National Grid is proposing new renewable fees on solar and wind energy systems.
As power generation is making the switch to distributed renewable energy systems, the transition is causing energy providers, such as National Grid, re-consider where they generate revenue. Credits that are earned from having a wind or solar system eliminate most charges on monthly electrical bills. To offset the costs of maintaining a working electric grid, National Grid states that imposing a renewable fee is necessary.
National Grid, the primary energy supplier for the state of Rhode Island, states that they do not plan to acquire revenue from the imposed renewable fees, but rather introduce a fair allocation of cost. There are two main renewable fees being suggested. The first will increase the customer charge on all electric bills. The price increase will differ for residential and commercial customers. Customers owning renewable energy systems, mainly photovoltaic solar panels, will be required to pay the transmission charge found on their monthly utility bill as well. The second fee offered applies to larger renewable energy system arrays. The renewable fee would be accessed according to the amount of electricity the system is capable of producing. This renewable fee applies to all existing and future projects.
Opposition to this fee is supported by the argument that the proposed fee will hinder Rhode Island’s renewable energy sector growth and the fact that distributed generation reduces costs to the utility. Wind or solar arrays provide additional, non-monetized benefits. They reduce air pollution, and offer alternatives to combat the nation’s depleting fossil fuel resources.
Newport Solar and its customers will be directly affected by this change in legislation. We oppose two key aspects of National Grid’s proposal.
The fees should not be applied to existing renewable energy systems. Our solar array customers made a decision to install their systems based on the fees that were present at the time. Changing these fees will noticeably change the economics of their investment.
In addition, our organization is opposed to any fees that will inhibit the growth of the renewable energy industry. The Renewable Energy Growth legislation was enacted to encourage growth and disrupt our non-renewable based energy economy. Any fees that slow this growth are bad for Rhode Island residents, our economy, and our environment.
In order to create a modern electric grid, utilities, renewable or not, must reconcile costs to build a successful sustainable economy. National Grid’s presently proposed renewable fee, however, is not the appropriate approach. An appropriate approach might include quantifying the benefits of distributed generation installations for their demand support. In addition, the economic, environmental, health, and social value should be monetized. Incentivizing renewables production holistically for these benefits or charging non-renewable production for their environmental, health, or social harm would form a system that linked real costs to those that are incurring them.