John Farley, Executive Director The Energy Council of Rhode Island April 2, 2008

1. The Role of Energy in the Rhode Island Economy: Blessing or Curse?University of Rhode IslandEnergy Lecture Series John Farley, Executive Director The Energy Council of Rhode Island April 2, 2008

2. Total state spendingdivided by2. Number of private sector jobs

3. State spending per private sector job (2006) • MA = $11,981. • RI = $14,712.

4. In order for RI to have the same relative income tax capacity as MA, we would need to add over 98,000 new private sector jobs to our RI economy!

5. Who is TEC-RI?

6. The Energy Council of RI • Over 60,000 RI jobs • Manufacturers • Colleges & Universities • Hospitals • Major businesses • Working to lower the cost of energy for RI businesses and institutions

7. #10. If you want to use solar energy, it really helps to live in a place that gets a lot of sun.

9. # 9. RI is not a leader in wind energy, and it will be difficult to overcome our disadvantages with this resource.

11. We have some modest potential for wind in Rhode Island, and almost all of it is offshore.

14. # 8. “Renewable power in RI” and “comforting words about electricity prices” should not be allowed to sit together in the same sentence.

15. Relative cost of electricity supply resources for RI • Solar electricity: 20-30 cents per kWh • Large scale offshore wind: 9-14 cents • Grid price in New England: 6-7 cents • Energy efficiency: 3-5 cents per kWh.

16. # 7. Industry’s share of RI energy consumption is much less than most people think it is.

17. Industry uses 15.6% of the electricity consumed in RI. • Across all fuels, industry uses only 11.6% of the BTUs in the state.

18. #6. If you want to reduce carbon emissions from electricity generation, take economic activity away from China and give it to the United States.

19. www.carma.orgA massive database containing information on the carbon emissions of over 50,000 power plants world wide

20. Tons per MWh • US power plants: 1,404 tons • Chinese power plants: 2,230 tons (that’s 59% more)

21. If you want to lower greenhouse gas emissions by , say, 59% or so, BUY AMERICAN!(rather than Chinese)

22. #5. It’s not true that high worldwide fuel prices completely explain why electricity prices are so high in RI. There’s more to it than that.

23. 2006 EIA state average retail electricity rates, $ per MWh. • Kentucky: $ 49.60 • Rhode Island: $117.50

25. # 4. We pay some of the highest prices in the USA for natural gas and electricity. RI industrial customers pay the 4th highest prices of any state in the USA for each fuel.

26. # 3. Energy, in and of itself, is good, not bad. Electricity is particularly good.

27. Electricity use correlates positively with: • Lower infant mortality rates • Better literacy • Longer life expectancy • Economic growth

28. # 2. We are #5 in electricity efficiency program spending per capita.

30. #1. When it comes to energy use per capita, little Rhody is at the head of the class.

31. Energy consumption per Capita, 2005 (EIA) • #1 (that’s bad) Alaska: 1,193.9 MMBTU • #26 (median) Georgia: 348.4 MMBTU • #51 (that’s good) RI: 213.3 MMBTU

32. The Role of Energy in the Rhode Island Economy: Blessing or Curse?

33. CURSE!!(right?)

34. Heating oil rises to all-time high10:09 AM EST on Tuesday, November 6, 2007By Timothy C. BarmannJournal Staff Writer

35. Power grid operator to consumers: Please conserveAugust 1, 2006The company that operates New England's power grid has asked consumers to cut back on electricity usage as the hot weather pushes demand for power closeto record levels.

36. Where does the world turn to when it wants a well-designed automobile that gets fantastic gas mileage?

37. What drove Japan to excel at fuel efficient automobiles?

38. Perhaps it was because Japan had almost no oil reserves of their own!

39. Unit energy consumption per GDP (Japan = 1.0), year 2000 • USA = 1.65 • UK = 1.33 • France = 1.10 • Germany = 1.17

40. Japan has practically no energy resources. Out of necessity, they built their industries around highly energy efficient approaches.

41. When it comes to the auto industry, was Japan’s oil situation a curse – or a blessing?

42. The Role of Energy in the Rhode Island Economy: Blessing or Curse?

43. The key to economic development is to be the best at providing things that other people (states, nations) will pay a premium for.

44. Folks in places like China, India, Japan and Europe will pay a premium for know-how that shows them how to extract more value for each BTU they consume.

45. If electricity prices are twice as high in RI, and electricity is a key factor in your business, how do you stay in RI and compete with Virginia?

46. Substitute other things for electricity • Be twice as efficient in how you use electricity. • Move to Virginia.

47. What good things can happen when you are a high energy cost state?

48. If we figure out how to deliver 2X energy efficiency, who else wants that?

49. Can we become the “how to make this stuff work in the real world” capital?

50. Some blessings • 50x20 miles • One combined gas & electric utility • Excellent universities • Highly urban, highly wired • NYC and Boston close by • Home of the world champion Red Sox, Patriots (and hopefully soon - Celtics!)