State regulators on Thursday gave long-awaited approval for a long-term plan to expand Liquefied natural gas storage on the Portsmouth–Middletown route.

But it’s not the carte blanche Rhode Island Energy wanted. Instead of a permanent LNG storage and equipment facility, the Rhode Island Energy Facility Siting Board granted the company a five-year license to expand its storage capacity and equipment at its existing Old Mill Lane site. The 3-0 vote also came with a number of conditions, in addition to ongoing review of a proposed ban on new gas connections on Aquidneck Island and noise pollution for local residents.

Rhode Island Energy’s predecessor, National Grid, revived the site in 2019 after an emergency power supply that left about 7,000 customers on Aquidneck Island without heat during a frigid week in January. Since then, state regulators a temporary exemption from Winter (until March 31) to accommodate LNG equipment in case of emergency.

In search of a more permanent solution, National Grid also valid in 2021 for a permanent license to expand the facility to store and vaporize liquefied natural gas. The Rhode Island Energy Facility Siting Board, which has final decision-making authority on proposals to create or substantially alter state energy facilities, including this one, has spent the past three years reviewing the proposal in internal meetings and public hearings.

The $33.5 million project, more than double the original cost estimate, would allow the state’s main gas supplier to store 70,000 gallons of LNG on-site – enough to supply the island with gas for 37 hours straight, or up to six hours a day for three days when capacity constraints are taken into account, the license application says. Plans for the permanent facility also call for moving equipment away from the road and erecting fencing and sound barriers to minimize impacts on local residents.

The gap between peak demand for gas and existing supply is widely known, as is the vulnerability of a system that relies on a single 6-inch pipe connecting the main gas pipeline to the island. But critics, including the Portsmouth And Middletown City councillors and Environmental groupspushed for more environmentally friendly and less disruptive alternatives.

The Office of the Attorney General of Rhode Island also expressed concern about the expansion of natural gas production as part of the state’s ongoing decarbonization efforts required by the 2021 Climate Act.

CEO Ron Gerwatowski acknowledged the obvious contradiction.

“It “It makes no sense to spend money to eliminate (demand) while allowing gas demand on the island to increase,” he said during Thursday’s meeting. “That would be like pumping water out of a swimming pool while running the hose at the same time.”

Alternative proposals included the energy company offering to purchase at least 13 homes in the immediate vicinity of the site due to noise complaints and forcing the company to stop accepting any new gas customers on the island.

The Energy Facility Siting Board did not issue a final opinion on those proposals on Wednesday, instead focusing on whether and for how long a license should be granted. An initial term of five years, taking into account the planned two-year build-out phase, allows time for initial operational data as well as potential progress in developing cheaper and more readily available alternatives for clean heat, panel members agreed.

As part of the permit, Rhode Island Energy must also submit a plan to the regulatory agency, the Public Utilities Commission, outlining an island-specific energy efficiency plan to reduce reliance on natural gas. The first report must be submitted no later than June 1, 2025.

Gerwatowski stressed that, given the vulnerability of the existing gas pipeline, energy efficiency is needed above all else; emission savings, while an important but secondary consideration, he said.

“This is primarily a reliability issue,” he said.

He also pointed out that structural and lifestyle energy efficiency measures take time, especially in rental properties, which require communication with tenants and a landlord who may live elsewhere.

As part of the approval, additional reports on the construction progress and operation of the temporary evaporation facility during the winter months must also be submitted.

As for questions about noise and a moratorium on new gas connections, regulators are leaving those decisions open for further review and input. Specifically, they plan to ask the Middletown, Portsmouth and Newport city councils for input on how prohibiting Rhode Island Energy from adding new gas customers on the island might affect development and residents. Noise complaints may also be better addressed once new data is available showing the noise impacts of the expanded plant, which Rhode Island Energy says will be less disruptive than the existing site due to the relocation of equipment and new sound barriers.

In a memo dated June 5 Steven Boyajian, an attorney representing Rhode Island Energy, told state regulators that the company would cooperate and provide regular inspections or reports of its operations, including noise studies, once the new equipment and $500,000 sound barrier are installed. But Boyajian objected to the proposal to ban new gas connections, citing regulators’ lack of legal authority to impose a moratorium and the additional costs to Aquidneck Island customers who would be forced to pay for alternative, more expensive heating sources such as electric heat pumps.

“A moratorium is effectively a tax on the greenhouse gas emissions of Aquidneck Island residents in the form of higher heating bills that would not be imposed elsewhere in the state,” Boyajian wrote. “This is nonsensical given the obvious fact that there is no difference between greenhouse gas emissions on Aquidneck Island and emissions in the rest of the state as far as the Climate Act or other state policies are concerned.”

Rhode Island Energy did not immediately respond to requests for comment Thursday.

The Conservation Law Foundation, which attended hearings on the proposal, praised state regulators for “making the best decision in a difficult situation.”

“Aquidneck Island families and businesses should not be left out in the cold again,” attorney James Crowley said in a statement. “And they should not have to rely on dirty, polluting fossil fuels like gas that accelerate climate change and harm our communities. The sooner we transition to clean energy sources and eliminate the need for such LNG plants, the better equipped we will be to protect our environment and the Rhode Island we know and love for future generations.”

The existing temporary facility will open for the 2024–25 winter season while construction for the expanded operation is underway.