2013 -- S 0735

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LC01986

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STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2013

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A N A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS - DUTIES OF PUBLIC UTILITIES

AND CARRIERS

     Introduced By: Senators Bates, Sosnowski, Miller, DiPalma, and Lombardi

     Date Introduced: March 13, 2013

     Referred To: Senate Finance

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 39-2-1.2 of the General Laws in Chapter 39-2 entitled "Duties of

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Utilities and Carriers" is hereby amended to read as follows:

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     39-2-1.2. Utility base rate -- Advertising, demand side management and renewables.

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– (a) The general assembly finds that the renewable energy development fund is a tool of the

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economic development corporation to support Rhode Island's economic development by

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stimulating job growth, attracting and retaining businesses, and promoting the development of

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new technologies and the green energy sector.

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      (a)(b) In addition to costs prohibited in section 39-1-27.4(b), no public utility distributing

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or providing heat, electricity, or water to or for the public shall include as part of its base rate any

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expenses for advertising, either direct or indirect, which promotes the use of its product or

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service, or is designed to promote the public image of the industry. No public utility may furnish

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support of any kind, direct, or indirect, to any subsidiary, group, association, or individual for

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advertising and include the expense as part of its base rate. Nothing contained in this section shall

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be deemed as prohibiting the inclusion in the base rate of expenses incurred for advertising,

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informational or educational in nature, which is designed to promote public safety conservation of

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the public utility's product or service. The public utilities commission shall promulgate such rules

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and regulations as are necessary to require public disclosure of all advertising expenses of any

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kind, direct or indirect, and to otherwise effectuate the provisions of this section.

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      (b)(c) Effective as of January 1, 2008, and for a period of ten (10) years thereafter, each

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electric distribution company shall include charges per kilowatt-hour delivered to fund demand

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side management programs and 0.3 mills per kilowatt-hour delivered to fund renewable energy

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programs. The electric distribution company shall establish and after July 1, 2007, maintain two

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(2) separate accounts, one for demand side management programs, which shall be administered

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and implemented by the distribution company, subject to the regulatory reviewing authority of the

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commission, and one for renewable energy programs, which shall be administered by the

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economic development corporation pursuant to section 42-64-13.2 and, shall be held and

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disbursed by the distribution company as directed by the economic development corporation for

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the purposes of developing, promoting and supporting renewable energy programs.

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     (d) Effective January 1, 2014, twenty percent (20%) of the charges delivered to fund

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renewable energy programs shall be allocated to the office of energy resources in administering

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this program for the purposes of developing, promoting and financing renewable energy

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programs. Administrative funds not expended in any fiscal year shall remain the administrative

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account to be used as needed in subsequent years. The office of energy resources shall have the

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ability to apply administrative funds not used in a fiscal year to achieve the purposes of this

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section. The funds deposited into the administrative funds account shall be exempt from the

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indirect cost recovery provisions of section 35-4-27. The office of energy resources shall provide

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annually to the economic development corporation a detailed accounting of this administrative

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funds account, and this accounting shall be included in the annual financial and performance

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report of the Rhode Island renewable energy development fund.

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     During the ten (10) year period the commission may, in its discretion, after notice and

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public hearing, increase the sums for demand side management and renewable resources;

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thereafter, the commission shall, after notice and public hearing, determine the appropriate charge

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for these programs. The office of energy resources and/or the administrator of the renewable

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energy programs may seek to secure for the state an equitable and reasonable portion of

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renewable energy credits or certificates created by private projects funded through those

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programs. As used in this section, "renewable energy resources" shall mean: (1) power generation

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technologies as defined in section 39-26-5, "eligible renewable energy resources", including off-

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grid and on-grid generating technologies located in Rhode Island as a priority; (2) research and

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development activities in Rhode Island pertaining to eligible renewable energy resources and to

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other renewable energy technologies for electrical generation; or (3) projects and activities

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directly related to implementing eligible renewable energy resources projects in Rhode Island.

