PUC Sides with R.I. Utility in Dispute Over Renewable Energy
October 17, 2022
WARWICK, R.I. — State regulators have sided with Rhode Island Energy over a regional solar developer in a dispute over whether the utility was unfairly running the state’s renewable energy program.
Brooklyn, N.Y.-based Ecogy Energy LLC alleged the utility company had unfairly denied six renewable energy projects new certificates of eligibility (COE) or new bids earlier this year, something Ecogy said it had no trouble acquiring in previous years when National Grid was the owner of the state’s utility.
Over the summer Ecogy filed a dispute resolution petition with the Rhode Island Public Utilities Commission (PUC), arguing that without a re-bid the six projects would be economically unviable and may never see completion.
PUC commissioners rejected Ecogy’s petition last week by a unanimous vote.
“I think it’s really straightforward that Ecogy should not be eligible to terminate to apply for new COEs while holding on to existing COEs,” commissioner Abigail Anthony said. “I thought about the arguments we heard from the [Division of Public Utilities and Carriers] and from the company, and there’s just a commonsense part as to what is the meaning of a contract, and how the auction process works and what is expected when you hold onto a contract.”
The state’s Renewable Energy Growth Program (REG) is run by Rhode Island Energy to help promote and install more renewable energy resources of all sizes across the state. Once the projects are completed, the program allows a customer or a developer to sell generated electricity back to the utility at a fixed price for a period of 20 years.
Interested project developers blindly bid their proposals to Rhode Island Energy, which is obligated to choose the projects at the lowest possible price for ratepayers, within certain constraints.
The state’s Distributed Generation Board, which oversees the program, sets the maximum number of megawatts to be allocated annually, as well as ceiling prices for each project, where developers cannot have bids exceeding these prices per kilowatt-hour.
Projects accepted into the REG program are then on a strict two- or three-year timeline to complete, or else the contract is voided.
During oral arguments before the commission last month, an attorney for Rhode Island Energy, Steven Boyajian, accused Ecogy of trying to undermine the program’s bidding process with a bait-and-switch.
“They bid low, excluding other bidders from the process, and now want to raise the bids after the fact,” Boyajian said. “We can’t undo what happened in 2021; we told those other developers their projects could not be awarded a COE.”
Ecogy attorney Robert Taylor told commissioners that between the mandated two-year timeline and the rising costs of materials and supplies from abroad, solar developments were close to economically unviable for the company.
“These are small projects, they’re pretty tightly budgeted,” he said. “So, when things get pushed up dramatically after you bid the first time, it has an impact.”
Taylor also noted the utility itself was partly to blame for increased project costs. At the company’s Pawtucket rooftop site, Rhode Island Energy required additional work be done at the point of interconnection after Ecogy had already submitted its bid and costs for the project, according to Taylor.
In the company’s filings to the PUC, Ecogy argued the current price structure of the REG program was insufficient for renewable energy developers to make a return on projects, thereby forcing any company to rebid during a new program year.
“Even if awarded a higher COE price in the 2022 First Open Enrollment, Ecogy will still not be at a COE price that aligns with the CREST model as meeting the rate of return thresholds that the program models to,” the company wrote in a data request response. “This mismatch is not only affecting Ecogy, but is also undermining the goals and intent of the REG Program as a whole.”
It wasn’t the first time the company argued for higher prices in the program. When commissioners were considering approving the 2022 REG program prices last February, Ecogy submitted comments warning of continuing price increases.
The company indicated during proceedings that it may walk away from its existing projects, which PUC chair Ron Gerwatowski characterized as “absurd.”
Ecogy’s projects under contention included five medium-scale rooftop solar arrays — some of them on Ocean State Job Lots — and one wind project in Tiverton. In 2021, it emerged as the lead company in the category of medium-scale solar, scooping up 10 out of 34 awarded COEs in the first open enrollment that year.
The company had re-submitted the projects in the first open enrollment period this year, where they were rejected by Rhode Island Energy.
Ecogy has given no indication whether it will pull the plug on the six projects. The company did not respond to a request for comment.
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