CARCIERI OUTLINES NEW PLANS TO EXPAND SUPPLIES OF RENEWABLE ENERGY IN RI

09-08-2006

Governor Announces Financing For Hydroelectric Turbine At Harris Mill dam in Coventry; Increases State’s Renewable Energy Goal to 20% by 2011

Governor Donald L. Carcieri today laid out a new plan to use hydro power that will bolster Rhode Island’s renewable energy supply and increase the overall amount of renewable energy that is produced in the state.

Standing in front of the Harris Mill dam along the Pawtuxet River in Coventry, Governor Carcieri announced that a modern, energy-efficient turbine and power plant, partially financed by the state, will be installed in the dam and produce more than 10 million kilowatt-hours of electricity when fully operational. The new turbine is part of the redevelopment of the Harris Mill complex, which will be converted into apartments and condominiums.

Today’s announcement was one of several hydroelectric power projects and studies announced by Governor Carcieri that are taking place in Rhode Island. With these new projects and the development of wind power projects, Governor Carcieri said the state could increase its renewable energy to 20% by 2011 from the 15% by 2016 that he first announced in January. The Governor also called for increasing the state’s renewable energy standard from the 16% that it must achieve by 2019 to 20% by 2014.

“We are once again harnessing the power of our rivers,” Governor Carcieri said. “We are taking the concept that Samuel Slater first introduced along the Blackstone River in Pawtucket to begin the Industrial Revolution and putting a high-tech spin on it.”

The announcement by Governor Carcieri is part of his ongoing efforts to address Rhode Island’s energy problems. “When I announced my five-point energy agenda in January to increase our state’s access to affordable sources of energy and reduce energy costs, one of my

major goals was to find progressive, environmentally-friendly ways to supplement our traditional energy sources,” Governor Carcieri said. “After all, our state may not have natural reserves of oil or natural gas, but we are the Ocean State. I charged our new Chief Energy Advisor with facilitating ways that our small state could increase our reliance on renewable energy such as wind power and hydropower.”

“I am pleased that we have made so much progress on these goals so quickly,” the Governor continued. “In addition to the turbine and cogeneration plant that will be installed here, a turbine will soon be installed at the Royal Mills complex just down the river from here. And we are also exploring the feasibility of using additional rivers as well as the power that comes from tidal flows and waves to generate energy as well.”

Governor Carcieri said the state is continuing to move forward with its study to site wind projects across the state. He said a study of potential sites should be completed by the end of the year. “This project is innovative and it’s attracting national attention,” he said

With these projects, Governor Carcieri said that the state should increase its renewable energy standard – the percentage of energy used in Rhode Island that is derived from renewable sources such as wind and water. “Bringing these hydro power projects on line will enable us to exceed our renewable energy standard goal and go a long way towards keeping energy affordable and plentiful for Rhode Islanders.”

Hydro power projects Replacing the old hydroelectric equipment with a new turbine and a hydroelectric and cogeneration power plant at the Harris Mill dam will produce more than 10 million kilowatt hours of electricity per year. Steam produced for heating will pass through a turbine that will generate additional electricity. As an added benefit, the steam will be produced by using bio-fuel, which is produced from the cooking grease waste that can cause problems in wastewater treatment plants.

The $1.5 million project is financed equally from a $500,000 low-interest loan from the Office of Energy Resources’ Renewable Energy Fund, private equity, and a bank loan. The project will generate return income to the Renewable Energy Fund and, as the money is repaid, it will allow other projects to tap into this resource. This fund will also receive an additional two-cents-per-kilowatt-hour from the sale of renewable energy certificates that are created by the project. The Pawtuxet River Authority will also receive two-cents-per-kilowatt-hour paid from renewable energy certificates.

In addition to the Harris Mill dam, several speakers addressed additional projects in conjunction with the Office of Energy Resources:

• The Office of Energy Resources provided partial funding for a feasibility study for a hydroelectric turbine at the Royal Mills complex in Coventry. That turbine is on order.
• The Department of Environmental Management and the Office of Energy Resources is working to identify additional dams that are capable of power production. Priority funding would be given to dams that are in need of repair. Financing would come from assistance from the Economic Development Corporation and repaid from electricity revenues and renewable energy credit sales. These projects could generate an additional 10 megawatts of new renewable power generation.
• The Office of Energy Resources provided a grant to the developer of the American Tourister Mill renovation project to perform a feasibility study for the installation of river turbines to capture the energy in the tidal flow of the Palmer River.
• Rhode Island is one of two worldwide test sites for a project undertaken by an Australian company that is commercializing wave energy technology. The pilot project will be located just south of the Point Judith breakwater.