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Technologies for converting solar energy for space heating or generating domestic hot water may

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also be funded through the renewable energy programs. Fuel cells may be considered an energy

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efficiency technology to be included in demand sided management programs. Special rates for

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low-income customers in effect as of August 7, 1996 shall be continued, and the costs of all of

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these discounts shall be included in the distribution rates charged to all other customers. Nothing

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in this section shall be construed as prohibiting an electric distribution company from offering

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any special rates or programs for low-income customers which are not in effect as of August 7,

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1996, subject to the approval by the commission.

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      (1) The renewable energy investment programs shall be administered pursuant to rules

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established by the economic development corporation. Said rules shall provide transparent criteria

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to rank qualified renewable energy projects, giving consideration to:

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      (i) the feasibility of project completion;

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      (ii) the anticipated amount of renewable energy the project will produce;

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      (iii) the potential of the project to mitigate energy costs over the life of the project; and

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      (iv) the estimated cost per kilo-watt hour (kwh) of the energy produced from the project.

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      (c)(e) [Deleted by P.L. 2012, ch. 241, section 14_.

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      (d)(f) The executive director of the economic development corporation is authorized and

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may enter into a contract with a contractor for the cost effective administration of the renewable

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energy programs funded by this section. A competitive bid and contract award for administration

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of the renewable energy programs may occur every three (3) years and shall include as a

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condition that after July 1, 2008 the account for the renewable energy programs shall be

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maintained and administered by the economic development corporation as provided for in

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subdivision (b) above.

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      (e)(g) Effective January 1, 2007, and for a period of eleven (11) years thereafter, each

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gas distribution company shall include, with the approval of the commission, a charge per deca

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therm delivered to demand side management programs, including, but not limited to, programs

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for cost-effective energy efficiency, energy conservation, combined heat and power systems, and

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weatherization services for low income households.

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      (f)(h) The gas company shall establish a separate account for demand side management

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programs, which shall be administered and implemented by the distribution company, subject to

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the regulatory reviewing authority of the commission. The commission may establish

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administrative mechanisms and procedures that are similar to those for electric demand side

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management programs administered under the jurisdiction of the commissions and that are

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designed to achieve cost-effectiveness and high life-time savings of efficiency measures

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supported by the program.

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      (g)(i) The commission may, if reasonable and feasible, except from this demand side

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management charge:

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      (i)(1) gas used for distribution generation; and

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      (ii)(2) gas used for the manufacturing processes, where the customer has established a

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self-directed program to invest in and achieve best effective energy efficiency in accordance with

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a plan approved by the commission and subject to periodic review and approval by the

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commission, which plan shall require annual reporting of the amount invested and the return on

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investments in terms of gas savings.

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      (h)(j) The commission may provide for the coordinated and/or integrated administration

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of electric and gas demand side management programs in order to enhance the effectiveness of

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the programs. Such coordinated and/or integrated administration may after March 1, 2009, upon

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the recommendation of the office of energy resources, be through one or more third-party entities

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designated by the commission pursuant to a competitive selection process.

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      (i)(k) Effective January 1, 2007, the commission shall allocate from demand-side

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management gas and electric funds authorized pursuant to this section 39-2-1.2, an amount not to

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exceed two percent (2%) of such funds on an annual basis for the retention of expert consultants,

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and reasonable administrations costs of the energy efficiency and resources management council

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associated with planning, management, and evaluation of energy efficiency programs, renewable

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energy programs, system reliability least-cost procurement, and with regulatory proceedings,

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contested cases, and other actions pertaining to the purposes, powers and duties of the council,

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which allocation may by mutual agreement, be used in coordination with the office of energy

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resources to support such activities.

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      (j)(l) Effective January 1, 2013, the commission shall annually allocate from the

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administrative funding amount allocated in (i) from the demand-side management program as

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described in subsection (i) as follows: sixty percent (60%) for the purposes identified in

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subsection (i) and forty percent (40%) annually to the office of energy resources for activities

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associated with planning management, and evaluation of energy efficiency programs, renewable

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energy programs, system reliability, least-cost procurement, and with regulatory proceedings,

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contested cases, and other actions pertaining to the purposes, powers and duties of the office of

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energy resources.

