Governor’s Veto of Renewable Energy Bill Viewed as Backing National Grid
July 19, 2021
PROVIDENCE — Gov. Dan McKee issued the first veto of his administration to block a bill aimed at moving costs from renewable energy companies to National Grid, while also possibly affecting the siting of future transmission facilities.
The veto resulted in criticism from supporters of the legislation, including some who said the action benefited National Grid, the investor-owned utility providing the bulk of Rhode Island’s residential and commercial electricity and gas.
McKee issued the veto July 6, accompanied by a message saying the legislation effectively shifted “millions of dollars of costs” from renewable energy developers to customers of National Grid.
“Ratepayers already pay for the renewable energy purchased by National Grid from these projects and, as written, this bill would increase those costs with no oversight by any regulatory agency,” McKee wrote.
The Democrat, who took office in March following former Gov. Gina Raimondo’s departure to join the Biden administration as commerce secretary, said the bill would likely cause companies to increase electric transmission infrastructure to connect renewable projects sited outside population centers to the electric users within them, which he said would compound their impact.
“Under current law, developers must weigh the tradeoff between optimal sites and sizing which may have lower initial project costs for the developer against the potentially substantial costs of impacting the transmission infrastructure,” according to McKee’s veto message. “Transferring costs to rate payers would eliminate any incentive for the generators to consider the costs to the transmission system in their siting and development decisions because rate payers would bear all of the cost responsibility instead of the generators, regardless of the location or size of the projects.
“Before the State considers shifting significant additional transmission costs to ratepayers who already are funding the projects through rates, we need to understand how these additional costs fit within the suite of investments necessary to achieve cost-effective, comprehensive, economy-wide decarbonization.”
The bill (H6066) titled, “Distributed Generation Interconnection,” would have required an annual fee schedule overseen by the Rhode Island Public Utilities Commission (PUC) for renewable energy project operators seeking “order of magnitude estimates” and prevented the electric distribution company from charging more than the costs of conducting the impact studies.
“The purpose of the impact study fee schedule is to assure that an applicant is responsible for paying a reasonable amount of the cost of the study in advance of installing the distributed generation, but that the advance cost is justified and is not so high as to discourage an applicant from pursuing a project,” the bill text stated.
The legislation — sponsored by Rep. Edward Cardillo Jr., D-Johnston, and Sen. Frank Ciccone, D-Providence — passed the House on June 23 and the Senate on June 29, two days prior to the legislature adjourning for the summer.
“The governor would like to rework the language so the rate user is not affected,” Ciccone told ecoRI News.
Ted Kresse, communications director for National Grid Rhode Island, said the bill “was a blatant attempt to absolve developers of large-scale distributed generation projects to pay their fair share of the costs to interconnect their projects to the electric power system.” He added that the measure would ultimately have affected customer costs.
“As our testimony expressed when the proposal was debated, this legislation could have a significant impact on Rhode Island ratepayers, shifting much of the current costs of interconnection, which are traditionally and by law carried by distributed generation developers, on to the backs of our Rhode Island customers,” Kresse wrote in an email. “It would shift tens of millions of dollars of transmission system modification costs caused by the developers of large solar projects to Rhode Island ratepayers. In addition to the high costs of upgrading the distribution network to handle the significant loads these projects entail, it would also include the costs of the needed transmission studies, which can range anywhere from $10,000 to an excess of more than $100,000 depending on the scope.”
The London-based multinational corporation had “interconnected” more than 374 megawatts of renewable energy across the state as of June, including more than 170 megawatts of distributed generation in 2019 and 2020, Kresse said.
The renewable energy bill was publicly supported by Green Development LLC, a Cranston-based installer of wind and solar energy systems. Company spokesperson Bill Fischer claimed National Grid changes its electrical pricing without warning or justification with the assistance of the PUC, which he said has effectively become an extension of National Grid by enabling the company to adjust its pricing at will.
“We don’t fault the governor,” Fischer said of McKee’s veto. “We fault the PUC for once again carrying National Grid’s water.”
Green Development has renewable energy projects, including solar and wind, amounting to 75 megawatts of power in production, as well as another 70 megawatts expected to be online by the end of this year. The state will remain unable to reach a goal set by the Raimondo administration of 100 percent electricity generation from renewable sources by 2030 if the PUC continues allowing National Grid to dictate its policies, according to Fischer.
“They have lost their way,” he said, adding that in the past two years the commission failed to produce positive action for the renewable energy sector. “The General Assembly needs to take a hard look at the PUC.”
Former state legislator and lieutenant governor candidate Aaron Regunberg said distributed generation of renewable energy “threatens National Grid’s business model.”
“That’s why they oppose it, and why they have such a profound conflict of interest in administering interconnection charges,” Regunberg wrote in an email. “Distributed clean energy provides significant benefits to the grid and to ratepayers by reducing the need to move electricity long distances. It’s a more democratic way of producing energy, and it’s urgently necessary if we want to save our civilization from climate apocalypse.”
Regunberg said he was disappointed to see McKee “parrot” National Grid’s positions with his veto, especially as Americans suffer through a climate crisis and “catastrophic heat” resulting in deaths.
“Entire towns are getting incinerated by wildfires,” Regunberg said. “If you’re not all in on climate action right now, you have no place in any position of power, let alone the governor’s office. Here’s hoping McKee switches gears fast and starts valuing the future of our species over the good graces of a for-profit utility holding company.”
In response to criticism that he vetoed the bill, a spokesperson, in an email to ecoRI News, wrote, “It has been a priority of the Administration to address the climate crisis and work towards a net-zero emission future. However, there were simply not enough protections in place for ratepayers, who, under the legislation, would have been responsible for paying millions of dollars in upgrade costs in addition to the rates they are already paying to fund renewable energy projects.”
She noted the PUC has estimated that cost could be nearly $54 million.