McKee proposing $1B in energy savings, climate advocates pushing back.

• Governor Dan McKee proposes delaying Rhode Island’s 100% renewable energy goal from 2033 to 2050 to lower energy costs.
• The administration estimates the plan will save the average residential customer about $180 annually.
• Environmental advocates argue the delay will hinder the state’s ability to meet its climate goals.
• The governor’s office cites federal opposition to clean energy projects as a reason for the proposed change.

Gov. Dan McKee is proposing to push back state-mandated requirements to increase supplies of renewable energy in order to fulfill his promise of cutting energy costs in Rhode Island by $1 billion over five years.

The governor’s plan to amend the state Renewable Energy Standard, which was unveiled Jan. 15 in his budget proposal for the next fiscal year, would delay the deadline for the state to offset all the electricity it uses with wind, solar and other green sources from the current 2033 to 2050.

The move would bring the most aggressive state program in the nation to invest in renewables in line with goals set by Massachusetts, Connecticut and other states.

Why is McKee trying to push back the state’s climate goals?

The administration says the amendment is necessary because of President Donald Trump’s crackdown on clean energy, which has included two attempts so far, both overturned in federal court, to halt construction of an offshore wind farm contracted to deliver power to Rhode Island. The federal government’s actions are restricting supplies of renewables, making it more difficult to meet state mandates, the McKee administration says.

“Rhode Island ratepayers should not pay the price for Trump’s chaos in Washington,” Chris Kearns, acting commissioner of the Rhode Island Office of Energy Resources, said at a budget briefing for the media.

Climate advocates push back on the idea

Environmental advocates, who’d gotten word about the plan before the budget release, pushed back on the proposal, saying that the state must work fast to increase its supplies of power from renewable sources if it’s to meet the requirements of the Act on Climate, the state’s signature law for reducing planet-warming greenhouse gas emissions.

Providence City Council member Sue Anderbois, a candidate for lieutenant governor, said that volatility in prices of natural gas, the primary fuel for power generation in New England, and spending on pipeline infrastructure are the real drivers of energy rate increases in the region.

“We could tackle affordability in energy rates by holding the utility companies accountable for their out-of-control infrastructure spending, or we could misplace the blame elsewhere and continue to watch costs for working families skyrocket,” she said.

McKee estimates electric savings of $180 a year for the average ratepayer

The administration estimates that amending the renewable standard will save Rhode Islanders nearly $69 million next year and $597 million over five years. The rest of the $1 billion in energy savings would include:

• $35 million a year from changes to net metering laws that would restrict payments that primarily benefit large ground-mounted solar fields
• $21 million a year by capping funding for energy efficiency programs that pay for incentives to insulate homes and upgrade appliances
• $16 million a year from spreading out the costs of road paving associated with utility projects
• $2.5 million a year through the issuance of energy efficiency bonds
• $2.5 million a year by eliminating incentive payments to Rhode Island Energy for signing long-term renewable energy contracts

“This will make the average residential customer about $180 better off every year over the next five years,” Linda George, administrator of the state Division of Public Utilities and Carriers, said at the budget briefing.

Renewable energy law was approved in 2022

Former Gov. Gina Raimondo first put forward the idea of revamping the state’s 2004 Renewable Energy Standard in 2020, signing an executive order calling for all electric usage to be offset by renewable supplies by 2030.

A bill codifying the change didn’t pass the General Assembly the following year, but the Act on Climate, which requires big cuts in greenhouse gas emissions by 2050, did win approval and was signed by McKee, who succeeded Raimondo in office.

When the renewable standard legislation came up again for consideration in 2022, sponsored in the Senate by its president at the time, the late Dominick Ruggerio, it sailed through on the premise that the Act on Climate’s mandates could only be achieved by greening electric supplies.

During a signing ceremony for the law held at a North Providence solar project, McKee said the measure would be a boon to the economy.

“We have momentum on clean energy,” the governor said then. “There is an opportunity ahead of us like we’ve never seen before.”

But electric rates surged to record highs that winter on the back of a spike in natural gas prices and they’ve remained inflated since. Rhode Island’s rates are currently the fourth highest in the country.

Law sets deadline of 2033 for 100% renewables

The standard sets a deadline for offsetting 100% of usage by 2033, instead of the original 2030, and calls for getting there gradually each year. The timeline is the shortest by any state for a complete adoption of renewable electric supplies.

Although the law requires electric providers to increase their purchases of renewable energy, the measure hasn’t meant the end of fossil fuel-fired power plants in Rhode Island. That’s because the law accounts for renewable energy supplies through renewable energy certificates, market-based instruments that represent the environmental benefits of renewables.

Developers generate certificates as they produce renewable energy. They then sell the certificates to supplement their revenues. It’s money that helps more solar arrays and wind farms get built. As they come online, they help displace dirtier sources of power.

The certificates are sold separately from actual energy production, so electric providers may buy certificates from projects built anywhere in New England. The certificates are seen as equivalent to renewable energy, but they don’t represent actual usage. Instead, they offset that use. As it stands under the current version of the law, in 2026, utilities are required to buy enough certificates to offset 41% of supplies.

Under McKee’s proposal, the requirement would be rolled back to 35% next year and would then go up slowly from there.

“States across the region will similarly need to rethink their strategies to meet decarbonization goals while maintaining affordable electricity,” Columbia University climate economist Noah Kaufman said in a statement included in the governor’s news release on the budget proposal.

Costs of renewable standard have increased

While the price of certificates fluctuates in response to market demand, the total cost of paying for them has generally increased as the law has required more to be purchased.

According to the most recent report on the program, estimated payments increased from less than $10 million in 2018 to $60 million in 2023. They were projected to have gone up to about $90 million today and, according to the McKee administration, could quadruple by the time the state reaches 100% of supplies if the deadline were to remain at 2033.

The bill impact for a typical Rhode Island Energy ratepayer has doubled in the past five years to $7.31 a month, according to the report. That’s compared to a total monthly electric bill of $163.29.

Twenty-eight states and the District of Columbia have renewable portfolio standards, according to the Database of State Incentives for Renewables and Efficiency. Apart from Rhode Island, all the states with 100% renewables targets have set deadlines of 2040, 2045 or 2050.

When asked about meeting Act on Climate goals, Kearns said the McKee administration is committed to complying with the law, but he said the federal government’s opposition to clean energy is “creating a lot of challenges.”

But state Sen. Dawn Euer, a lead sponsor of the Act on Climate, said the state shouldn’t add to the uncertainty facing renewable energy developers by changing the standard.

“Pulling the rug out now would create unnecessary disruption and uncertainty, and the harm to ratepayers would far outweigh any claimed benefits,” the Newport Democrat said.