| Chapter 108 |
| 2023 -- S 0704 Enacted 06/19/2023 |
| A N A C T |
| RELATING TO PUBLIC UTILITIES AND CARRIERS -- PUBLIC UTILITIES COMMISSION |
Introduced By: Senator V. Susan Sosnowski |
| Date Introduced: March 22, 2023 |
| It is enacted by the General Assembly as follows: |
| SECTION 1. Section 39-1-27.7.1 of the General Laws in Chapter 39-1 entitled "Public |
| Utilities Commission" is hereby amended to read as follows: |
| 39-1-27.7.1. Revenue decoupling. |
| (a) The general assembly finds and declares that electricity and gas revenues shall be fully |
| decoupled from sales pursuant to the provisions of this chapter and further finds and declares that |
| any decoupling proposal submitted by an electric distribution company as defined in § 39-1- |
| 2(a)(12) or gas distribution company included as a public utility in § 39-1-2(a)(20) that has greater |
| than one hundred thousand (100,000) customers, shall be for the following purposes: |
| (1) Increasing efficiency in the operations and management of the electric and gas |
| distribution system; |
| (2) Achieving the goals established in the electric distribution company’s plan for system |
| reliability and energy efficiency and conservation procurement as required pursuant to § 39-1- |
| 27.7(d); |
| (3) Increasing investment in least-cost resources that will reduce long-term electricity |
| demand; |
| (4) Reducing risks for both customers and the distribution company including, but not |
| limited to, societal risks, weather risks, and economic risks; |
| (5) Increasing investment in end-use energy efficiency; |
| (6) Eliminating disincentives to support energy-efficiency programs; |
| (7) Facilitating and encouraging investment in utility infrastructure, safety, and reliability; |
| and |
| (8) Considering the reduction of fixed, recurring customer charges and transition to |
| increased unit charges that more accurately reflect the long-term costs of energy production and |
| delivery. |
| (b) Each electric distribution company as defined by § 39-1-2(a)(12) and gas distribution |
| company included as a public utility in § 39-1-2(a)(20) having greater than one hundred thousand |
| (100,000) customers shall file proposals at the commission to implement the policy set forth in |
| subsection (a) of this section. The commission shall approve these proposals, provided they contain |
| the features and components set forth in subsection (c) of this section, and that they are consistent |
| with the intent and objectives contained in subsection (a) of this section. Actions taken by the |
| commission in the exercise of its ratemaking authority for electric and gas rate cases shall be within |
| the norm of industry standards and recognize the need to maintain the financial health of the |
| distribution company as a stand-alone entity in Rhode Island. |
| (c) The proposals shall contain the following features and components: |
| (1) A revenue decoupling reconciliation mechanism that reconciles annually the revenue |
| requirement allowed in the company’s base distribution-rate case to revenues actually received for |
| the applicable twelve-month (12) period; provided that the mechanism for gas distribution shall be |
| determined on a revenue-per-customer basis, in a manner typically employed for gas distribution |
| companies in the industry. Any revenues over-recovered or under-recovered shall be credited to, |
| or recovered from, customers, as applicable; and |
| (2) An annual infrastructure, safety, and reliability spending plan for each fiscal year and |
| an annual rate-reconciliation mechanism that includes a reconcilable allowance for the anticipated |
| capital investments and other spending pursuant to the annual pre-approved budget as developed |
| in accordance with subsection (d) of this section. |
| (d) Prior to the beginning of each fiscal year, gas and electric distribution companies shall |
| consult with the division of public utilities and carriers regarding their infrastructure, safety, and |
| reliability spending plan for the following fiscal year, addressing the following categories: |
| (1) Capital spending on utility infrastructure; |
| (2) For electric distribution companies, operation and maintenance expenses on vegetation |
| management; |
| (3) For electric distribution companies, operation and maintenance expenses on system |
| inspection, including expenses from expected resulting repairs; and |
| (4) Any other costs relating to maintaining safety and reliability that are mutually agreed |
| upon by the division and the company. |
| The distribution company shall submit a plan to the division and the division shall |
| cooperate in good faith to reach an agreement on a proposed plan for these categories of costs for |
| the prospective fiscal year within sixty (60) days. To the extent that the company and the division |
| mutually agree on a plan, such plan shall be filed with the commission for review and approval |
| within ninety (90) days. If the company and the division cannot agree on a plan, the company shall |
| file a proposed plan with the commission and the commission shall review and, if the investments |
| and spending are found to be reasonably needed to maintain safe and reliable distribution service |
| over the short and long term, approve the plan within ninety (90) days. |
| (e) The commission shall have the following duties and powers, in addition to its existing |
| authorities established in this title: |
| (1) To maintain reasonable and adequate service-quality standards, after decoupling, that |
| are in effect at the time of the proposal and were established pursuant to § 39-3-7. |
| (2) The commission may exclude the low-income rate class from the revenue decoupling |
| reconciliation-rate mechanism for either electric or gas distribution. The commission also may |
| exclude customers in the large commercial and industrial rate class from the gas-distribution |
| mechanism. |
| (3) The commission may adopt performance incentives for the electric distribution |
| company that provide a shared-savings mechanism whereby the company would receive a |
| percentage of savings realized as a result of achieving the purposes of this section while the |
| remaining savings are credited to customers. |
| (4) The commission shall review and approve, with any necessary amendments, |
| performance-based, energy-savings targets developed and submitted by the Rhode Island energy |
| efficiency and resources management council. The performance-based targets shall also be used as |
| a consideration in any shared-savings mechanism established by the commission pursuant to |
| subsection (e)(3) of this section. |
| (f) The Rhode Island energy efficiency and resources management council shall propose |
| performance-based, energy-savings targets to the commission no later than September 1, 2010. The |
| targets shall include, but not be limited to, specific energy kilowatt-hour savings overall and peak- |
| demand savings for both summer and winter peak periods expressed in total megawatts as well as |
| appropriate targets recommended in the opportunities report filed with the commission pursuant to |
| § 39-1-27.7(d)(3). The council shall revise, as necessary, these targets on an annual basis prior to |
| the reconciliation process established pursuant to subsection (c) of this section and submit its |
| revisions to the commission for approval. |
| (g) Reporting. Every electric distribution company, as defined in subsection (a) of this |
| section, shall report to the governor, general assembly, division of public utilities and carriers, and |
| public utilities commission on or before September 1, 2012. The report shall include, but not be |
| limited to, the following elements: |
| (1) A comparison of revenues from traditional rate regulation and how the revenues have |
| differed as part of an approved decoupling structure; |
| (2) A summary of how the company is achieving the performance-based targets that may |
| have been adopted pursuant to subsection (e)(4) of this section; |
| (3) A summary of any shared savings the company may have received pursuant to the |
| performance incentives authorized in subsection (e)(3) of this section; |
| (4) A summary of how the company is achieving the service-quality standards required in |
| subsection (e)(1) of this section; |
| (5) An overview of how decoupling is impacting revenue stabilization goals that have |
| resulted from decoupling; and |
| (6) A summary of any customer education programs provided. |
| SECTION 2. This act shall take effect upon passage. |
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