Over a dozen parties, including Acadia Center, have intervened in a proceeding currently before the Rhode Island Public Utility Commission (Docket No. 4568). The issue at hand is a new electric rate structure proposed by National Grid.
Under legislation passed in 2014, National Grid was required to identify potential rate reforms in light of the increasing amount of distributed generation, like solar photovoltaics (PV), that will be connected to the grid. The scope of National Grid’s proposal was limited by the legislation to only one component of our electricity bills – distribution rates – and the utility could not propose reforms that would require additional expenditure, like advanced metering. Unfortunately, these restrictions have narrowed the conversation and we are now discussing incremental change that may in fact be regressive.
Rhode Island is emerging as a leader in grid modernization efforts. It has a good foundation of existing policies and processes, which the Systems Integration Rhode Island (SIRI) working group mapped out in a recently released report. National Grid’s DemandLink pilot in Tiverton and Little Compton and the RI Office of Energy Resources’ Solarize program are great examples of using new technology, energy efficiency, and distributed resources to avoid more costly investments in traditional infrastructure.
Now how do we capitalize on the learning to date and make the electric grid and energy system as a whole more dynamic, clean, and responsive to consumers? How do we more accurately value and compensate distributed generation for the benefits they provide while ensuring that they pay for the services they get from the grid? That is the conversation we should be having, but instead we are butting heads over a tiered customer charge for residential and small commercial and industrial customers and an access fee for standalone generators (National Grid’s rate reform proposal is summarized here).
Acadia Center’s concerns and arguments against the proposal are laid out in Dr. Abigail Anthony’s testimony on the tiered customer charge and access fee and her rebuttal testimony filed last week. The gist is that:
- National Grid is only considering the costs of distributed generation. The benefits should also be included.
- The tiered customer charge is confusing and customers will not be given enough information or technological tools to understand and manage their electricity consumption.
- High customer charges and low variable charges reduce the value of energy efficiency, conservation, and renewable energy investments.
- It is hard to see how the proposed rate design will help reduce the overall costs of the energy system.
- The renewable energy access fee is not based on thorough analysis of costs and benefits.
Acadia Center has recommended that the Commission reject National Grid’s proposal. There needs to be a better understanding of the costs and benefits of distributed generation, and how those customers should be compensated. Evaluating the potential costs and benefits of new metering technology will also help in developing long-term rate design that actually advances the state’s energy vision.
Hearings in this proceeding get underway on January 19, 2016.
Leslie Malone is a Senior Analyst, Climate & Energy and Canada Project Director working from Acadia Center’s Providence office. She works on distributed and large-scale renewable energy and transmission policy as well as energy efficiency and carbon pricing issues in the U.S. and Canada.