New Rhode Island law resolves state renewable energy disputes

On Friday, Rhode Island Governor Donald Carcieri signed into law a bill that will require National Grid to enter into long term contracts for renewable energy.  Rhode Island is the latest New England state to supplement its renewable portfolio standard with a long term contract requirement. The law also includes rules tailored to bring Deepwater Wind's proposed offshore wind farm closer to fruition.

The law requires National Grid, the state's distribution company, to solicit and enter into ten to fifteen year energy contracts for 90 MW of new renewable generation located in Rhode Island, of which at least three MW must be solar photovoltaic.  The company has four years to enter into these contracts, which are subject to approval by the state Public Utility Commission. The law also lays out the procedure for a separate Commission proceeding to require National Grid to enter into long term contracts for energy from a "utility scale offshore wind farm" of up to 150 MW.  In both cases, National Grid received authority to charge an additional 2.75% bonus from ratepayers on sale of the electricity from the renewable sources.

The law resolves two thorny issues involving the state, National Grid, and renewable energy development in Rhode Island. The first involves National Grid's electricity supply.  In March, the PUC rejected National Grid's 2010 electricty supply plan for lacking any long term contracts for renewable energy sources, a ruling the utility appealed to the Supreme Court.  Both sides blinked: the PUC backed off its requirement, and National Grid withdrew its appeal.  The new law appears to resolve the dispute, though some PUC commissioners have expressed displeasure, particularly with the incentive rate.  The second involves a proposed offshore wind farm that could bring the state as many as 800 new jobs. Last September, Rhode Island selected Deepwater Wind to build a 150 MW, $1.5 billion wind farm off the coast of Rhode Island.  The developers had been unable to find a buyer to commit to purchasing power from the massive project, which made the project impossible to finance.  By guaranteeing a purchaser for the power, the new law enables the developers to move forward with the permitting process. 

On that front, this week the Department of Interior issued its first exploratory leases for offshore wind projects, the result of a compromise with FERC we've discussed previously.  Offshore wind in the US may soon be a reality.