Chapter 363
2012 -- S 2792 SUBSTITUTE A
Enacted 06/21/12
A N A C T
RELATING TO
PUBLIC UTILITIES AND CARRIERS - LEAST-COST PROCUREMENT
Introduced By: Senators Walaska, Lombardo, Sosnowski, Bates, and McCaffrey
Date Introduced: March 21, 2012
It is enacted by the
General Assembly as follows:
SECTION 1. Section 39-1-27.7 of the General Laws in Chapter
39-1 entitled "Public
Utilities Commission"
is hereby amended to read as follows:
39-1-27.7.
System reliability and least-cost procurement. --
Least-cost procurement
shall comprise system reliability and energy efficiency and
conservation procurement as provided
for in this section and supply procurement as provided
for in section 39-1-27.8, as complementary
but distinct activities that have as common purpose
meeting electrical and natural gas energy
needs in
environmentally responsible.
(a) The commission
shall establish not later than June 1, 2008, standards for system
reliability and energy efficiency and conservation procurement,
which shall include standards and
guidelines for:
(1) System reliability
procurement, including but not limited to:
(i)
Procurement of energy supply from diverse sources, including, but not limited
to,
renewable energy resources as defined in chapter 26 of this
title;
(ii) Distributed
generation, including, but not limited to, renewable energy resources and
thermally leading combined heat and power systems, which is
reliable and is cost-effective, with
measurable, net system benefits;
(iii) Demand response,
including, but not limited to, distributed generation, back-up
generation and on-demand usage reduction, which shall be
designed to facilitate electric customer
participation in regional demand response programs, including those
administered by the
independent service operator of
system reliability benefits through load control or using
on-site generating capability;
(iv)
To effectuate the purposes of this division, the commission may
establish standards
and/or rates (A) for qualifying distributed generation,
demand response, and renewable energy
resources; (B) for net-metering; (C) for back-up power and/or
standby rates that reasonably
facilitate the development of distributed generation; and (D)
for such other matters as the
commission may find necessary or appropriate.
(2) Least-cost
procurement, which shall include procurement of energy efficiency and
energy conservation measures that are prudent and reliable
and when such measures are lower
cost than acquisition of additional supply, including
supply for periods of high demand.
(b) The standards and
guidelines provided for by subsection (a) shall be subject to
periodic review and as appropriate amendment by the
commission, which review will be
conducted not less frequently than every three (3) years after
the adoption of the standards and
guidelines.
(c) To implement the
provisions of this section:
(1) The commissioner of
the office of energy resources and the energy efficiency and
resources management council, either or jointly or separately,
shall provide the commission
findings and recommendations with regard to system reliability
and energy efficiency and
conservation procurement on or before March 1, 2008, and
triennially on or before March 1,
thereafter through March 1, 2017.
(2) The commission
shall issue standards not later than June 1, 2008, with regard to
plans for system reliability and energy efficiency and
conservation procurement, which standards
may be amended or revised by the commission as necessary
and/or appropriate.
(3) The energy efficiency
and resources management council shall prepare by July 15,
2008, a reliability and efficiency procurement
opportunity report which shall identify
opportunities to procure efficiency, distributed generation, demand
response and renewables,
which report shall be submitted to the electrical
distribution company, the commission, the office
of energy resources and the joint committee on energy.
(4) Each electrical and
natural gas distribution company shall submit to the commission
on or before September 1, 2008, and triennially on or
before September 1, thereafter through
September 1, 2017, a plan for system reliability and
energy efficiency and conservation
procurement. In developing the plan, the distribution company may
seek the advice of the
commissioner and the council. The plan shall include measurable
goals and target percentages for
each energy resource, pursuant to standards established by
the commission, including efficiency,
distributed generation, demand response, combined heat and power,
and renewables.
(5) The commission
shall issue an order approving all energy efficiency measures that
are cost effective and lower cost than acquisition of
additional supply, with regard to the plan
from the electrical and natural gas distribution company,
and reviewed and approved by the
energy efficiency and resources management council, and any
related annual plans, and shall
approve a fully reconciling funding mechanism to fund
investments in all efficiency measures
that are cost effective and lower cost than acquisition of
additional supply, not greater than sixty
(60) days after it is filed
with the commission.
(6)(i) Each electrical and natural gas distribution company
shall provide a status report,
which shall be public, on the implementation of least cost
procurement on or before December
15, 2008, and on or before February 1, 2009, to the
commission, the division, the commissioner
of the office of energy resources and the energy
efficiency and resources management council
which may provide the distribution company recommendations
with regard to effective
implementation of least cost procurement. The report shall include
the targets for each energy
resource included in the order approving the plan and the
achieved percentage for energy
resource, including the achieved percentages for efficiency,
distributed generation, demand
response, combined heat and power, and renewables.
(ii) Beginning on
November 1, 2012 or before, each electric distribution company shall
support the installation and investment in clean and
efficient combined heat and power
installations at commercial, institutional, municipal, and
industrial facilities. This support shall be
documented annually in the electric distribution company’s energy
efficiency program plans. In
order to effectuate this provision, the energy efficiency
and resource management council shall
seek input from the public, the gas and electric
distribution company, the economic development
corporation, and commercial and industrial users, and make
recommendations regarding services
to support the development of combined heat and power
installations in the electric distribution
company’s annual and triennial energy efficiency program plans.
(iii) The energy
efficiency annual plan shall include, but not be limited to, a plan for
identifying and recruiting qualified combined heat and power
projects, incentive levels, contract
terms and guidelines, and achievable megawatt targets for
investments in combined heat and
power systems. In the development of the plan, the energy
efficiency and resource management
council and the electric distribution company shall factor
into the combined heat and power plan
and program, the following criteria: (A) Economic
development benefits in
including direct and indirect job creation and retention from
investments in combined heat and
power systems; (B) Energy and cost savings for customers;
(C) Energy supply costs; (D)
Greenhouse gas emissions standards
and air quality benefits; and (E) System reliability benefits.
(iv)
The energy efficiency and resource management council shall
conduct at least one
public review meeting annually, to discuss and review the
combined heat and power program,
with at least seven (7) business day’s notice, prior to
the electric and gas distribution utility
submitting the plan to the commission. The commission shall
evaluate the submitted combined
heat and power program as part of the annual energy
efficiency plan. The commission shall issue
an order approving the energy efficiency plan and
programs within sixty (60) days of the filing.
(d) If the commission
shall determine that the implementation of system reliability and
energy efficiency and conservation procurement has caused or
is likely to cause under or over-
recovery of overhead and fixed costs of the company
implementing said procurement, the
commission may establish a mandatory rate adjustment clause for
the company so affected in
order to provide for full recovery of reasonable and
prudent overhead and fixed costs.
(e) The commission
shall conduct a contested case proceeding to establish a performance
based incentive plan which allows for additional
compensation for each electric distribution
company and each company providing gas to end-users and/or
retail customers based on the level
of its success in mitigating the cost and variability of
electric and gas services through
procurement portfolios.
SECTION 2. This act shall take effect upon passage.
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LC02253/SUB A/2
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