PROVIDENCE — Gov. Dan McKee has vetoed a bill pushed by a single renewable-energy developer — and big political contributor — that could have shifted millions of dollars in the costs of solar and wind projects from developers to ratepayers.
Approved in the final days of this year’s General Assembly session, the legislation was introduced at the urging of Cranston-based Green Development, headed by Mark DePasquale.
In his first veto message since becoming governor, McKee said: “This bill will have the effect of shifting millions of dollars of costs from developers of renewable energy who sell their power to National Grid ratepayers.
“Ratepayers already pay for the renewable energy purchased by National Grid from these projects and, as written, this bill would increase those costs with no oversight by any regulatory agency.”
The bill would circumvent efforts currently underway at the state Public Utilities Commission to settle the concerns around interconnection, which has proven to be a source of contention between developers and National Grid, which owns all the electric wires and poles in Rhode Island.
Green Development says it is raising issues that affect all renewable energy developers, but no other developers came out in support of the legislation and neither did their industry group, the Northeast Clean Energy Council. Only three lobbyists submitted written testimony on the bill in the House.
The two representing DePasquale’s company urged lawmakers to pass the measure, arguing that costs, delays and confusion surrounding interconnection were getting in the way of the state’s policy goal of ramping up renewable energy.
The third, representing National Grid, warned the House Corporations Committee that, if passed, the bill could cost ratepayers. PUC chairman Ronald Gerwatowski, in a June 14 memo sent to legal counsel for House Speaker K. Joseph Shekarchi and then to McKee’s office, reached a similar conclusion.
The legislation was sponsored in the House by freshman Rep. Edward Cardillo, D-Johnston, and in the Senate by Sen. Frank Ciccone, D-Providence.
DePasquale and other political contributors who list Green Development as their employer have given nearly $71,000 to Rhode Island office-holders and candidates since 2015. That includes $3,000 to McKee this year and $6,800 to Senate President Dominick Ruggerio in recent years.
DePasquale listed an earlier name of his company, Wind Energy Development, as his employer when giving another $20,150.
Asked Tuesday why the Senate passed the legislation, Ruggerio said; “I think it helps attract developers, obviously … We looked at that bill and we looked at it very closely. And we just felt it was the right thing to do.”
Since installing a single wind turbine in North Kingstown in 2012, Green Development has grown into one of Rhode Island’s largest renewable energy developers, with two dozen wind turbines installed or planned and the largest solar project in Rhode Island under construction.
All told, the company has 75 megawatts of renewable energy in operation, another 87 megawatts in construction and about 120 megawatts in the pipeline over the next three or four years, according to Hannah Morini, the company’s director of business development.
Although its projects are helping to reduce energy costs for municipalities and other public entities and have won contracts through the state, they have not been universally welcomed. Residents near its turbines, including in Coventry and Portsmouth, have complained of shadow flicker and noise. The company has been involved in court fights with town officials in Coventry and Exeter.
And it has found itself in the midst of more than one Smith Hill controversy.
The company made another request of lawmakers five years ago to have electric customers pay a chunk of the costs of connecting renewable energy projects to the power grid, but that effort was shelved after a Providence Journal story.
During the next year’s session of the General Assembly, the company sought legislation that would have extended a key incentive to biomass — the burning of wood waste for power — to benefit a project in the works in Johnston, but the measure was dropped in the face of opposition from environmental groups.
Green Development has long complained about the role National Grid plays as gatekeeper of connections to the regional power grid.
The company alleges that the utility assesses unfair costs, particularly in regard to transmission lines, the high-voltage wires that carry electricity over long distances generally from power plants and other very large sources of generation.
Green Development builds what are known as distributed-generation projects, which are smaller than utility-scale plants such as the natural gas-burning Manchester Street Station in Providence.
According to Morini, Green Development has spent $40 million on connecting its projects to the electric system. While interconnection studies by National Grid once took 90 days to complete, the transmission-level issues have now added 18 months to project timelines.
In testimony to the Corporations Committee, Morini said National Grid often unfairly levies costs for improvements to the transmission system, without authority from federal regulators, even though renewable energy projects like her company’s primarily use the distribution lines in local areas.
One project the company is developing was assessed a $500,000 annual maintenance fee for the transmission system, she said. For another project, according to Morini, the interconnection costs went up from $400,000 to $1 million without explanation.
“The utility company being in charge of interconnecting renewable energy projects is kind of like the fox guarding the henhouse,” she said. “Renewable energy is not in the company’s best interest for their bottom line.”
She said the legislation was necessary because the PUC has so far failed to resolve the situation.
The bill would require a detailed breakdown of fees before construction and an audit afterward. In regard to transmission costs, Morini said the bill doesn’t rule them out entirely.
“It doesn’t say you can’t charge them to us. It says you need proper authority from [the Federal Energy Regulatory Commission],” she said in an interview. “With the authority comes oversight. Right now there’s no oversight. There’s no predictability. There’s no transparency.”
But in his memo, Gerwatowski said that the phrasing of the bill could leave electric ratepayers on the hook for millions of dollars in transmission costs.
“If the result of this law is that project developers do not have any cost responsibility for transmission upgrades, they will have no price signals to care about the locations they choose and no financial incentive to find more optimal sites,” he wrote.
He said the PUC will open a docket to resolve the issue once and for all this month and issue a decision by next July.
The bill comes as renewables continue to come on line in Rhode Island. National Grid connected only about one megawatt of solar power in 2011. The number for 2020 was 70 megawatts, bringing the total for the last decade to 374 megawatts. But there are still 775 megawatts in line for interconnection approval.
When asked why other developers didn’t back the legislation, Green Development spokesman Bill Fischer said they feared National Grid.
“Other developers are not of our scale and have real concerns about impacts to their projects,” he said. “They’re worried about negative outcomes of testifying against National Grid at the State House.”