2010.05.21-Providence Business News-House passes decoupling for NGrid Press

http://www.pbn.com/stories/49996.html

House passes ‘decoupling’ for N. Grid

Published online May 21, 2010

By Chris Barrett
PBN Staff Writer

PROVIDENCE – Some of the state’s largest energy users are grumbling about, but amenable to, legislation passed by the R.I. House of Representatives Thursday that would redefine how National Grid sets electric and gas rates.

The Energy Council of Rhode Island Executive Director John Farley said the legislation eliminated some of the council’s largest concerns about the proposal known as “decoupling.” The legislation would permit National Grid to decouple the revenue the state allows it to collect from the amount of electricity it sells. Supporters of the legislation say that National Grid presently has little incentive to support energy efficiency because the more electricity it sells the more revenue it collects.

National Grid twice asked the R.I. Public Utilities Commission to approve such a plan, once for gas rates and once for electric rates. Twice the PUC denied the plan.

The energy council complained the initial proposal – as presented by National Grid to the PUC – would have increased rates for some of the state’s largest energy users such as Toray Plastics in North Kingstown and Polytop Corp. in North Smithfield. Farley said the council particularly objected to pieces of the proposal that would automatically include inflation in rate calculations and give large consideration to Grid’s long-term capital plan.

The legislation passed by the House Thursday – the Senate had passed it previously – does not include inflation automatically in setting rates. And it slims back the capital plan.

Farley said that while the council was disappointed, the legislation appeared better than the initial plan. And because the legislation leaves some of the details to the PUC, Farley said the council is optimistic its interests will be protected.

Meanwhile environmentalists hailed the legislation. Environment Northeast released a statement Friday morning saying that the legislation would allow National Grid to invest in energy efficiency and save Rhode Island customers money.

“With decoupled rates, utilities like National Grid can focus on saving customers money through efficiency without negatively affecting the company’s financial health,” Policy Analyst Abigail Anthony said in a news release. “ENE applauds the leadership of the General Assembly for recognizing decoupling as an essential tool for bringing cost-saving efficiency to Rhode Island’s citizens.”