|
Summary
One investor-owned utility, Narragansett Electric (a National Grid Company), administers and operates a portfolio of energy efficiency programs for its customers, which account for 99% of statewide sales of electricity. A public utility, Pascoag Utility District, operates its own programs.
Utility programs are funded by a "conservation and load adjustment factor"—a rider assessed on all customer rates established as part of Rhode Island's restructuring legislation. There is a minimum floor on this surcharge of 2 mills per kilowatt-hour for energy efficiency. The Rhode Island Public Utilities Commission annually reviews and authorizes utility demand-side management program plans, including budget amounts. Total spending on energy efficiency programs in Rhode Island was $17.9 million in 2007, which saved 64,995 MWh.
Building on its strong program history, the Rhode Island legislature unanimously passed sweeping new legislation on June 23, 2006: the Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006. This act greatly increases the role and requirements for acquisition of demand-side resources, requiring utilities to acquire all cost-effective energy efficiency. The act also establishes new requirements for strategic long-term planning and purchasing of least-cost supply and demand resources. National Grid’s procurement plan for 2009 features a ramp-up in energy efficiency programs, which it anticipates will save 1% of its total electricity sales and 0.5% of its natural gas sales (based on 2007 sales). |
| Customer Energy Efficiency Programs |
Energy efficiency programs are offered by Rhode Island's regulated distribution utilities. The major investor-owned utility operating in the state, Narragansett Electric, is a National Grid Company and offers a comprehensive slate of programs that parallel National Grid's offerings in Massachusetts. Hearings are held once a year before the Rhode Island Public Utilities Commission to review program plans. A collaborative of stakeholders reviews these plans and makes recommendations to the RI PUC on the programs. Program costs are trued up annually each May.
Energy efficiency's role in planning and meeting resource needs has been greatly increased in Rhode Island as a result of recent legislation. The Rhode Island legislature unanimously passed sweeping new legislation on June 23, 2006: the Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006. This act greatly increases the role and requirements for acquisition of demand-side resources, requiring utilities to acquire all cost-effective energy efficiency. The act also establishes new requirements for strategic long-term planning and purchasing of least-cost supply and demand resources. This act also established a new decision-making body—the "Energy Efficiency and Resources Management Council," which gives consumer and environmental interests an official role in energy planning and purchase decisions. The Council has a specific legislative mandate and funding to engage in critical energy resource decisions facing Rhode Island. The act also created a statewide natural gas conservation program. According to the Energy Information Administration, Rhode Island utilities reported efficiency program savings of 64,995 MWh in 2007, 0.95% of total retail sales.
Back to Top
Rhode Island established a public benefits funding mechanism as part of its restructuring legislation to support energy efficiency programs and renewable energy. Regulated distribution utilities' customers pay a 2 mill/kWh non-bypassable public benefits fee specifically for energy efficiency programs. Renewable energy programs are supported by a 0.3 mill/kWh fee and low-income programs are funded through utility rates. The fee to support energy efficiency is a floor; actual spending amounts have exceeded this minimum requirement. In 2006, total spending on energy efficiency programs was $17.2 million. Budget levels are expected to increase beginning in 2009 in response to the requirements established by the Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006. According to the Energy Information Administration, Rhode Island utilities spent $17.9 million on energy efficiency in 2007, 1.98% of total spending.
Back to Top
| Energy Efficiency Resource Standard |
The Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006 requires utilities to submit energy efficiency procurement plans. Utilities submitted 3-year plans for 2009–2011 in which they include energy efficiency plans containing savings targets. Each utility also submits a procurement plan for every year with detailed energy efficiency plans. National Grid, for example, plans to save 79,331 MWh of electricity and 140,683 MMBtu in 2009. This is equal to 1% of its total electrical sales and 0.5% of its natural gas sales in 2007. The plans have been approved by the state PUC but do not include any penalties for non-compliance.
Back to Top
None in place or proposed.
Back to Top
| Reward Structures for Successful Energy Efficiency Programs |
Shareholder incentives are in place, subject to annual PUC review and approval. For 2005 (Docket 3635, Order 18152), the PUC established a shareholder incentive for Narragansett Electric based on meeting specified goals. The mechanism includes two components: (1) five performance-based metrics for specific program achievements, and (2) kWh savings targets by sector. The program performance metrics are established for each program, such as achieving a certain market share or penetration for the targeted energy-efficient technology (for example, market share of ENERGY STAR® new homes). The target incentive rate for the kWh savings goal is 4.4% of the eligible spending budget. The threshold performance level for energy savings by sector is 60% of the savings goal. The company has the ability to earn an additional incentive on savings up to 125% of target savings.
Back to Top
| Energy Efficiency as a Resource |
Rhode Island has a legislative requirement enacted in 2007 for electric and gas utilities to acquire all cost-effective energy efficiency that costs less than new energy supply as the first priority resource, placing it first in a utility’s resource “loading order” and greatly increasing the role of energy efficiency in utility long-term planning. Utilities in Rhode Island filed plans that include specific energy savings goals. These plans are currently under review by the Public Utilities Commission, with approval of final plans expected later this year.
Back to Top
Last Updated
08/18/2009
Back to Top |
