After months of hearings and negotiations, an energy initiative called grid modernization is moving forward in Rhode Island, along with new gas and electricity rates.
On Aug. 24 the state Public Utilities Commission (PUC) approved a new model for compensating National Grid for operating and maintaining utility poles, transmission lines, and substations. For the next three years a portion of National Grid’s revenue will also go to making the power grid more cost-efficient and accommodating to renewable power, electric vehicles, and energy storage.
States are increasingly focused on efforts to transform the power sector, but regulators need to strike a delicate balance to ensure that customers are not over-burdened by costly grid modernization investments.
The agreement puts Rhode Island “into a leadership role among New England states seeking to reform utility regulations,” according to a statement from Daniel Sosland, president of the Acadia Center.
The final settlement represents a win for low-income customer advocates, most of whom will see a significant rate reduction. The current discount for income-eligible customers will be doubled to 25% of the total bill, with another 5% for customers who qualify through income restrictive federal assistance programs.
The settlement, approved unanimously by the Rhode Island Public Utilities Commission in an open meeting, gives the state’s dominant utility about one-third of its original $214.8 million request made last November and less than two-thirds of a revised request of $137.5 million that factored in changes to federal taxes by the Trump administration.
The version of the settlement amended by the commission is also about $4.5 million lower than the initial iteration that was filed in June and resulted from negotiations between the Rhode Island Division of Public Utilities and Carriers, National Grid, the state Office of Energy Resources and other stakeholders, such as nonprofit groups the George Wiley Center and Acadia Center.
Read the full article from the Providence Journal here.
“The settlement includes several changes to the utility business model, which should begin to change the incentives for National Grid — away from traditional capital investments and towards outcomes that benefit consumers and the environment,” Mark LeBel, staff attorney for the Boston-based Acadia Center, wrote in comments to the PUC.
Read the full article from the Providence Journal here.
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.”