2015 -- H 5218

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LC000367

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS - PUBLIC UTILITIES COMMISSION

     Introduced By: Representatives Lancia, Diaz, Regunberg, Roberts, and Price

     Date Introduced: January 29, 2015

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 39-1-27.3 of the General Laws in Chapter 39-1 entitled "Public

Utilities Commission" is hereby amended to read as follows:

     39-1-27.3. Electric distribution companies required to provide retail access,

standard offer and last resort service. -- (a) To promote economic development and the

creation and preservation of employment opportunities within the state, each electric distribution

company shall offer retail access from nonregulated power producers to all customers.

      (b) Through year 2009, and effective July 1, 2007, through year 2020, each electric

distribution company shall arrange for a standard power supply offer ("standard offer") to

customers that have not elected to enter into power supply arrangements with other nonregulated

power suppliers. The rates that are charged by the electric distribution company to customers for

standard offer service shall be approved by the commission and shall be designed to recover the

electric distribution company's costs and no more than the electric distribution company's costs;

provided, that the commission may establish and/or implement a rate that averages the costs over

periods of time. The electric rates under this section shall not be increased by a total amount in

excess of five percent (5%) in any three (3) year period without general assembly approval. The

electric distribution company shall not be entitled to recover any profit margin on the sale of

standard offer power, except with approval of the commission as may be necessary to implement

fairly and effectively, system reliability and least-cost procurement. The electric distribution

company will be entitled to recover its costs incurred from providing the standard offer arising

out of: (1) wholesale standard offer supply agreements with power suppliers in effect prior to

January 1, 2002; (2) power supply arrangements that are approved by the commission after

January 1, 2002; (3) power supply arrangements made pursuant to §§ 39-1-27.3.1 and 39-1-27.8;

and (4) any other power supply related arrangements prudently made after January 1, 2002 to

provide standard offer supply or to mitigate standard offer supply costs, including costs for

system reliability, procurement and least-cost procurement, as provided for in § 39-1-27.7.

Subject to commission approval, the electric distribution company may enter into financial

contracts designed to hedge fuel-related or other variable costs associated with power supply

arrangements and the costs of any such financial contracts shall be recoverable in standard offer

rates. The electric distribution company's standard offer revenues and its standard offer costs shall

be accounted for and reconciled with interest at least annually. Except as otherwise may be

directed by the commission in order to accomplish purposes established by law, any over

recoveries shall be refunded to customers in a manner directed by the commission, and any under

recoveries shall be recovered by the electric distribution company through a uniform adjustment

factor approved by the commission. The commission shall have the discretion to apply such

adjustment factor in any given instance to all customers or to such specific class of customers that

the commission deems equitable under the circumstances provided that the distribution company

recovers any under recovery in its entirety. Once a customer has elected to enter into a power

supply arrangement with a nonregulated power producer, the electric distribution company shall

not be required to arrange for the standard offer to such customer except as provided in § 39-1-

27.3.1. No customer who initially elects the standard offer and then chooses an alternative

supplier shall be required to pay any withdrawal fee or penalty to the provider of the standard

offer unless such a penalty or withdrawal fee was agreed to as part of a contract; however, no

residential customer shall be required to pay a penalty or withdrawal fee for choosing an

alternative supplier. Nothing in this subsection shall be construed to restrict the right of any

nonregulated power producer to offer to sell power to customers at a price comparable to that of

the standard offer specified pursuant to this subsection. The electric distribution company may

not terminate an existing standard offer wholesale supply agreement without the written consent

of the division.

      (c) In recognition that electricity is an essential service, each electric distribution

company shall arrange for a last resort power supply for customers who have left the standard

offer for any reason and are not otherwise receiving electric service from nonregulated power

producers. The electric distribution company shall procure last resort service supply from

wholesale power suppliers. Prior to acquiring last resort supply, the electric distribution company

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will file with the commission a supply acquisition plan or plans that include the acquisition

procedure, the pricing options being sought, and a proposed term of service for which last resort

service will be acquired. The term of service may be short or long term and acquisitions may

occur from time to time and for more than one supplier for segments of last resort service load

over different terms, if appropriate. All the components of the acquisition plans, however, shall be

subject to commission review and approval. Once an acquisition plan is approved by the

commission, the electric distribution company shall be authorized to acquire last resort service

supply consistent with the approved acquisition plan and recover its costs incurred from

providing last resort service pursuant to the approved acquisition plan. The commission may

periodically review the acquisition plan to determine whether it should be prospectively modified

due to changed market conditions. The commission shall have the authority and discretion to

approve special tariff conditions and rates proposed by the electric distribution company that the

commission finds are in the public interest, including without limitation: (1) short and long term

optional service at different rates; (2) term commitments or notice provisions before individual

customers leave last resort service; (3) last resort service rates for residential or any other special

class of customers that are different than the rates for other last resort customers; and/or (4) last

resort service rates that are designed to encourage any class of customers to return to the market.

The electric distribution company's last resort service revenues and its last resort service costs

shall be accounted for and reconciled with interest at least annually. Any over recoveries shall be

refunded and any under recoveries shall be recovered by the electric distribution company

through a uniform adjustment factor approved by the commission. The commission shall have the

discretion to apply such adjustment factor in any given instance to all customers or to such

specific class of customers that the commission deems equitable under the circumstances

provided that the distribution company recovers any under recovery in its entirety. Nothing in this

section shall be construed to prohibit an electric distribution company from terminating service

provided hereunder in accordance with commission rules and regulations in the event of

nonpayment of this service. The commission may promulgate regulations to implement this

section including the terms and conditions upon which last resort service is offered and provided

to customers.

      (d) If a customer being served by a nonregulated power producer pays any taxes assessed

for electric service to the electric distribution company and the electric distribution company

forwards such tax payment for the power portion of the bill to a nonregulated power producer for

payment by the nonregulated power producer to the state, neither the customer nor the electric

distribution company shall be liable for such taxes forwarded if the nonregulated power producer

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fails to remit such taxes to the state for any reason.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS - PUBLIC UTILITIES COMMISSION

***

     This act would provide that electric rate increases over five percent (5%) in a three (3)

year period be subject to general assembly approval.

     This act would take effect upon passage.

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