2019-01-10 / Around Town

Remote Net Metering Plan Presented

By Andy Long

A plan was presented to the City Council on Jan. 3 for Newport and Middletown to partner in a 20-year contract with NRG Energy of San Francisco to receive “fixed net-metering credits,” which would reduce electric bills in both communities.

Several other municipalities in Rhode Island, including Providence, have executed such agreements. The Middletown Town Council approved the contract with NRG last September.

Net metering involves installing a renewable energy producing device, usually solar electricity generating panels, on a property. When excess power is generated into the power grid, the property owner is compensated by the utility company.

Remote net metering occurs when renewable energy is produced other than on the owner’s property. Under current Rhode Island law, only municipalities, affordable housing developments, hospitals and nonprofits can enter into these agreements.

Under the agreement, NRG would develop a solar farm in Warwick to create the kilowatts per hour requested by the two communities. Newport is contracting for nearly seven million kilowatts per hour annually. The city uses about 13 million kilowatts per hour yearly in its public buildings.

“It’s just being conservative. It’s a long contract. Who knows what the technology will be,” city manager Joseph J. Nicholson Jr. said. “We could do a higher allocation in the future.”

The city would continue drawing electricity from National Grid and it would not be dependent on the solar panels for its supply.

However, Newport would receive credits from National Grid at rates set by the state’s Public Utility System for each kilowatt hour that goes from the Warwick facility into the power grid. Currently, the state obligates National Grid to credit customers about 15.4 cents for each kilowatt hour generated for the power grid. Newport will pay NRG 10 cents for each kilowatt per hour of credit it receives from National Grid, an amount fixed for the entire term of the contract.

Julian Dash, managing partner of Clean Economy Development, LLC, of Providence, a consulting firm hired by the city, estimates that the city would save nearly $400,000 on its electric costs in the first year.

He said the savings should increase over the life of the contract due to the rising cost of energy, as the reimbursement rate would rise from its current rate. Dash said it is reasonable to assume an annualized 1.2 percent rise in the value of the credits over 20 years, with the total projected savings to Newport totaling nearly $15 million.

If Rhode Island ends remote net metering or reimbursement rates change, provisions of the contract protect the city from financial loss.

When asked by Mayor Jamie Bova why NRG was recommended over six other firms that submitted bids, Nicholson said that NRG offered the best financial deal.

Conceivably, Newport could build its own solar power facility, but council member Justin Mc- Laughlin said, “We don’t have $9.4 million [a rough estimate of construction costs].”

Bova agreed. “It’s a fairly complex project,” she said. “That’s a large investment and the net metering is a large benefit to the city.”

The presentation of the proposed deal was conducted by the council as a workshop session, so no vote was taken.

In other matters, the Newport School District asked the council to transfer $240,060 to fund a contract with Studio JAED, a planning, design, and engineering firm, for assistance in planning for the new high school and an early learning center.

Newport will soon begin the two-stage process for applying to the state for financial help in constructing the high school and finding an early learning center.

In the first stage, the district must provide a demographic trends study report on the condition of current facilities needs and intent to seek reimbursement.

In the second stage, the district will present its proposal for the new high school and early learning center.

Studio JAED will work with the district through these two phases in all elements of planning, working with the public for comments and ideas, and in presenting the proposals to the state.

The council approved the expenditure, 6-0. Kate Leonard was absent.

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