and more businesses away [from Rhode Island] and contribute to job losses,” according to a letter from OSTPA, a Rhode Island-based Tea Party group, in opposition to the Senate bill.
In all, the annual tradeoff is $17.25 million to fund the programs versus $30.65 million in economic benefits.
On his blog for the Conservation Law Foundation, staff attorney Jerry Elmer, an author of the DG program, said the economic benefits support the case for continued subsidies for local renewable energy.
“Renewable energy costs a little bit more, but helps to create local jobs, benefits the local economy, and is much less polluting,” he wrote.
Elmer also wrote that the economic argument, much the same way the Supreme Court invoked it to uphold the constitutionality of the Civil Rights Act in 1964, isn’t the true motive for expanding renewable power.
“The fact of the matter is that we environmentalists support renewable energy because there is a climate change emergency in the world. The world is hurtling toward a human-created disaster because of carbon pollution. And, although we recognize that there are economic benefits from renewable energy, we do not view renewable energy as primarily a job-creation program,” he wrote.
Rep. Deborah Ruggiero, D-Jamestown, sponsor of the House legislation to extend the DG program, said promoting the economic benefits is necessary for getting bills passed. In particular, she said, the new House speaker, Nicholas Mattiello, D-Cranston, is leading with a businesses-first philosophy.
“I have tried to educate him and a lot of colleges on the economic benefits [of the bill],” she said.
Homegrown renewable energy, she said, reduces the reliance on fossil-fuel power generated in other states. Local developers are also clamoring for DG contracts, Ruggiero said.
Environmentalists, she said, can champion either motive for expanding renewable energy. “It’s not only good economic policy it’s also really good environmental policy,” Ruggiero said. “It’s not mutually exclusive.”
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