Narragansett Rate Settlement Sets T&D (DisCo) rates for next five years Starting November 1, 2004 Parties to settlement included TEC-RI, PP&L, Attorney General, Division of PUC, US Navy, Narragansett Electric

Back-up rates generally more conducive to on-site generation Moved more charges for larger C&I (G-62 and G-32) to demand charges, away from energy charges While better for on-site generation, differences in demand charges between general service and back-up/supplemental service still penalize on-site generation, particularly non-dispatchable generation (e.g. wind)

Renewables exemption from back-up rates Any RI Renewable Energy Standard (RPS) eligible technologies Exemption only for first 3MW of renewables Name plate capacity Negotiated cap to address Narragansett’s concerns about lost revenues and other unforeseen consequences

Does not preclude additional changes to back-up rates… Settlement agrees that the design of the rates is “not based on considerations of reduced environmental impacts, increased energy efficiency, reduced transmission losses and congestion, effects on electric system reliability, and other factors that the Commission may consider under G.L. 39-2-1.4(c).” Therefore, any Party is free to file to request a discounted rate or credit pursuant to G.L. 39-2-1.4(c)

DG Working Group Purpose: “to examine the effects of distributed generation on distribution system operations and reliability, Company costs and revenues, and other factors within the purview of [Narragansett Electric].” Opportunity to increase 3MW renewables cap if no additional costs or unanticipated benefits are identified Opportunity to assess costs/benefits of DG generally, so that data is available to make informed decision regarding G.L. 39-2-1.4(c)

DG Working Group Narragansett to “collect and report to the DG Working Group data necessary for the examination of such factors as may be determined by the DG Working Group, and [to] cooperate with other DG Working Group members with respect to the collection of such data.” Working Group consists of PP&L, Narragansett’s “active participation”, and other “interested parties”.

Interconnect Issues PP&L did not attempt to address in settlement: Not clear that this has been a stumbling block for on-site generation in Rhode Island. Limited resources