Despite disturbing new revelations and renewed public criticism about insider legislative grants, cronyism appears to be alive and well at the Rhode Island State House. And once again, Ocean State families and businesses would be asked to foot the bill.
In the budget that got voted out of the Finance Committee early Wednesday morning, alert observers spotted and brought to the attention of the RI Center for Freedom and Prosperity as well as the Ocean State Current on Friday an extensive revision to Article 18.
They are correct to loudly ring warning bells about it. If it stays in, state electric ratepayers are in for even higher electric rates than they currently pay.
Article 18 would shift certain costs of connecting a renewable energy project (wind turbine or solar power array, for example) into the electric grid from the developer to the ratepayer by overruling findings and a decision by the PUC. Remember when that happened, as it never should have, with Deepwater Wind?
Now, we potentially have a Deepwater Wind redux in the making with these last minute revisions to budget Article 18. This attempt to move the costs of connecting renewable energy projects to the grid would be a significant and unprecedented shift, as National Grid noted yesterday in the kick-butt ProJo article by Kathy Gregg and Alex Kuffner.
“Approval of this measure would make Rhode Island the only state in the nation where developers would be subsidized by ratepayers for construction of the link between their for-profit generation facilities and the electric transmission or distribution system,” the company said in a statement.
In other words, if the revisions to Article 18 or any stand-alone bill containing this language pass into law, the RI General Assembly would be forcing rate hikes on to Rhode Island ratepayers via exactly the WRONG kind of national ground-breaking policy. Worse, if you go to the bottom of Article 18, you will see that ratepayers would be picking up interconnection costs RETROACTIVELY back to January 1, 2015, potentially creating an instant, multi-million dollar invoice for ratepayers right out of the box. (Note to the developer and certain interested legislators: was this section deliberately included as a throw-away so you could say, oh, okay, we’ll compromise and take this section out but the rest stays? Forget it, we’re not falling for it. The whole thing has to go.)
One of the big problems here is that a renewable energy generating project, wherever it might be – like in an isolated corner of the state where the land is cheaper to purchase or rent – often requires an expensive upgrade to the grid infrastructure; miles of lines, for example, that would never have been needed/warranted by the existing (low) electric load. So, effectively, the renewable energy project would force ratepayers to fund otherwise unneeded upgrades to the grid.
So why is this in the works? Who stands to benefit? Good question. The answer is a company called Wind Energy Development (WED).
In January, the PUC sent a letter to the House Corporations Committee recommending against House Bill H7006. In it, the PUC referenced both the best interest of all ratepayers and a dispute between National Grid and “Wind Energy Development”. (Go here to see the lengthy PUC docket pertaining to WED.)
never went anywhere passed the House but got held up in the Senate. But identical language in it has popped up again as the last minute additions/revisions to Budget Article 18. So, clearly, the revisions to Article 18 were made specifically with Wind Energy Development in mind.
Further, its principle, Mark DePasquale, has stated that it is the mission of WED to become the “lead developer of wind energy for Rhode Island”.
But you’re not going to get far in the wind “industry” without government mandates, involuntary ratepayer subsidies and even, if you can swing it, a significant shifting of costs. WED’s lobbying and campaign contribution activity on Smith Hill further confirm that they have been seeking to implement some sort of significant policy. A search on the RI Secretary of State’s lobbyist page shows that WED has steadily ramped up its employment of and spending on legislative lobbyists from one lobbyist (firm) in 2011 to three lobbyists in the current legislative session. Additionally, Mark DePasquale, principle of WED, and other DePasquales, have maxed out their campaign contributions to Gina Raimondo, Nicholas Mattiello, and John DeSimone from 2014 to 2016.
As of May, 2015, WED had a dozen renewable energy projects either underway or planned. If the company could fob the interconnection costs of some or all of those projects onto National Grid ratepayers, it would be a significant financial boon to them. The revisions to Article 18 would accomplish this for WED, to the detriment of all ratepayers.
In other words, we are witnessing in real time how a large government program with purported good intentions can quickly morph into a scheme to enrich a connected insider at the expense of everyone else.
The RI Center for Freedom and Prosperity (disclosure: I am their Communications Director) has just released a report showing that the high costs of increasing Rhode Island’s renewable energy sources, as state officials are moving to do, are a horrible value BY THE STANDARD SET BY THE EPA. For this reason, the Center
… strongly recommends that lawmakers reject all proposed new energy mandates in 2016 and, instead, repeal those that are currently written into law.
Asked about the implications of Article 18, the Center’s CEO Mike Stenhouse commented, “The revisions to Article 18 would add a huge, wholly inappropriate element of cronyism to what our report demonstrates is already a very low-impact, inefficient policy direction. Wind Energy Development has become the poster child for how big government projects – renewable energy, affordable housing – too often end up profiting insiders rather than benefiting the public. This revelation is perfectly timed to underscore our call for all renewable energy mandates to be rolled back.”
Speaker Mattiello said in yesterday’s ProJo that there will be amendments to this article. Excellent, as long as by “amendment”, he means removal of all of the new language that would needlessly increase everyone’s electric bills. Rhode Island ratepayers are very much looking to him to bring a wiser, cooler head to this matter.