Chapter 173

2007 -- H 5566 SUBSTITUTE B

Enacted 07/02/07

A N A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- RENEWABLE ELECTRIC GENERATION

Introduced By: Representatives Segal, Handy, Ajello, Walsh, and Ginaitt

Date Introduced: February 28, 2007

It is enacted by the General Assembly as follows:

     SECTION 1. Section 39-26-6 of the General Laws in Chapter 39-26 entitled "Renewable

Energy Standard" is hereby amended to read as follows:

39-26-6. Duties of the commission. -- The commission shall:

      (a) Develop and adopt regulations on or before December 31, 2005, for implementing a

renewable energy standard, which regulations shall include, but be limited to, provisions for:

      (1) Verifying the eligibility of renewable energy generators and the production of energy

from such generators, including requirements to notify the commission in the event of a change in

a generator's eligibility status.

      (2) Standards for contracts and procurement plans for renewable energy resources, to

achieve the purposes of this chapter.

      (3) Flexibility mechanisms for the purposes of easing compliance burdens, facilitating

bringing new renewable resources on-line, and avoiding and/or mitigating conflicts with state

level source disclosure requirements and green marketing claims throughout the region; which

flexibility mechanisms shall allow obligated entities to: (i) demonstrate compliance over a

compliance year; (ii) bank excess compliance for two (2) subsequent compliance years, capped at

thirty percent (30%) of the current year's obligation; and (iii) allow renewable energy generated

during 2006 to be banked by an obligated entity as early compliance, usable towards meeting an

obligated entity's 2007 requirement. Generation used for early compliance must result in the

retirement of NE-GIS certificate in a reserved certificate account designated for such purposes.

      (4) Annual compliance filings to be made by all obligated entities within one month after

NE-GIS reports are available for the fourth (4th) quarter of each calendar year. All electric utility

distribution companies shall cooperate with the commission in providing data necessary to assess

the magnitude of obligation and verify the compliance of all obligated entities.

      (b) Authorize rate recovery by electric utility distribution companies of all prudent

incremental costs arising from the implementation of this chapter, including, without limitation,

the purchase of NE-GIS certificates, the payment of alternative compliance payments, required

payments to support the NE-GIS, assessments made pursuant to section 39-26-7(c) and the

incremental costs of complying with energy source disclosure requirements.

      (c) Certify eligible renewable energy resources by issuing statements of qualification

within ninety (90) days of application. The commission shall provide prospective reviews for

applicants seeking to determine whether a facility would be eligible.

      (d) Determine, on or before January 1, 2010, the adequacy, or potential adequacy, of

renewable energy supplies to meet the increase in the percentage requirement of energy from

renewable energy resources to go into effect in 2011 and determine on or before January 1, 2014,

the adequacy or potential adequacy, of renewable energy supplies to meet the increase in the

percentage requirement of energy from renewable energy resources to go into effect in 2015. In

making such determinations the commission shall consider among other factors the historical use

of alternative compliance payments in Rhode Island and other states in the NEPOOL region. In

the event that the commission determines an inadequacy or potential inadequacy of supplies for

scheduled percentage increases, the commission shall delay the implementation of the scheduled

percentage increase for a period of one year or recommend to the general assembly a revised

schedule of percentage increases, if any, to achieve the purposes of this chapter.

      (e) Establish sanctions for those obligated entities that after investigation have been

found to fail to reasonably comply with the commission's regulations. No sanction or penalty

shall relieve or diminish an obligated entity from liability for fulfilling any shortfall in its

compliance obligation; provided, however, that no sanction shall be imposed if compliance is

achieved through alternative compliance payments. The commission may suspend or revoke the

certification of generation units, certified in accordance with subsection (c) above, that are found

to provide false information, or that fail to notify the commission in the event of a change in

eligibility status or otherwise comply with its rules. Financial penalties resulting from sanctions

from obligated entities shall not be recoverable in rates.

      (f) Report, by February 15, 2006, and by February 15 each year thereafter, to the

governor, the speaker of the house and the president of the senate on the status of the

implementation of the renewable energy standards in Rhode Island and other states, and which

report shall include in 2009, and each year thereafter, the level of use of renewable energy

certificates by eligible renewable energy resources and the portion of renewable energy standards

met through alternative compliance payments, and the amount of rate increases authorized

pursuant to subsection (b) above.

(g) Implement the following changes regarding distributed generation from renewable

energy systems by January 1, 2008 and until January 1, 2010.

(1) Increase the maximum allowable distributed generation capacity for eligible net-

metered energy systems to one megawatt (MW); except that for eligible net-metered renewable

energy systems owned by cities and towns of Rhode Island and the Narragansett Bay

Commission, increase said maximum to 1.65 MW.

(2) Increase the aggregate amount of net metering to a minimum of five (5) megawatts,

provided that at least one megawatt is reserved for projects less than twenty-five (25) kW.

(h) The distribution portion of any small or large renewable credits and the distribution

portion of any distribution company delivery charges displaced by renewable energy systems

subject to subsection (g) above shall be aggregated by the distribution company and billed to all

customers on an annual basis through a uniform per kilowatt-hour surcharge or surcharges.

(i) Report, by July 1, 2010 to the governor, the speaker of the house and the president of

the senate on the status of the implementation of subsection (g) above and if said provisions are

optimally cost-effective, reliable, prudent and environmentally responsible.

     SECTION 2. This act shall take effect upon passage.

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LC01342/SUB B

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