| Chapter 404 |
| 2024 -- H 7811 AS AMENDED Enacted 06/26/2024 |
| A N A C T |
| RELATING TO PUBLIC UTILITIES AND CARRIERS -- 2024 ENERGY STORAGE ACT |
Introduced By: Representatives Handy, Fogarty, Cortvriend, Ajello, Tanzi, Kislak, Shanley, Batista, McEntee, and Felix |
| Date Introduced: March 01, 2024 |
| It is enacted by the General Assembly as follows: |
| SECTION 1. Legislative findings and purpose. |
| The general assembly hereby finds that: |
| (1) An energy storage system connected to the electric power system could alleviate time |
| and location-based constraints on the distribution and bulk power systems, including physical, |
| economic, and environmental constraints, and result in lower costs to the general body of ratepayers |
| if located in the right place and operated at the right time. |
| (2) Currently, Rhode Island does not have an interconnection tariff that recognizes the |
| potential flexibility and dispatchability of energy storage systems. |
| (3) The public utilities commission should advance frameworks that would promote |
| advancement of grid connected energy storage systems when those systems can provide net value |
| to the general body of ratepayers. |
| (4) In order to secure a long-term, stable, and affordable supply of energy storage systems, |
| it is essential that Rhode Island begin procuring and deploying energy storage systems as an |
| alternative to costly and redundant utility distribution infrastructure. |
| SECTION 2. Title 39 of the General Laws entitled "PUBLIC UTILITIES AND |
| CARRIERS" is hereby amended by adding thereto the following chapter: |
| CHAPTER 33 |
| ENERGY STORAGE SYSTEMS ACT |
| 39-33-1. Definitions. |
| As used in this chapter: |
| (1) "Commission" means the public utilities commission. |
| (2) "Energy storage system" means any technology capable of converting electrical energy |
| to some form of stored energy for reconversion to electrical energy at a later time. |
| (3) "Long-duration energy storage system" means energy storage systems that are capable |
| of permanently displacing fossil fuel energy systems designed to store energy or necessary for |
| balancing intermittent renewable energy resources. |
| 39-33-2. Storage tariff. |
| No later than September 1, 2024, the public utilities commission shall engage stakeholders |
| to adopt a framework for an energy storage system tariff for energy storage systems connected to |
| the electric distribution system. |
| (1) The tariff framework should, at a minimum, address the ability of energy storage |
| systems to charge from and discharge to the electric distribution system. |
| (2) The commission shall set a schedule that is designed to result in a model tariff no later |
| than May 1, 2025, consistent with the tariff framework. |
| (3) Following that date, if the commission finds that the energy storage system tariff can |
| be implemented without inequitable cross subsidization between customers, each electric |
| distribution company as defined in § 39-1-2 that has greater than one hundred thousand (100,000) |
| customers shall file the model tariff for review and approval by the public utilities commission in |
| a contested proceeding. Otherwise, the model tariff shall be included as part of the electric |
| distribution company’s next general rate filing. |
| 39-33-3. Interconnection. |
| (a) No later than September 1, 2024, the commission shall commence a process, which |
| includes stakeholder engagement, to adopt a framework for an interconnection tariff for energy |
| storage systems connected to the electric distribution system that recognizes the flexible operating |
| characteristics of energy storage systems. |
| (b) Following the public utilities commission’s adoption of a framework, which shall be |
| completed no later than May 1, 2025, each electric distribution company as defined in § 39-1-2 that |
| has greater than one hundred thousand (100,000) customers shall file a proposed energy storage |
| system interconnection tariff for review and approval in a contested proceeding. |
| 39-33-4. Periodic storage assessment and procurement. |
| (a) Not less than every three (3) years, the commission shall conduct a market survey to |
| assess the capabilities of storage technologies and whether those capabilities have the potential to |
| meet the needs of, or provide net value to, the distribution system or the bulk power system. |
| (1) As part of its review, the commission shall consider time and location-based constraints |
| on the distribution and bulk power systems, including physical, economic, and environmental |
| constraints that increase costs to the general body of ratepayers. |
| (2) Transmission level storage, at a minimum, shall include long-duration energy storage |
| systems and short-duration energy storage systems that have peaking capabilities, but may include |
| other applications. |
| (b) upon Upon a finding by the commission that storage may meet distribution system or |
| bulk power system needs, or provide net value to the general body of ratepayers, the commission |
| shall direct the electric distribution company with more than one hundred thousand (100,000) |
| customers to conduct a procurement of transmission level or distribution level storage consistent |
| with subsection (c) of this section. This review shall also consider whether any changes need to be |
| made to previously approved storage procurement methods to meet the targets and may be |
| conducted as part of the review of system reliability and procurement in § 39-1-27.7(b). The |
| commission’s findings about appropriate targets and procurement shall be consistent with its least |
| cost procurement standards and that the approved procurement is cost effective, less than the cost |
| of available supply, reliable, prudent, and environmentally responsible. |
| (c) The electric distribution company shall issue and, subject to review and approval of the |
