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Rhode Island

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Select Economic and Energy Data Value State Rank
Real Gross Domestic Product, per capita $36,283 24th highest
Unemployment 12.7% 3rd highest
Gasoline Price, per gallon $2.81 23rd highest
Electricity Price, per kWh 14.24¢ 8th highest

Like most of the states in the Northeast, Rhode Island’s electricity prices are among the most expensive in the country. It is one of just two states in the country without coal-generated electricity. Instead, Rhode Island’s electricity is primarily generated from natural gas. Natural gas represents a greater proportion of electricity generation in Rhode Island than in any other state, accounting for over 97 percent of the state’s electricity.

Because Rhode Island has no fossil fuel resources, its natural gas is imported from production areas in the Gulf Coast and natural gas storage sites in the Appalachian Basin. Though Rhode Island is considered to have wind energy potential from offshore, wind does not contribute to the state’s electricity supply. Just over 2 percent of Rhode Island’s electricity is generated from renewables, including hydroelectric power, municipal solid waste, and landfill gas.

Regulatory Impediments to Affordable Energy

Although affordable energy is a vital component of a healthy economy, regulations frequently increase energy costs. Regulations imposed in the name of reducing carbon dioxide and greenhouse gas emissions are especially costly. Carbon dioxide is a natural byproduct of the combustion of all carbon-containing fuels, such as natural gas, petroleum, coal, wood, and other organic materials. Today, there is no cost-effective way to capture the carbon dioxide output of the combustion of these fuels, so any regulations that limit carbon dioxide emissions will either limit the use of natural gas, petroleum, and coal, or dramatically increase their prices.

Below are some facts about Rhode Island’s regulatory environment that are likely to affect the cost of energy or the cost of using energy. Rhode Island has enacted several policies that increase the cost of energy. Electricity prices in Rhode Island are among the highest in the country, owing in part to some of its regulations.

  • Rhode Island does not cap greenhouse gas emissions. However, as a member of the Regional Greenhouse Gas Initiative, it has imposed a cap on greenhouse gas emissions from power plants.
  • Rhode Island is a member of the Regional Greenhouse Initiative (RGGI), a regional agreement among ten Northeast states to limit greenhouse gas emissions. This agreement requires states to cap carbon dioxide emissions from the electrical generation sector and to reduce those emissions by 10 percent by 2018 through a cap-and-trade scheme.
  • Rhode Island requires utilities to generate from renewable sources a certain percentage of the electricity that they sell. The state’s renewable portfolio standard requires utilities to generate 16 percent of their retail electricity sales from renewables by the end of 2019.[i]
  • Rhode Island requires the use of reformulated motor gasoline blended with ethanol.[ii] Rhode Island has also agreed to cooperate with other Northeastern states to develop a regional low-carbon fuel standard.
  • Rhode Island does impose automobile fuel economy standards similar to California’s, which include attempts to regulate greenhouse gas emissions from new vehicles. Rhode Island’s Low Emissions Vehicle Program was implemented through Air Pollution Control Regulation Number 37 in 2005, adopting California’s vehicle emissions standards.[iii]
  • Rhode Island requires new residential and commercial buildings to meet energy efficiency standards. Residential and commercial buildings must meet the 2006 International Energy Conservation Code (IECC). Commercial buildings must also meet ASHRAE-90.1-2004.[iv] The IECC (developed by the International Code Council) and ASHRAE 90.1 (developed by the American Society of Heating and Refrigeration and Air Conditioning Engineers) are model codes that mandate certain energy efficiency standards. House Bill 5986, enacted in 2009, requires the state’s standards to be updated to incorporate the 2009 IECC and ASHRAE 90.1-2007 before final approval by the legislature’s Legislative Oversight Committee.[v] Governor Donald Carcieri issued Executive Order 05-14 in 2005, requiring new state construction and renovations to meet the silver LEED standard.[vi] The silver LEED standard is one level of the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) rating system.
  • Rhode Island imposes state-based appliance efficiency standards. These standards apply to high-intensity discharge lamp ballasts, automatic commercial icemakers, metal halide lamp fixtures, residential boilers and furnaces, incandescent spot lights (reflector lamps), bottled water dispensers, commercial hot food holding cabinets, and walk-in and reach-in refrigerators and freezers.[vii]
  • Rhode Island does not allow utilities to “decouple” revenue from the sale of electricity and natural gas. Some states decouple revenue from actual sales, allowing utilities to increase their revenue by selling less electricity and natural gas.

Data Sources: Real GDP per capita 2008: Bureau of Economic Analysis, News Release: GDP by State (June 2, 2009), http://www.bea.gov/newsreleases/regional/gdp_ state/gsp_newsrelease.htm; Unemployment: Bureau of Labor Statistics, Regional and State Employment and Unemployment–February 2010 (Mar. 10, 2010); Gasoline Prices: American Automobile Association, AAA Daily Fuel Gauge Report (Mar. 30, 2010); Electricity Prices: Energy Information Administration, Electric Power Monthly, Table 5.6.B., Average Retail Price of Electricity,  (March 15, 2010), http://www.eia.doe.gov/cneaf/electricity/epm/table5_6_b.html; Electricity Generation Data: Energy Information Administration, Electricity Generation 2009, http://www.eia.doe.gov/cneaf/electricity/epa/generation_state_mon.xls.

[i] Lawrence Berkeley National Laboratory, Renewables Portfolio Standards in the United States,

http://eetd.lbl.gov/ea/ems/reports/lbnl-154e.pdf

[ii] Energy Information Administration, Rhode Island, Apr. 8, 2010, http://tonto.eia.doe.gov/state/state_energy_profiles.cfm?sid=RI.

[iii] Rhode Island Department of Environmental Management – Office of Air Resources, Rhode Island’s Low Emissions Vehicle Program, http://www.dem.ri.gov/pubs/regs/regs/air/air37_07.pdf.

[iv] Building Codes Assistance Project, Code Status: Rhode Island, http://bcap-energy.org/node/92.

[v] H.B. 5986 (R.I. 2009), http://www.rilin.state.ri.us/BillText/BillText09/HouseText09/H5986.pdf.

[vi] R.I. Exec. Order 05-14 (Aug. 22, 2005), http://www.governor.ri.gov/documents/executiveorders/2005/14_NewBuildings_Energy_Environmental_Standards.pdf.

[vii] Database of State Incentives for Renewables and Efficiency, Rhode Island Appliance and Equipment Efficiency Standards, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=RI10R&re=0&ee=1.

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