Governor Carcieri’s Energy Agenda

Governor Carcieri’s energy agenda is designed to significantly increase access to energy resources, while lowering energy costs, increasing energy conservation and ensuring an energy safety net for low-income Rhode Islanders. The Governor’s energy strategy includes five points: 1. Increase Use of Renewable Energy: Governor Carcieri strongly believes that Rhode Island must seek progressive, environmentally-friendly ways to supplement its traditional energy sources. The Governor’s original energy agenda established a goal of generating 15 percent of Rhode Island’s electricity through wind power. The state expects to complete a list of feasible sites for wind turbines in Rhode Island by the end of the year. Today, the Governor increased the state’s renewable energy goal to 20 percent by using both wind and hydroelectric power.

2. Increase Natural Gas Supplies: The Governor plans to increase Rhode Island’s supplies (and thereby lower the cost) of natural gas by supporting the regional siting of Liquified Natural Gas (LNG) terminals that can feed the Rhode Island market. While the Governor opposes siting LNG terminals along Narragansett Bay, a number of LNG facilities are already under construction in Eastern Canada. Once online, these facilities will expand Rhode Island’s natural gas supplies, while avoiding the dangers posed by efforts to site LNG terminals in densely populated or environmentally-sensitive areas in Rhode Island or Massachusetts.

Last year’s mild winter, together with the relatively mild summer, assured that natural gas fired electrical generation did not consume the gas in the storage caverns. While natural gas supply is holding well, as evidenced by the Henry Hub price, which is 33% less than at this time last year, we must complete the task of securing part of Canada’s abundant supply. Governor Carcieri, through his leadership position as the Co-Chair of the New England Governors and Eastern Canadian Premiers Conference, forged an agreement that New England and Canada must identify the means for New England to obtain Canada’s natural gas. On September 15, Rhode Island officials will attend a meeting of the NICE committee to set the agenda for a ministerial meeting in February, at which Canadian-American gas supply will be discussed.

3. Reform Electric Energy Market: In testimony before the Rhode Island Public Utility Commission and in communications to the Federal Energy Regulatory Commission (FERC), Governor Carcieri has pointed out that the current pricing mechanism for electricity is driving energy prices above reasonable rates for Rhode Island consumers. The Governor proposes to work with the FERC to reform the electricity market to ensure that Rhode Islanders do not pay inflated prices for electricity. Rhode Island officials are working with members of the generation community to formulate an alternative to the present market structure.

4. Assist Low-Income Rhode Islanders: Low-income Rhode Islanders have been particularly hard-hit by rising energy costs. In October 2005, Governor Carcieri called on the General Assembly to return to the State House to approve a proposal to create a state program to help low-income Rhode Islanders pay their energy bills. This program would help supplement assistance from the federal Low Income Home Energy Assistance Program (LIHEAP).

Legislation signed into law this past session creates an energy affordability fund, without adding new taxes. This fund will be used to subsidize low-income rates, to weatherize low income homes, and for other worthwhile purposes.

5. Conserving Energy in State Government: Governor Carcieri also believes we must promote energy conservation throughout Rhode Island. Rhode Island state government is a significant consumer of electricity and natural gas. Rhode Island is reducing the amount of energy state government consumes through the installation of energy efficient lighting and state-of-the-art heating and air conditioning systems.

State government is leading by example in this effort. To facilitate individuals’ ability to follow suit, the Office of Energy Resources is sponsoring an energy efficiency expo on October 1 at the Crown Plaza, where Rhode Islanders can view various energy saving products, and listen to seminars on various energy saving techniques.

Taken together, these five reforms should significantly decrease energy prices for Rhode Island families and employers, while helping Rhode Island become a better environmental steward through more thoughtful energy consumption and increased use of renewable energy.