Rhode Island Settlement Paves Way for Modern, Consumer-Friendly Electricity Grid and Further Progress on Clean Energy
PROVIDENCE – Today, a comprehensive settlement was filed on behalf of all parties in two related dockets at the Rhode Island Public Utilities Commission: National Grid’s rate case and the Power Sector Transformation docket. Acadia Center strongly supports the settlement because it begins to reform the utility business model, makes significant investments in a modern and efficient electricity grid and new clean energy programs, and lays out a pathway for even more ambitious and rigorous reforms. It also saves ratepayers over $40 million in base rates across three years from National Grid’s original proposal and results in a 25-30% bill discount for low income customers. This settlement follows in the footsteps of the Power Sector Transformation Initiative created at the direction of Governor Gina Raimondo.
“New clean energy technologies at lower costs offer an historic opportunity to build a modern, more equitable energy system that benefits consumers, reduces pollution and improves economic productivity,” said Daniel Sosland, president of Acadia Center. “With this settlement, Rhode Island jumps into a leadership role among the states on utility regulatory reform necessary to position it for further progress in coming years. Acadia Center is thrilled that Rhode Island is moving to embrace this future and remains committed to ensuring that the state and its residents see significant benefits from these reforms.”
Acadia Center participated in every phase of the Power Sector Transformation process in 2017 and filed testimony in both dockets covered by today’s settlement. Acadia Center has long advocated for states to embrace the types of reforms included in the settlement, through reports and materials such as UtilityVision. This includes reforms to the utility business model that place less emphasis on capital investments and more on results, improvements to the efficiency, intelligence and flexibility of the electric grid, and planning improvements to efficiently use local energy resources and provide customers with better incentives.
“Rhode Island is poised to be the first state in New England to implement serious reforms to the utility business model,” said Amy Boyd, senior attorney at Acadia Center. “This is a key step to incentivizing utilities to act in the public interest, instead of merely advancing their own bottom line.”
The settlement also includes new clean energy programs to facilitate increased adoption of efficient electric heating technologies, new investments in electric vehicle charging stations, and competitive procurements for advanced energy storage. It creates a pathway for critical next steps such as a study of advanced metering functionality and time-varying rates and further utility business model reforms.
“Electrification of heating and transportation are crucial pieces of a long-term greenhouse gas reduction strategy. New programs and investments should help push Rhode Island forward in the coming years.” said Mark LeBel, staff attorney at Acadia Center. “In addition, Acadia Center looks forward to next steps and further reforms in Rhode Island. Providing Rhode Island ratepayers with more efficient electricity rates that reflect the costs of electricity usage and help lower peak demand will be key to a smarter electricity system and integrating electric vehicles and heating.”
“Acadia Center would like to thank the Division of Public Utilities and Carriers, National Grid, the Office of Energy Resources and other intervenors for all of the hard work and collaboration that went into this settlement,” said Erika Niedowski, policy advocate in Acadia Center’s Providence office. “Collaboration and an open exchange of ideas is crucial to developing policy solutions that meet the needs of a wide range of stakeholders. Establishing the Power Sector Transformation Advisory Group provides a new forum to continue this dialogue on key issues in the coming years.”
Erika Niedowski, Policy Advocate, Rhode Island Office
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Krysia Wazny, Communications Director
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Public Scrutiny Needed for Eversource Northern Pass Project
BOSTON—Acadia Center is calling for a public review and full transparency following yesterday’s announcement that Northern Pass Transmission’s hydro-only bid, a partnership between Eversource and Hydro Quebec, was selected as the sole winner of the Massachusetts Clean Energy RFP.
The RFP, called for by a 2016 energy law, sought clean energy for about 17% of Massachusetts’ annual electricity needs. Although more than 40 bids were submitted in the summer of 2017—including several with a blend of on-shore wind and hydroelectricity, the Department of Energy Resources (DOER) and a group of Massachusetts utilities, which included Eversource, chose one controversial project, owned in large part by a subsidiary of Eversource. As the winning bid, Eversource and Hydro-Quebec will begin the process of negotiating long-term, multi-billion-dollar contracts with Eversource, National Grid and Unitil, the other distribution companies.
“Acadia Center is disappointed but not surprised that the process has resulted in the recommendation of the Northern Pass project,” said Daniel Sosland, president of Acadia Center. “Acadia Center has long asserted that clean energy bids should include the region’s wind resources and not only hydropower imports and has further been concerned that having utilities review bids in which they have a financial interest creates a clear conflict of interest that undermines public confidence in the process.”
Acadia Center supported the 2016 energy law and the Commonwealth’s pursuing a large-scale procurement of clean energy, particularly arguing for environmental protections, a preference for a blend of new renewables and hydro, and guaranteed winter energy delivery to control price spikes, all of which the statute and RFP specified. One provision that Acadia Center argued against—but was still allowed in the 2016 energy law—was allowing the utilities to bid for the contract and serve on the selection committee.
“Under the terms of the RFP, the selected project was to provide the greatest benefit with limited risk to Massachusetts ratepayers. We don’t know the relative benefit-cost ratios because the price terms are confidential, but choosing only one project from an existing importer of electricity has major risks,” said Amy Boyd, Senior Attorney at Acadia Center. “Hydro-Quebec has previously curtailed power to New England in winter months, when demand in Quebec is highest. Similarly, reliance on a single project has its own risks. Northern Pass Transmission faces serious opposition due to its land use impacts and its projected in-service date has been delayed previously.”
After the contract is negotiated it will be reviewed by the Department of Public Utilities (DPU), and the review must include a report from an independent evaluator and the participation of the Attorney General’s office. Under the statute, Eversource is also eligible for an additional incentive of up to 2.75% of the contract price for its share of the energy, as one of the contracting distribution companies. The public must be privy to any evaluation of the fairness of this and other aspects of the contract.
“Acadia Center believes that a full public report from the statutorily required independent evaluator and scrutiny by the Attorney General are important next steps. The public needs to have full confidence that this was a fair process and the benefits of other bidders were evaluated reasonably. The current ongoing procurements for offshore wind and future procurements are even more crucial to progress towards a clean energy future,” said Mark LeBel, Staff Attorney for Acadia Center. “If this contract is approved, the DPU should deny Eversource an additional incentive as a distribution company. Ratepayers don’t need to give Eversource additional money as a backstop for a contract where they are also on the other side.”
Amy Boyd, Senior Attorney
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Mark LeBel, Staff Attorney
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Krysia Wazny, Communications Director
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