2022 -- S 2686 | |
======== | |
LC005003 | |
======== | |
STATE OF RHODE ISLAND | |
IN GENERAL ASSEMBLY | |
JANUARY SESSION, A.D. 2022 | |
____________ | |
A N A C T | |
RELATING TO PUBLIC UTILITIES AND CARRIERS -- PUBLIC UTILITIES COMMISSION | |
-- SOCIAL COST OF CARBON | |
| |
Introduced By: Senators Cano, Miller, Euer, Quezada, DiMario, Acosta, Mack, and | |
Date Introduced: March 17, 2022 | |
Referred To: Senate Commerce | |
It is enacted by the General Assembly as follows: | |
1 | SECTION 1. Section 39-1-27.7 of the General Laws in Chapter 39-1 entitled "Public |
2 | Utilities Commission" is hereby amended to read as follows: |
3 | 39-1-27.7. System reliability and least-cost procurement. |
4 | (a) Least-cost procurement shall comprise system reliability and energy efficiency and |
5 | conservation procurement, as provided for in this section, and supply procurement, as provided for |
6 | in ยง 39-1-27.8, as complementary but distinct activities that have as common purpose meeting |
7 | electrical and natural gas energy needs in Rhode Island, in a manner that is optimally cost-effective, |
8 | reliable, prudent, and environmentally responsible. |
9 | (b) The commission shall establish not later than June 1, 2008, standards for system |
10 | reliability and energy efficiency and conservation procurement that shall include standards and |
11 | guidelines for: |
12 | (1) System reliability procurement, including but not limited to: |
13 | (i) Procurement of energy supply from diverse sources, including, but not limited to, |
14 | renewable energy resources as defined in chapter 26 of this title; |
15 | (ii) Distributed generation, including, but not limited to, renewable energy resources and |
16 | thermally leading combined heat and power systems, that is reliable and is cost-effective, with |
17 | measurable, net system benefits; |
18 | (iii) Demand response, including, but not limited to, distributed generation, back-up |
| |
1 | generation, and on-demand usage reduction, that shall be designed to facilitate electric customer |
2 | participation in regional demand response programs, including those administered by the |
3 | independent service operator of New England ("ISO-NE"), and/or are designed to provide local |
4 | system reliability benefits through load control or using on-site generating capability; |
5 | (iv) To effectuate the purposes of this division, the commission may establish standards |
6 | and/or rates (A) For qualifying distributed generation, demand response, and renewable energy |
7 | resources; (B) For net metering; (C) For back-up power and/or standby rates that reasonably |
8 | facilitate the development of distributed generation; and (D) For such other matters as the |
9 | commission may find necessary or appropriate. |
10 | (2) Least-cost procurement, which shall include procurement of energy efficiency and |
11 | energy conservation measures that are prudent and reliable and when such measures are lower cost |
12 | than acquisition of additional supply, including supply for periods of high demand. |
13 | (c) The standards and guidelines provided for by subsection (b) shall be subject to periodic |
14 | review and as appropriate amendment by the commission, which review will be conducted not less |
15 | frequently than every three (3) years after the adoption of the standards and guidelines. |
16 | (d) To implement the provisions of this section: |
17 | (1) The commissioner of the office of energy resources and the energy efficiency and |
18 | resources management council, either jointly or separately, shall provide the commission findings |
19 | and recommendations with regard to system reliability and energy efficiency and conservation |
20 | procurement on or before March 1, 2008, and triennially on or before March 1 thereafter through |
21 | March 1, 2028. The report shall be made public and be posted electronically on the website of the |
22 | office of energy resources. |
23 | (2) The commission shall issue standards not later than June 1, 2008, with regard to plans |
24 | for system reliability and energy efficiency and conservation procurement, which standards may |
25 | be amended or revised by the commission as necessary and/or appropriate. |
26 | (3) The energy efficiency and resources management council shall prepare by July 15, |
27 | 2008, a reliability and efficiency procurement opportunity report that shall identify opportunities |
28 | to procure efficiency, distributed generation, demand response, and renewables and that shall be |
29 | submitted to the electrical distribution company, the commission, the office of energy resources, |
30 | and the joint committee on energy. |
31 | (4) Each electrical and natural gas distribution company shall submit to the commission on |
32 | or before September 1, 2008, and triennially on or before September 1 thereafter through September |
33 | 1, 2028, a plan for system reliability and energy efficiency and conservation procurement. In |
34 | developing the plan, the distribution company may seek the advice of the commissioner and the |
| LC005003 - Page 2 of 7 |
1 | council. The plan shall include measurable goals and target percentages for each energy resource, |
2 | pursuant to standards established by the commission, including efficiency, distributed generation, |
