Rhode Island Climate and Energy

Rhode Island is implementing sweeping energy reforms, including a mandate to purchase all cost-effective efficiency and demand-side resources that are less expensive than traditional supply. A new stakeholder council is working with state officials and the local utility to implement these reforms to increase investments in efficiency and other clean, cost-effective resources so the state can reduce GHG emissions and keep energy costs low for consumers.

Background

State officials concerned about Rhode Island’s energy security invited ENE to share policy ideas and data analysis, and then later to help draft an energy planning and procurement policy for...
[Read full background]

Energy Efficiency as a Resource

Rhode Island’s Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006includes a precedent-setting reform mandating that the local utility invest in all electric efficiency resources that are cheaper than supply.

The 2006 Energy Act created the Energy Efficiency Resources Management Council (EERMC), which represents a wide range of consumer and stakeholders interests and is charged with assessing availability of demand-side resources and planning for long-term efficiency procurement. ENE is the environmental appointee to the EERMC. Activities include:

Developing a 3-year electric efficiency plan with the local electric utility, National Grid. The RI Public Utilities Commission (PUC) approved the plan in April of 2009 to ramp-up spending on efficiency, increasing annual electric efficiency investments from $14 million in 2008 to more than $43 million in 2011 for all customer sectors (residential, low-income, commercial, and industrial). This level of investment would place RI in the top five states nationally, reduce GHG emissions, and generate more $100 million in net savings for customers across the state.
Developing an Opportunity Report identifying opportunities for the local electric utility to invest in low-cost efficiency and system reliability resources.

The RI Energy Efficiency and Resource Management Council released its Annual Report to the General Assembly for April 2010-April 2011, the Council’s fourth year of operation.

The Annual Report contains a summary of the acivities of the Council over the past year including its role in:

Implementation of Least Cost Procurement
Implementation of System Reliability Procurement
Identifying opportunities for energy efficiency
Advising the OER on the implementation of the Regional Greenhouse Gas Initiative

Decoupling

The Rhode Island General assembly passed a law decoupling utility profits from sales, which clears the way for National Grid to make deep investments in energy efficiency. ENE advocated this as a key step to advancing programs and measures that will saving Rhode Island customers hundreds of millions of dollars in lower energy bills. Summary of 2010 RI Decoupling Act.

System Reliability

The 2006 Energy Act set a national precedent by promoting underutilized energy efficiency, distributed generation, and demand response resources to improve system reliability by reducing the strain on the electricity grid (instead of upgrading or building additional infrastructure).

ENE is working with the EERMC, the utility and others to develop a plan that takes into consideration sustainable alternatives, results in lower customer costs, and secures local sources of energy supply. Specifically, ENE is working to develop a plan to avoid costly new distribution upgrades on Aquidneck and Conanicut Islands.

Natural Gas and Heating Oil

RI’s natural gas efficiency fund, a $6-million-per-year program, is one of the largest in the region per capita. ENE is working to help further expand the fund and integrate it with other efficiency programs.
Roughly 46 percent of Rhode Island homes heat with natural gas and in those homes the existing energy efficiency programs have succeeded in reducing homeowner’s heating requirements by as much as 20 to 30 percent with a benefit to cost ratio of 4:1.

ENE proposes a similar efficiency program for the 42 percent of Rhode Island homeowners heating with oil, kerosene, or propane. ENE is working with oil dealers, policy makers, and other consumer advocates to propose legislation that would establish a home heating oil efficiency program and a sustainable funding mechanism.

Federal and Regional Efficiency Funds

Rhode Island is well-positioned to use new federal funding streams made available for existing or expanding state efficiency programs. RI can serve as a model for policies to be adopted nationwide. ENE is working in RI to help guide effective investment of (SEP) efficiency funds made available through the American Reinvestment and Recovery Act, with an emphasis on expanding efficiency programs to include underinvested sectors such as heating oil and whole-building improvements. (See Federal Energy Reform for more on efficiency allocations in the Recovery Act.)

RI is also dedicating at least 60% (about $4 million to date) of auction proceeds from RGGI, the regional cap and trade program, to efficiency programs. ENE is working to ensure that this funding stream is maintained and used effectively.

Renewables and Transmission

Rhode Island has off-shore wind sites that are good potential new clean energy sources, but they are generally located away from load centers. New transmission and careful planning will be necessary to develop these resources and move the energy to consumers. ENE advocates a transparent process that selects politically viable projects that minimize costs and effectively deliver new in-region, low-carbon energy supply.

Climate

Rhode Island is one of the founding members of the nation’s first mandatory greenhouse gas cap and trade system, the Regional Greenhouse Gas Initiative (RGGI). Through the auction of RGGI allowances, the program has raised millions of dollars for Rhode Island clean energy investments, the majority of which is designated for energy efficiency program expansion, with the remainder primarily to other clean energy programs.