| commission, select a reasonable, open, and competitive method of soliciting proposals from third |
| parties for one or more services from energy storage projects connected to the transmission or |
| distribution system in front of the meter, including, but not limited to, long-duration energy storage |
| projects, that would achieve the goals in this chapter33of title 39. |
| 39-33-5. Administrative expense. |
| The commission is authorized to hire one or more consultants to assist with each task set |
| forth in this chapter and may assess its actual costs to each electric distribution company as defined |
| in § 39-1-2 that has greater than one hundred thousand (100,000) customers in a manner to be |
| determined by the commission. |
| SECTION 3. Section 39-26.1-4 of the General Laws in Chapter 39-26.1 entitled "Long- |
| Term Contracting Standard for Renewable Energy" is hereby amended to read as follows: |
| 39-26.1-4. Financial remuneration and incentives. |
| In order to achieve the purposes of this chapter, electric distribution companies shall be |
| entitled to financial remuneration and incentives for long-term contracts for newly developed |
| renewable energy resources, which are over and above the base rate revenue requirement |
| established in its cost of service for distribution ratemaking. Such remuneration and incentives shall |
| compensate the electric distribution company for accepting the financial obligation of the long- |
| term contracts. The financial remuneration and incentives described in this section shall apply only |
| to long-term contracts for newly developed renewable energy resources. For long-term contracts |
| approved pursuant to this chapter before January 1, 2022, the financial remuneration and incentives |
| shall be in the form of annual compensation, equal to two and three quarters percent (2.75%) of the |
| actual annual payments made under the contracts for those projects that are commercially |
| operating, unless determined otherwise by the commission at the time of approval. For long-term |
| contracts approved pursuant to this chapter on or after January 1, 2022, including contracts above |
| the minimum long-term contract capacity, the financial remuneration and incentives shall be in the |
| form of annual compensation up to one percent (1.0%) of the actual annual payments made under |
| the contracts through December 31, 2026, for those projects that are commercially operating. For |
| all long-term contracts approved pursuant to this chapter on or after January 1, 2027, financial |
| remuneration and incentives shall not be applied, unless otherwise granted by the commission. For |
| any calendar year in which the electric distribution company’s actual return on equity exceeds the |
| return on equity allowed by the commission in the electric distribution company’s last general rate |
| case, the commission shall have the authority to adjust any or all remuneration paid to the electric |
| distribution company pursuant to this section in order to assure that such remuneration does not |
| result in or contribute toward the electric distribution company earning above its allowed return for |
| such calendar year. |
| SECTION 4. Chapter 39-26.1 of the General Laws entitled "Long-Term Contracting |
| Standard for Renewable Energy" is hereby amended by adding thereto the following section: |
| 39-26.1-10. Energy storage programs. |
| (a) The general assembly finds that while the commission develops new energy market |
| rules for the use of energy storage systems, it is in the public interest to support the deployment of |
| the following energy storage capacity: |
| (1) Ninety megawatts (90 MW) by December 31, 2026; |
| (2) One hundred ninety-five megawatts (195 MW) by December 31, 2028; |
| (3) Six hundred megawatts (600 mwMW) by December 31, 2033; and |
| (4) Subsequent targets may be proposed and set pursuant to chapter 31 of title 39. |
| (b) The Rhode Island infrastructure bank, in consultation with the office of energy |
| resources, shall develop one or more programs and shall distribute funds made available pursuant |
| to this chapter to meet the goals established in subsection (a) of this section. |
| (c) The Rhode Island infrastructure bank may take in funds from the following sources in |
| support of this program: |
| (1) Money appropriated in the state budget to the fund or otherwise made available to the |
| infrastructure bank; |
| (2) Money made available to the fund through federal programs or private contributions; |
| (3) Application or other fees paid to the infrastructure bank to process applications; and |
| (4) Any other money made available to the bank. |
| (d) The program(s) shall establish supplemental funding efforts to support the deployment |
| of energy storage systems for: |
| (1) Residential classes of electric customers; |
| (2) Low-income residential classes of electric customers; |
| (3) Commercial and residential classes of electric customers; and |
| (4) Energy storage systems connected to the distribution or transmission system in front of |
| the meter and not associated with a customer’s electric load. |
| (e) The program shall provide for grants, no-interest loans, and low-interest loans to |
| support: |
| (1) The co-locate energy storage systems with distributed energy resources; or |
| (2) Energy storage systems that would allow for the interconnection of distributed energy |
| resources without distribution system upgrade costs. |
| (f) Any local distribution company that serves greater than one hundred thousand (100,000) |
| customers shall not be eligible for the financial support described in this section. |
| (g) The infrastructure bank shall have the authority to adopt, amend, and implement such |
| rules and regulations as may be necessary and desirable to effectuate the purposes of this section. |
| SECTION 5. This act shall take effect upon passage. |
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