2022 -- S 2687

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LC004784

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2022

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- PUBLIC UTILITIES COMMISSION

     

     Introduced By: Senators Euer, Seveney, Miller, DiPalma, Kallman, Coyne, Ruggerio,
Quezada, and Valverde

     Date Introduced: March 17, 2022

     Referred To: Senate Commerce

     It is enacted by the General Assembly as follows:

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     SECTION 1. Section 39-1-27.7.1 of the General Laws in Chapter 39-1 entitled "Public

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Utilities Commission" is hereby amended to read as follows:

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     39-1-27.7.1. Revenue decoupling.

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     (a) The general assembly finds and declares that electricity and gas revenues shall be fully

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decoupled from sales pursuant to the provisions of this chapter and further finds and declares that

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any decoupling proposal submitted by an electric distribution company as defined in § 39-1-

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2(a)(12) or gas distribution company included as a public utility in § 39-1-2(a)(20) that has greater

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than one hundred thousand (100,000) customers, shall be for the following purposes:

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     (1) Increasing efficiency in the operations and management of the electric and gas

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distribution system;

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     (2) Achieving the goals established in the gas and electric distribution company's plan

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companies' plans for system reliability and energy efficiency and conservation procurement as

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required pursuant to § 39-1-27.7(d);

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     (3) Increasing investment in least-cost resources that will reduce long-term electricity

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demand;

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     (4) Reducing risks for both customers and the distribution company including, but not

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limited to, societal risks, weather risks, and economic risks;

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     (5) Increasing investment in end-use energy efficiency;

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     (6) Eliminating disincentives to support energy-efficiency programs;

 

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     (7) Facilitating and encouraging investment in utility infrastructure, safety, and reliability;

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and

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     (8) Considering the reduction of fixed, recurring customer charges and transition to

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increased unit charges that more accurately reflect the long-term costs of energy production and

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delivery.; and

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     (9) Eliminating incentives for connecting new customers to the gas distribution system.

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     (b) Each electric distribution company as defined by § 39-1-2(a)(12) and gas distribution

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company included as a public utility in § 39-1-2(a)(20) having greater than one hundred thousand

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(100,000) customers shall file proposals at the commission to implement the policy set forth in

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subsection (a) of this section. On or before December 1, 2022, each gas distribution company shall

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file a new proposal consistent with all of the provisions of this chapter. The commission shall

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approve these proposals, provided they contain the features and components set forth in subsection

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(c) of this section, and that they are consistent with the intent and objectives contained in subsection

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(a) of this section. Actions taken by the commission in the exercise of its ratemaking authority for

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electric and gas rate cases shall be within the norm of industry standards and recognize the need to

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maintain the financial health of the distribution company as a stand-alone entity in Rhode Island.

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     (c) The proposals shall contain the following features and components:

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     (1) A revenue decoupling reconciliation mechanism that reconciles annually the revenue

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requirement allowed in the company's base distribution-rate case to revenues actually received for

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the applicable twelve-month (12) period; provided that the mechanism for gas distribution shall be

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determined on a revenue-per-customer basis, in a manner typically employed for gas distribution

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companies in the industry by a method to be approved by the commission that shall provide for

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financial stability of the company and not create a financial incentive to connect new customers to

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the gas distribution system. Any revenues over-recovered or under-recovered shall be credited to,

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or recovered from, customers, as applicable; and

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     (2) An annual infrastructure, safety, and reliability spending plan for each fiscal year and

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an annual rate-reconciliation mechanism that includes a reconcilable allowance for the anticipated

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capital investments and other spending pursuant to the annual pre-approved budget as developed

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in accordance with subsection (d) of this section.

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     (d) Prior to the beginning of each fiscal year, gas and electric distribution companies shall

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consult with the division of public utilities and carriers regarding their infrastructure, safety, and

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reliability spending plan for the following fiscal year, addressing the following categories:

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     (1) Capital spending on utility infrastructure;

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     (2) For electric distribution companies, operation and maintenance expenses on vegetation

 

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management;

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     (3) For electric distribution companies, operation and maintenance expenses on system

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inspection, including expenses from expected resulting repairs; and

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     (4) Any other costs relating to maintaining safety and reliability that are mutually agreed

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upon by the division and the company.

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     The distribution company shall submit a plan to the division and the division shall

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cooperate in good faith to reach an agreement on a proposed plan for these categories of costs for

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the prospective fiscal year within sixty (60) days. To the extent that the company and the division

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mutually agree on a plan, such plan shall be filed with the commission for review and approval

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within ninety (90) days. If the company and the division cannot agree on a plan, the company shall

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file a proposed plan with the commission and the commission shall review and, if the investments

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and spending are found to be reasonably needed to maintain safe and reliable distribution service

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over the short and long term, approve the plan within ninety (90) days.

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     (e) The commission shall have the following duties and powers, in addition to its existing

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authorities established in this title:

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     (1) To maintain reasonable and adequate service-quality standards, after decoupling, that

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are in effect at the time of the proposal and were established pursuant to § 39-3-7.

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     (2) The commission may exclude the low-income rate class from the revenue decoupling

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reconciliation-rate mechanism for either electric or gas distribution. The commission also may

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exclude customers in the large commercial and industrial rate class from the gas-distribution

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mechanism.

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     (3) The commission may adopt performance incentives for the electric distribution

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company that provide a shared-savings mechanism whereby the company would receive a

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percentage of savings realized as a result of achieving the purposes of this section while the

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remaining savings are credited to customers.

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     (4) The commission shall review and approve, with any necessary amendments,

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performance-based, energy-savings targets developed and submitted by the Rhode Island energy

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efficiency and resources management council. The performance-based targets shall also be used as

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a consideration in any shared-savings mechanism established by the commission pursuant to

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subsection (e)(3) of this section.

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     (f) The Rhode Island energy efficiency and resources management council shall propose

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performance-based, energy-savings targets to the commission no later than September 1, 2010. The

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targets shall include, but not be limited to, specific energy kilowatt-hour savings overall and peak-

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demand savings for both summer and winter peak periods expressed in total megawatts as well as

 

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appropriate targets recommended in the opportunities report filed with the commission pursuant to

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§ 39-1-27.7(d)(3). The council shall revise, as necessary, these targets on an annual basis prior to

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the reconciliation process established pursuant to subsection (c) of this section and submit its

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revisions to the commission for approval.

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     (g) Reporting. Every electric distribution company, as defined in subsection (a) of this

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section, shall report to the governor, general assembly, division of public utilities and carriers, and

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public utilities commission on or before September 1, 2012. The report shall include, but not be

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limited to, the following elements:

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     (1) A comparison of revenues from traditional rate regulation and how the revenues have

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differed as part of an approved decoupling structure;

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     (2) A summary of how the company is achieving the performance-based targets that may

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have been adopted pursuant to subsection (e)(4) of this section;

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     (3) A summary of any shared savings the company may have received pursuant to the

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performance incentives authorized in subsection (e)(3) of this section;

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     (4) A summary of how the company is achieving the service-quality standards required in

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subsection (e)(1) of this section;

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     (5) An overview of how decoupling is impacting revenue stabilization goals that have

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resulted from decoupling; and

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     (6) A summary of any customer education programs provided.

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     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

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     This act would eliminate incentives for connecting new customers to the gas distribution

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system. Additionally each gas distribution company shall file a new proposal consistent with the

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provisions of this chapter by December 1, 2022.

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     This act would take effect upon passage.

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