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      (k)(m) On April 15, of each year the office and the council shall submit to the governor,

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the president of the senate, and the speaker of the house of representatives, separate financial and

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performance reports regarding the demand-side management programs, including the specific

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level of funds that were contributed by the residential, municipal, and commercial and industrial

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sectors to the overall programs, the businesses, vendors, and institutions that received funding

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from demand-side management gas and electric funds used for the purposes in section 39-2-1.2;

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and the businesses, vendors, and institutions that received the administrative funds for the

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purposes in sections 39-2-1.2(i)(k) and 39-2-1.2(j)(l). These reports shall be posted electronically

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on the websites of the office of energy resources and the energy efficiency resources management

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council.

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     SECTION 2. Section 39-26-7 of the General Laws in Chapter 39-26 entitled "Renewable

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Energy Standard" is hereby amended to read as follows:

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     39-26-7. Renewable energy development fund. -- (a) The general assembly finds that

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the renewable energy development fund is a tool of the economic development corporation to

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support Rhode Island's economic development by stimulating job growth, attracting and retaining

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businesses, and promoting the development of new technologies and the green energy sector.

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     (a)(b) There is hereby authorized and created within the economic development

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corporation a renewable energy development fund for the purpose of increasing the supply of NE-

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GIS certificates available for compliance in future years by obligated entities with renewable

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energy standard requirements, as established in this chapter. The fund shall be located at and

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administered by the Rhode Island economic development corporation in accordance with section

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42-64-13.2. The economic development corporation shall:

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      Adopt plans and guidelines for the management and use of the fund in accordance with

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section 42-64-13.2, and

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      (b)(c) The economic development corporation shall enter into agreements with obligated

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entities to accept alternative compliance payments, consistent with rules of the commission and

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the purposes set forth in this section; and alternative compliance payments received pursuant to

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this section shall be trust funds to be held and applied solely for the purposes set forth in this

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section.

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      (c)(d) The uses of the fund shall include but not be limited to:

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      (1) Stimulating investment in renewable energy development by entering into

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agreements, including multi-year agreements, for renewable energy certificates;

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      (2) Establishing and maintaining a residential renewable energy program using eligible

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technologies in accordance with section 39-26-5;

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      (3) Providing technical and financial assistance to municipalities for interconnection and

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feasibility studies, and/or the installation of renewable energy projects;

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      (4) Issuing assurances and/or guarantees to support the acquisition of renewable energy

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certificates and/or the development of new renewable energy sources for Rhode Island;

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      (5) Establishing escrows, reserves, and/or acquiring insurance for the obligations of the

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fund;

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      (6) Paying administrative costs of the fund incurred by the economic development

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corporation, the board of trustees, or the office of energy resources, not to exceed ten percent

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(10%) of the income of the fund, including, but not limited to, alternative compliance payments.

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All funds transferred from the economic development corporation to support the office of energy

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resources' administrative costs shall be deposited as restricted receipts.

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     (7) Effective January 1, 2014, allocating twenty percent (20%) of the income of the fund,

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including, but not limited to, alternative compliance payments, to the office of energy resources

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in administering this program for the purposes of developing, promoting and financing renewable

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energy programs. Administrative funds not expended in any fiscal year shall remain in the

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administrative account to be used as needed in subsequent years. The office of energy resources

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shall have the ability to apply administrative funds not used in a fiscal year to achieve the

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purposes of this section. The funds deposited into the administrative funds account shall be

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exempt from the indirect cost recovery provisions of section 35-4-27. The office of energy

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resources shall provide annually to the economic development corporation a detailed accounting

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of this administrative funds account, and this accounting shall be included in the annual financial

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and performance report of the Rhode Island renewable energy development fund.

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      (d)(e) NE-GIS certificates acquired through the fund may be conveyed to obligated

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entities or may be credited against the renewable energy standard for the year of the certificate

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provided that the commission assesses the cost of the certificates to the obligated entity, or

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entities, benefiting from the credit against the renewable energy standard, which assessment shall

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be reduced by previously made alternative compliance payments and shall be paid to the fund.

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     SECTION 3. This act shall take effect upon passage.

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LC01986

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS - DUTIES OF PUBLIC UTILITIES

AND CARRIERS

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     This act would require that twenty percent (20%) of the renewable energy program

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development fund administered by the economic development corporation be allocated annually

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to the office of energy resources for the purposes of developing, promoting and financing

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renewable energy programs effective January 1, 2014.

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     This act would take effect upon passage.

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LC01986

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