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Net Metering

Two years ago, in an effort to promote wind energy, the legislature changed the law on ``net metering'' - a practice that allows the owners of wind turbines to sell any power they don't use back to National Grid.  It seemed to make sense in the drive to encourage development of renewable energy sources. But, as Jim Hummel finds, the change in law opened up a loophole that is now the subject of an investigation by the Public Utilities Commission.


The concept is pretty straightforward. Put up a windmill like this one at New England Tech and provide electric power for your own use. Anything left over would go back to National Grid, and credited to your account.

It's called `net metering' and seemed to make sense in the drive to promote renewable energy sources. But two years ago the legislature tweaked the law and inadvertently opened up a huge loophole.

Erhardt: ``People are gaming the system, using it for something that it never was otherwise intended for.''

North Kingstown Representative Larry Erhardt sits on a special House committee to study alternative energy. He's also watched as a developer in his own town has proposed putting up a 427-foot wind  turbine - with most of the power sold back to National Grid at an inflated rate provided for by the  amended law.

Erhardt: ``There was no suggestion whatsoever that people would go out and build a large power plant and a 1.8 megawatt turbine - 427 feet high is a large power plant.''

This turbine, built  by the town of Portsmouth, has become the center of a debate -  and an investigation by the Public Utilities Commission - about net metering. Although it is built next to the high school, none of the power it generates goes directly there. Instead 100 percent is sold to National Grid at the retail rate,  rather than wholesale rate - about one and half times higher.

Riggs: ``My knee-jerk reaction was wind power is a great idea. It's clean, it'll help reduce our dependence on fossil fuels and when I started finding out that wasn't the case, I said: `Wait a minute, people aren't being straight about this.''

Ben Riggs is a semi-retired manufacturing executive who lives in Newport. Last fall he wrote the PUC questioning Portsmouth's arrangement with National Grid, which did not require PUC approval. He raised enough issues that the commission has launched a full investigation with hearings expected in the next couple of weeks.

Riggs: ``This was not something to supply the town of Portsmouth. This was an industrial-sized wholesale generation system to compete with normal gas, hydroelectric and other power sources.''

Hummel: ``So, in effect, a mini-power plant.''

Riggs: ``A mini-power plant that because of public subsidies is going to cost the public three to four times as much as normal power would. They're not really interested in the high school or the town. They're interested in making money to support the town's budget. So they portray this as saving $250,000 a year. Actually what they're doing is getting $500,000 a year from other taxpayers and ratepayers throughout the state of Rhode Island - half of that is going to pay because they have an expensive system - and the other half is going into their pocket. Why should I be paying Portsmouth's budget, when we've got a Newport budget to pay?''

Simply put, Riggs says that without heavy public subsidies - tax breaks or purchase of the power at higher rates - the turbines would not work economically.

Riggs: ``There are 13,000 wind turbines in California and they don't produce as much electricity as a medium-sized power plant. So you can cover the whole country with windmills and it's not going to make that much difference.''

He says everyone who uses electricity is helping subsidize the revenue going to the town of Portsmouth.

Only since the legislature altered the net metering law in 2009 have developers begun pitching turbine projects in half a dozen communities across the state, including the most high-profile project just off Route 2 in North Kingstown, which has drawn swift and fierce opposition from some of the people who live there.

Erhardt: ``When you're debating these things on the (House) floor you can't see a fact it's a very large amount of electricity. Being intangible people don't appreciate size of the thing. When the amendments were passed two years ago to expand the size of the facility that could fall under the net metering law, there was absolutely no suggestion whatsoever, given - either  in the environment and natural  resources committee where I sit, or on the floor of  the House that this kind  of a facility - that would be primarily to sell its power rather than for use on premises by the property owner - that was never even hinted at in the process.''

The PUC's decision to take a closer look at Riggs' complaint, and the likelihood that the laws might be tweaked again, has already put the skids on some proposed wind turbine projects.

Hummel: ``If you criticize green energy then you're seen as not in favor of green energy.''

Erhardt: ``That's a very serious problem, unfortunately. There are zealots on both ends of the spectrum on this and people become extremely emotional about it, I'm sorry to say, one of my great points is that - I do not disagree at all, we have to do things about carbon emission - but that doesn't necessarily mean that you have to have a power plant right here in the community. If the economics were artificially contrived in the first place, it's not necessarily a bad thing tailoring that so it's a more rationale set of economics.''

Ben Riggs is more blunt in his assessment.

Riggs: ``The only thing green about this is the money.''

Jim Hummel, for the Hummel Report.