2021 -- S 0781 SUBSTITUTE A

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2021

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS - DUTIES OF UTILITIES AND

CARRIERS

     Introduced By: Senators Pearson, Murray, Seveney, Cano, and DiPalma

     Date Introduced: April 01, 2021

     Referred To: Senate Finance

     (General Treasurer)

It is enacted by the General Assembly as follows:

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

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

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

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

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

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

is designed to promote the public image of the industry. No public utility may furnish support of

any kind, direct or indirect, to any subsidiary, group, association, or individual for advertising and

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

prohibiting the inclusion in the base rate of expenses incurred for advertising, informational or

educational in nature, that is designed to promote public safety conservation of the public utility's

product or service. The public utilities commission shall promulgate such rules and regulations as

are necessary to require public disclosure of all advertising expenses of any kind, direct or indirect,

and to otherwise effectuate the provisions of this section.

     (b) Effective as of January 1, 2008, and for a period of fifteen (15) years thereafter, each

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

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

programs shall remain in effect until December 31, 2022. The electric distribution company shall

establish and, after July 1, 2007, maintain, two (2) separate accounts, one for demand-side

management programs (the "demand-side account"), which shall be funded by the electric demand-

side charge and administered and implemented by the distribution company, subject to the

regulatory reviewing authority of the commission, and one for renewable energy programs, which

shall be administered by the Rhode Island commerce corporation pursuant to § 42-64-13.2 and shall

be held and disbursed by the distribution company as directed by the Rhode Island commerce

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

     During the time periods established in this subsection, the commission may, in its

discretion, after notice and public hearing, increase the sums for demand-side management and

renewable resources. In addition, the commission shall, after notice and public hearing, determine

the appropriate charge for these programs. The office of energy resources, and/or the administrator

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

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

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

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

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

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

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

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

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

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

efficiency technology to be included in demand-side management programs. Special rates for low-

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

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

section shall be construed as prohibiting an electric distribution company from offering any special

rates or programs for low-income customers which are not in effect as of August 7, 1996, subject

to the approval by the commission.

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

established by the Rhode Island commerce corporation. Said rules shall provide transparent criteria

to rank qualified renewable energy projects, giving consideration to:

     (i) The feasibility of project completion;

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

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

     (iv) The estimated cost per kilowatt-hour (KWh) of the energy produced from the project.

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     (c) [Deleted by P.L. 2012, ch. 241, art. 4, § 14.]

     (d) The chief executive officer of the commerce corporation is authorized and may enter

into a contract with a contractor for the cost-effective administration of the renewable energy

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

renewable energy programs may occur every three (3) years and shall include, as a condition, that

after July 1, 2008, the account for the renewable energy programs shall be maintained and

administered by the commerce corporation as provided for in subsection (b) of this section.

     (e) Effective January 1, 2007, and for a period of sixteen (16) years thereafter, each gas

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

delivered to fund demand-side management programs (the "gas demand-side charge"), including,

but not limited to, programs for cost-effective energy efficiency, energy conservation, combined

heat and power systems, and weatherization services for low-income households.

     (f) Each gas company shall establish a separate account for demand-side management

programs (the "gas demand-side account") that shall be funded by the gas demand-side charge and

administered and implemented by the distribution company, subject to the regulatory reviewing

authority of the commission. The commission may establish administrative mechanisms and

procedures that are similar to those for electric demand-side management programs administered

under the jurisdiction of the commission and that are designed to achieve cost-effectiveness and

high, life-time savings of efficiency measures supported by the program.

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

management charge:

     (1) Gas used for distribution generation; and

     (2) Gas used for the manufacturing processes, where the customer has established a self-

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

approved by the commission and subject to periodic review and approval by the commission, which

plan shall require annual reporting of the amount invested and the return on investments in terms

of gas savings.

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

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

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

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

designated by the commission pursuant to a competitive selection process.

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

gas and electric funds authorized pursuant to this section, an amount not to exceed two percent

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(2%) of such funds on an annual basis for the retention of expert consultants, and reasonable

administration costs of the energy efficiency and resources management council associated with

planning, management, and evaluation of energy-efficiency programs, renewable energy programs,

system reliability least-cost procurement, and with regulatory proceedings, contested cases, and

other actions pertaining to the purposes, powers, and duties of the council, which allocation may

by mutual agreement, be used in coordination with the office of energy resources to support such

activities.

     (j) Effective January 1, 2016, the commission shall annually allocate from the

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

program as described in subsection (i) as follows: fifty percent (50%) for the purposes identified in

subsection (i) and fifty percent (50%) annually to the office of energy resources for activities

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

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

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

energy resources.

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

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

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

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

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

demand-side management gas and electric funds used for the purposes in this section; and the

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

subsections (i) and (j). These reports shall be posted electronically on the websites of the office of

energy resources and the energy efficiency and resources management council.

     (l) On or after August 1, 2015, at the request of the Rhode Island infrastructure bank, each

electric distribution company, except for the Pascoag Utility District and Block Island Power

Company, shall remit two percent (2%) of the amount of the 2014 electric demand-side charge

collections to the Rhode Island infrastructure bank.

     (m) On or after August 1, 2015, at the request of the Rhode Island infrastructure bank, each

gas distribution company shall remit two percent (2%) of the amount of the 2014 gas demand-side

charge collections to the Rhode Island infrastructure bank.

