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PROVIDENCE — The state's dominant electricity distributor would be forced to buy power from renewable energy producers under a deal struck Wednesday that could remove a major financial obstacle to building a windfarm off Rhode Island.
The compromise legislation ends a years-long deadlock between Republican Gov. Don Carcieri and Democratic lawmakers. Similar versions of the bill were approved Wednesday night by House and Senate committees, setting the stage for a floor vote later this month.
The bills try to solve a problem in Rhode Island blamed for stalling renewable energy projects: no major customer has agreed to buy the electricity over the long-term. Without a guarantee from a major customer, renewable energy developers feared getting financing for their projects would be difficult.
Now, lawmakers want to require National Grid, the state's dominant electricity supplier, to buy electricity from wind turbines, solar projects and other renewable sources for at least 10 years or longer. The contracts would be subject to approval by the state Public Utilities Commission.
National Grid supports the proposal, said Ron Gerwatowksi, the firm's deputy general counsel.
Since National Grid would be forced to buy the renewable electricity, it would be permitted to collect a payment from its customers equal to around 3 percent of the value of the renewable energy contracts it signs. House and Senate lawmakers have proposed slightly different reimbursement rates.
Between 15 to 25 percent of Rhode Island electricity would come from renewable sources if the plan is fully implemented, Gerwatowksi said.
If approved, the bills would end a long-running fight between the governor and lawmakers over how to fund renewable energy in Rhode Island.
Last year, Carcieri vetoed a bill because he said it would increase costs for customers. At the time, he said the bonus payment to National Grid was too generous and faulted the legislation for not requiring that developers build renewable energy projects in Rhode Island.
The latest version satisfies Carcieri's concerns, said his spokeswoman, Amy Kempe.
"We are pleased with the compromise," she said. "It's a much different bill."
The legislation will be particularly helpful to Deepwater Wind LLC, which has been selected by the state to build a massive windfarm about 15 miles off the coast of Rhode Island. It has not yet received the permits necessary to build the project.
An earlier plan did not force National Grid to buy all the electricity Deepwater Wind hoped to produce with its proposed windfarms, said Jim Lanard, the company's managing director.
But the latest version would force National Grid to buy power from a small windfarm that Deepwater Wind wants to build off the tourist enclave of Block Island by 2011. The island now burns expensive diesel fuel to generate electricity.
State utility regulators could also require National Grid to buy electricity from a much larger wind farm that Deepwater Wind hopes to construct about two years later much farther from the coast.