3 | demand response, combined heat and power, and renewables. The plan shall be made public and |
4 | be posted electronically on the website of the office of energy resources, and shall also be submitted |
5 | to the general assembly. |
6 | (5) The commission shall issue an order approving all energy-efficiency measures that are |
7 | cost-effective and lower cost than acquisition of additional supply, with regard to the plan from the |
8 | electrical and natural gas distribution company, and reviewed and approved by the energy |
9 | efficiency and resources management council, and any related annual plans, and shall approve a |
10 | fully reconciling funding mechanism to fund investments in all efficiency measures that are cost- |
11 | effective and lower cost than acquisition of additional supply, not greater than sixty (60) days after |
12 | it is filed with the commission. |
13 | (6)(i) Each electrical and natural gas distribution company shall provide a status report, |
14 | which shall be public, on the implementation of least-cost procurement on or before December 15, |
15 | 2008, and on or before February 1, 2009, to the commission, the division, the commissioner of the |
16 | office of energy resources, and the energy efficiency and resources management council which |
17 | may provide the distribution company recommendations with regard to effective implementation |
18 | of least-cost procurement. The report shall include the targets for each energy resource included in |
19 | the order approving the plan and the achieved percentage for energy resource, including the |
20 | achieved percentages for efficiency, distributed generation, demand response, combined heat and |
21 | power, and renewables, as well as the current funding allocations for each eligible energy resource |
22 | and the businesses and vendors in Rhode Island participating in the programs. The report shall be |
23 | posted electronically on the website of the office of energy resources. |
24 | (ii) Beginning on November 1, 2012, or before, each electric distribution company shall |
25 | support the installation and investment in clean and efficient combined heat and power installations |
26 | at commercial, institutional, municipal, and industrial facilities. This support shall be documented |
27 | annually in the electric distribution company's energy-efficiency program plans. In order to |
28 | effectuate this provision, the energy efficiency and resource management council shall seek input |
29 | from the public, the gas and electric distribution company, the commerce corporation, and |
30 | commercial and industrial users, and make recommendations regarding services to support the |
31 | development of combined heat and power installations in the electric distribution company's annual |
32 | and triennial energy-efficiency program plans. |
33 | (iii) The energy-efficiency annual plan shall include, but not be limited to, a plan for |
34 | identifying and recruiting qualified combined heat and power projects, incentive levels, contract |
| LC005003 - Page 3 of 7 |
1 | terms and guidelines, and achievable megawatt targets for investments in combined heat and power |
2 | systems. In the development of the plan, the energy efficiency and resource management council |
3 | and the electric distribution company shall factor into the combined heat and power plan and |
4 | program, the following criteria: (A) Economic development benefits in Rhode Island, including |
5 | direct and indirect job creation and retention from investments in combined heat and power |
6 | systems; (B) Energy and cost savings for customers; (C) Energy supply costs; (D) Greenhouse gas |
7 | emissions standards and air quality benefits; and (E) System reliability benefits. |
8 | (iv) The energy efficiency and resource management council shall conduct at least one |
9 | public review meeting annually, to discuss and review the combined heat and power program, with |
10 | at least seven (7) business days' notice, prior to the electric and gas distribution utility submitting |
11 | the plan to the commission. The commission shall evaluate the submitted combined heat and power |
12 | program as part of the annual energy-efficiency plan. The commission shall issue an order |
13 | approving the energy-efficiency plan and programs within sixty (60) days of the filing. |
14 | (e) If the commission shall determine that the implementation of system reliability and |
15 | energy efficiency and conservation procurement has caused, or is likely to cause, under or over- |
16 | recovery of overhead and fixed costs of the company implementing the procurement, the |
17 | commission may establish a mandatory rate-adjustment clause for the company so affected in order |
18 | to provide for full recovery of reasonable and prudent overhead and fixed costs. |
19 | (f) The commission shall conduct a contested case proceeding to establish a performance- |
20 | based incentive plan that allows for additional compensation for each electric distribution company |
21 | and each company providing gas to end-users and/or retail customers based on the level of its |
22 | success in mitigating the cost and variability of electric and gas services through procurement |
