RI Legislature Adopts Comprehensive Energy Reforms, June '06 Press

For Immediate Release:  Friday, June 23, 2006    
Contact:  Sam Krasnow, Policy Advocate & Attorney
Ph: 401-439-0041, skrasnow@env-ne.org

R.I. Legislature Adopts Comprehensive Energy Reforms

State Establishes New Era of Energy Planning to Reduce Consumer Costs,  Promote Energy Efficiency and Improve Air Quality
 

Providence, June 22-- Rising energy costs have focused policy makers’ attention sharply on promoting ways to reduce consumer costs and invest in energy efficiency resources. Efficiency investments lower consumer costs, keeps our dollars at home, and reduces emissions of air pollutants and greenhouse gases.  Rhode Island’s energy package does this by establishing a new regulatory approach for energy planning and purchasing called “Least-Cost Procurement.”

 “Rhode Island’s new era of energy planning will look at all available options in meeting customer needs,” noted Dan Sosland, Executive Director of Environment Northeast. “The Least-Cost Procurement approach requires that all cost-effective efficiency, distributed generation, demand response, and renewable energy are utilized before more expensive energy sources.  The Rhode Island energy package represents the most significant change in state energy law since electric restructuring.”

Under the old system, distribution companies purchased power from oil, coal, natural gas, and nuclear generators, and passed on the costs.  Other often lower cost alternatives such as efficiency, distributed generation, and demand response were limited.  Today, the new Least-Cost Procurement regulatory model requires distribution utilities to consider all available energy resources, including efficiency, and purchase the most cost-effective and stable sources. This is an approach with impacts beyond Rhode Island’s borders.

 “When efficiency is allowed to compete on a dollar-for-dollar basis with supply, it will win and the result is dramatically lower energy costs for Rhode Island,” said Sam Krasnow, Policy Advocate and Attorney with Environment Northeast.   “Directing power companies to purchase all cost-effective efficiency, DG, and renewable energy will drive customer costs down in Rhode Island and be a power hedge against fast rising oil and natural gas prices” noted Krasnow. 

Least-Cost Procurement will increase RI’s energy independence and benefit the state economy. “Rhode Island sends over $1 billion out of the region each year for energy consumption, but this legislation helps stop the bleeding,” said Krasnow. As a result of Least-Cost Procurement “energy dollars will go toward local efficiency programs, resources, and jobs before being spent on expensive foreign or out-of-state supply.”

A new a consumer, business, and environmental ratepayer council is established to watchdog the Least-Cost Procurement mandate and ensure all cost-effective resources are purchased and the savings are passed onto RI ratepayers.  “This legislation embraces energy efficiency as the best way to make energy more affordable, and it strengthens the hand of ratepayers to have a larger voice in how energy decisions are made in Rhode Island,” said Matt Auten, Advocate with the Rhode Island Public Interest Research Group (RIPIRG). “This is the type of pro-consumer legislation Rhode Island needs to respond to our current energy crisis.”

A dedicated state Office of Energy Resources is established to be responsible for energy planning and forecasting, increasing energy efficiency and renewables, and engaging in the “least cost procurement” process.

The package also establishes an important and robust natural gas efficiency program. In recognition of the need to address energy needs in addition to electricity, the legislation will also create a new natural gas conservation program to help natural gas customers make their homes and businesses more efficient, reduce natural gas consumption and save all Rhode Islanders money on their energy bills. As Krasnow points out, “Comparable programs in other New England states are saving about four dollars for every one dollar invested.”  For every year that the program is running, $20 million in lifetime savings will be realized for Rhode Island consumers.

The RI legislation is part of an important regional trend, where rising fossil fuel prices and generation costs have  turned policy makers’ attention toward capturing efficiency —a local and lower cost energy resource that will provide significant consumer and environmental benefits:

Maine recently adopted a law that allows energy efficiency investments to help meet power needs of utility customers for the standard offer. The provision is included in LD 2041, which Governor Baldacci signed into law in June. 

ISO-NE is currently in the process of promoting energy efficiency in regional energy markets.  For the first time, ISO-NE has agreed to allow energy efficiency and other demand-side resources to qualify on an equal basis with generating units for capacity incentive payments. This is a significant step toward incorporating efficiency in the region’s energy supply.

By removing barriers to energy efficiency and other demand side resources in the region’s energy markets, new efficiency investments will allow New England states to meet additional load growth with energy efficiency – and take a major step towards reducing GHG emissions, lowering energy bills, creating jobs, and increasing gross state product.

The Rhode Island legislation is supported by the POWER coalition, A Coalition Committed To Protecting Our Workers, Economy & Resources, whose members represent business, consumer, and environmental interests including:   Environment Northeast, a non-profit research and advocacy organization that addresses large-scale environmental problems that threaten ecosystems, human health or the management of regionally significant natural resources;  RIPIRG , a non-profit, non-partisan public interest advocacy organization that represents 3,000 active citizen members and is dedicated to protecting Rhode Island’s environment and encouraging a fair, sustainable economy; People’s Power & Light, a non-profit energy company that serves 3,000 consumers and is dedicated to energy that is affordable, safe, and clean for our families and the environment; and TEC-RI, a membership organization consisting of the largest users of energy in Rhode Island. These universities, manufacturers, hospitals, and other major employers provide well-paying jobs for over 60,000 Rhode Islanders.