     (n) Effective January 1, 2022, the commission shall allocate from demand-side

management gas and electric funds authorized pursuant to this section, five million dollars

($5,000,000) of such funds on an annual basis to the Rhode Island infrastructure bank. Gas and

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electric demand-side funds transferred to the Rhode Island infrastructure bank pursuant to this

section shall be eligible to be used in any energy efficiency, renewable energy, or demand-side

management project financing program administered by the Rhode Island infrastructure bank,

notwithstanding any other restrictions on the use of such collections set forth in this chapter. The

infrastructure bank shall report annually to the commission within ninety (90) days of the end of

each calendar year how collections transferred under this section were utilized.

     SECTION 2. Chapter 46-12.2 of the General Laws entitled "Rhode Island Infrastructure

Bank" is hereby amended by adding thereto the following section:

     46-12.2-4.3. Establishment of the clean energy fund.

     (a)(1) There is hereby authorized and created within the Rhode Island infrastructure bank

a clean energy fund for the purpose of providing technical, administrative and financial assistance

to a local governmental unit, corporation, or person for energy efficient, renewable energy, and

demand-side management projects. The Rhode Island infrastructure bank shall review and approve

all applications for projects to be financed through the clean energy fund.

     (2) The Rhode Island infrastructure bank shall promulgate rules and regulations to

effectuate the provisions of this section which may include, without limitation, forms for financial

assistance applications, loan agreements, and other instruments and establishing the process

through which a local governmental unit, corporation or person may submit an application for

financial assistance from the clean energy fund. All rules and regulations promulgated pursuant to

this chapter shall be promulgated in accordance with the provisions of chapter 35 of title 42.

     (b) The Rhode Island infrastructure bank shall have all the powers necessary and

convenient to carry out and effectuate the purposes and provisions of this section including, without

limiting the generality of the preceding statement, the authority:

     (1) To receive and disburse such funds as may be available for the purpose of the fund

subject to the provisions of this section;

     (2) To make and enter into binding commitments to provide financial assistance to eligible

borrowers from amounts on deposit in the fund;

     (3) To levy administrative fees on eligible borrowers as necessary to effectuate the

provisions of this section; provided, the fees have been previously authorized by an agreement

between the Rhode Island infrastructure bank and the eligible borrower;

     (4) To engage the services of third-party vendors to provide professional services;

     (5) To establish one or more accounts within the fund; and

     (6) Such other authority as granted to the Rhode Island infrastructure bank under this

chapter.

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     (c) Subject to the provisions of this section and to any agreements with the holders of any

bonds of the Rhode Island infrastructure bank or any trustee therefor, amounts held by the Rhode

Island infrastructure bank for the account of the fund shall be applied by the Rhode Island

infrastructure bank, either by direct expenditure, disbursement, or transfer to one or more other

funds and accounts held by the Rhode Island infrastructure bank or maintained under any trust

agreement pertaining to bonds, either alone or with other funds of the Rhode Island infrastructure

bank, to the following purposes:

     (1) To provide financial assistance to local governmental units, corporations or persons to

finance costs of approved projects, as set forth in subsection (a) of this section, and to refinance the

costs of the projects, subject to such terms and conditions, if any, as are determined by the Rhode

Island infrastructure bank;

     (2) To fund reserves for bonds of the Rhode Island infrastructure bank and to purchase

insurance and pay the premiums therefor, and pay fees and expenses of letters or lines of credit and

costs of reimbursement to the issuers thereof for any payments made thereon or on any insurance,

and to otherwise provide security for, and a source of payment for obligations of the Rhode Island

infrastructure bank, by pledge, lien, assignment, or otherwise as provided in this chapter;

     (3) To pay expenses of the Rhode Island infrastructure bank in administering the clean

energy fund;

     (4) To provide a reserve for, or to otherwise secure, amounts payable by borrowers on loans

and obligations outstanding in the event of default thereof; amounts in any account in the fund may

be applied to defaults on loans outstanding to the borrower for which the account was established

and, on a parity basis with all other accounts, to defaults on any loans or obligations outstanding;

and

     (5) To provide a reserve for, or to otherwise secure, by pledge, lien, assignment, or

otherwise as provided in this chapter, any bonds of the Rhode Island infrastructure bank.

     (d) In addition to other remedies of the Rhode Island infrastructure bank under any loan

agreement or otherwise provided by law, the Rhode Island infrastructure bank may also recover

from a borrower, in an action in superior court, any amount due the Rhode Island infrastructure

bank together with any other actual damages the Rhode Island infrastructure bank shall have

sustained from the failure or refusal of the borrower to make the payments or abide by the terms of

the loan agreement.

     (e) The Rhode Island infrastructure bank may create one or more loan loss reserve funds

to serve as further security for any loans made by the Rhode Island infrastructure bank or any bonds

of the Rhode Island infrastructure bank issued to fund projects in accordance with this section.

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     (f) To the extent possible, and in accordance with law, the Rhode Island infrastructure bank

shall encourage the use of project labor agreements for projects by local governmental units over

ten million dollars ($10,000,000) and local hiring on projects funded under this section.

     SECTION 3. 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 - DUTIES OF UTILITIES AND

CARRIERS

***

     This act would create and establish the clean energy fund within the Rhode Island

infrastructure bank for its review and approval of all applications for projects to be financed through

demand-side management gas and electric funds up to five million dollars ($5,000,000) per year to

be allocated by the public utilities commission, commencing January 1, 2022.

     This act would take effect upon passage.

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