23 | portfolios. |
24 | (g)(1) The office of energy resources shall conduct a study and analysis of the electric and |
25 | gas distribution company's state energy efficiency programs that will examine implemented |
26 | program and planned conservation measures and review and confirm the claimed energy savings. |
27 | In carrying out this study, the office shall utilize a representative sample of different customer |
28 | classes and measures that have and/or will be participating in the state energy efficiency programs. |
29 | At a minimum, the study performed by the office of energy resources shall include the following |
30 | in its scope of work: |
31 | (i) Independently review and summarize the electric and gas distribution company process |
32 | for incorporating results from completed evaluation studies into ongoing energy efficiency program |
33 | reporting and implementation. |
34 | (ii) Conduct an independent review of gas and electricity efficiency programs, which may |
| LC005003 - Page 4 of 7 |
1 | include billing analysis techniques. The scope and subjects of this analysis will be decided by the |
2 | working group with input and advice from an independent consultant. The analysis will be |
3 | conducted by a qualified independent consultant using industry accepted methods. |
4 | (iii) Review the data-collection practices, including metering equipment used; sampling |
5 | frequency; sample sizes; and data validation procedures, and the methods for data analysis |
6 | employed, as deemed appropriate by the independent evaluator. |
7 | (iv) Study results and recommendations will be presented to the public utilities commission |
8 | and the energy efficiency and resource management council. |
9 | (2) The office of energy resources shall consult with the working group in development of |
10 | the request for proposals (RFP), and during the course of the study, including the preliminary study |
11 | results. The working group shall be comprised of one representative from each of the following |
12 | groups chosen by the office of energy resources: |
13 | (i) Large commercial and industrial energy users; |
14 | (ii) Small business energy users; |
15 | (iii) Residential energy users; |
16 | (iv) Municipal and state energy users; |
17 | (v) Low-income energy users; |
18 | (vi) Electric and gas distribution company; and |
19 | (vii) Energy efficiency and resource management council. |
20 | (3) The office of energy resources, in consultation with the electric and gas distribution |
21 | company and representatives referenced in subsection (g)(2), shall be authorized to hire an energy |
22 | consulting company or firm to carry out the energy efficiency verification study. The costs |
23 | associated with this study, including, but not limited to, those associated with the consultant or firm |
24 | contract and reasonable administrative costs incurred by the office in the execution of subsection |
25 | (g) of this section, shall be recoverable through the system benefit charge subject to commission |
26 | approval. Funding shall be transferred from the electric and gas distribution utility to the office of |
27 | energy resources upon request by the office. |
28 | (4) The office of energy resources shall submit this report on or before October 30, 2019, |
29 | to the governor, the president of the senate, and the speaker of the house. The office and its selected |
30 | energy consulting company or firm shall host two (2) public presentations on the preliminary and |
31 | final results of the study. |
32 | (h) The commission shall, no later than December 31, 2022, establish a social cost of |
33 | carbon (SCC) to be included as part of any benefit cost or other analysis conducted by the |
34 | commission, or by a party to a commission docket. In determining the social cost of carbon, the |
| LC005003 - Page 5 of 7 |
1 | commission shall take note of ongoing efforts by the federal government to utilize a similar metric, |
2 | however, the commission must make an independent determination. The social cost of carbon shall |
3 | be included in any analysis of the cost of acquiring additional supply in comparison to energy |
4 | efficiency and energy conservation measures and also in any other matter properly before the |
5 | commission where the proposed action is reasonably believed to result in the release of additional |
6 | greenhouse gases. The commission may consider revisions to the social cost of carbon no sooner |
7 | than two (2) years following its establishment and no more than once during any subsequent two |
8 | (2) year period. |
9 | SECTION 2. This act shall take effect upon passage. |
======== | |
LC005003 | |
======== | |
| LC005003 - Page 6 of 7 |
EXPLANATION | |
BY THE LEGISLATIVE COUNCIL | |
OF | |
A N A C T | |
RELATING TO PUBLIC UTILITIES AND CARRIERS -- PUBLIC UTILITIES COMMISSION | |
-- SOCIAL COST OF CARBON | |
*** | |
1 | This act would require the public utilities commission to establish a social cost of carbon, |
2 | and factor it into a cost benefit analysis, whenever programs are proposed to curb climate change |
3 | and carbon dioxide emission |
4 | This act would take effect upon passage. |
======== | |
LC005003 | |
======== | |
| LC005003 - Page 7 of 7 |