2012 -- H 7799

=======

LC01848

=======

STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2012

____________

A N A C T

PUBLIC UTILITIES AND CARRIERS - - PUBLIC UTILITIES COMMISSION

     Introduced By: Representatives Handy, Marcello, Fellela, O`Neill, and Ruggiero

     Date Introduced: February 28, 2012

     Referred To: House Environment and Natural Resources

It is enacted by the General Assembly as follows:

1-1

     SECTION 1. Chapter 39-1 of the General Laws entitled "Public Utilities Commission" is

1-2

hereby amended by adding thereto the following section:

1-3

     39-1-27.13. On-bill repayment program for energy efficiency. -- (a) Definitions. - As

1-4

used in this section:

1-5

     (1) “Gas utility” means a natural gas distribution company included as a public utility in

1-6

subdivision 39-1-2(20) having greater than one hundred thousand (100,000) customers.

1-7

     (2) “Commission” means the Rhode Island public utilities commission.

1-8

     (b) Findings. - The general assembly finds that Rhode Island homes and businesses have

1-9

the potential to save energy through conservation and cost-effective energy efficiency measures.

1-10

Programs created pursuant to this section will allow utility customers to purchase cost-effective

1-11

energy efficiency measures with no required initial upfront payment, and to pay the cost of those

1-12

products and services over time on their utility bill.

1-13

     (c) On-bill energy efficiency loan program - (1) Notwithstanding any other provision of

1-14

this section, a gas utility on June 1, 2013 shall offer a commission-approved on-bill financing

1-15

program that allows its retail customers who own a residential single family home, duplex, or

1-16

other residential building with four (4) or less units, or condominium at which the gas service is

1-17

being provided.

1-18

     (i) To borrow funds of up to twenty-five thousand dollars ($25,000) per residential

1-19

housing unit from a third-party lender in order to purchase gas energy efficiency measures

1-20

approved under the program for installation in such home or condominium without any required

2-1

upfront payment; and

2-2

     (ii) To pay back such funds over time through the gas utility's bill.

2-3

     (2) Program development. - Within ninety (90) days after the effective date of this

2-4

section, the office of energy resources in coordination with the energy efficiency and resource

2-5

management council shall hold public hearings during which interested participants may discuss

2-6

issues related to the program, including program design, eligible gas energy efficiency measures,

2-7

vendor qualifications, and a methodology for ensuring ongoing compliance with such

2-8

qualifications, financing, sample documents such as request for proposals contracts and

2-9

agreements, dispute resolution, pre-installment and post-installment verification, and evaluation.

2-10

The workshop process shall be completed within ninety (90) days of the effective date of this

2-11

section.

2-12

     (3) Not later than ninety (90) days following completion of the public hearings, each gas

2-13

utility shall submit a proposed program to the commission that contains:

2-14

     (i) A list of recommended gas energy efficiency measures that will be eligible for on-bill

2-15

financing. An eligible gas energy efficiency measure ("measure") shall be defined by the

2-16

following:

2-17

     (A) The measure would be applied to or replace gas energy-using equipment; and

2-18

     (B) Application of the measure to equipment and systems will have estimated gas savings

2-19

(determined by rates in effect at the time of purchase), that are sufficient to cover the customer’s

2-20

costs of implementing the measures, including finance charges and any program fees not

2-21

recovered pursuant to this section over a fifteen (15) year period or the life of the equipment and

2-22

systems, whichever is shorter.

2-23

     (ii) Guidelines for financing of measures installed under a program, including, but not

2-24

limited to, request for proposals (RFP) criteria and limits on both individual loan amounts and the

2-25

duration of the loans;

2-26

     (iii) Criteria and standards for identifying and approving measures;

2-27

     (iv) Qualifications of vendors that will market or install measures, as well as a

2-28

methodology for ensuring ongoing compliance with such qualifications;

2-29

     (v) Sample contracts and agreements necessary to implement the measures and program;

2-30

(vi) The types of data and information that utilities and vendors participating in the

2-31

program shall collect for purposes of preparing the reports required under subsection (13) of this

2-32

section; and

2-33

     (vii) The proposed program submitted by each gas utility shall be consistent with the

2-34

provisions of this section that define operational, financial, and billing arrangements between and

3-1

among program participants, vendors, lenders, and the gas utility.

3-2

     (4) After receiving a request from the gas utility for approval of a proposed program and

3-3

tariffs pursuant to this section, the commission shall render its decision within one hundred

3-4

twenty (120) days. If no decision is rendered within one hundred twenty (120) days, then the

3-5

request shall be deemed to be approved.

3-6

     (5) Upon approval of the program by the commission a gas utility shall issue a request for

3-7

proposals ("RFP") to lenders for purposes of providing financing to participants to pay for

3-8

approved measures. The RFP criteria shall include, but not be limited to, the interest rate,

3-9

origination fees, and credit terms. The utility shall select the winning bidders based on its

3-10

evaluation of these criteria, with a preference for those bids containing the rates, fees, and terms

3-11

most favorable to participants.

3-12

     (6) The gas utility shall work with the lenders selected pursuant to the RFP process, and

3-13

with vendors, to establish the terms and processes pursuant to which a participant can purchase

3-14

eligible gas energy efficiency measures using the financing obtained from the lender. The vendor

3-15

shall explain and offer the approved financing packaging to those customers identified in this

3-16

section and shall assist customers in applying for financing. As part of such process, vendors shall

3-17

also provide to participants information about any other incentives that may be available for the

3-18

measures.

3-19

     (7) The lender may conduct credit checks or undertake other appropriate measures to

3-20

limit credit risk, and shall review and have the right to approve or deny financing applications

3-21

submitted by customers identified in this section. Following the lender's approval of financing

3-22

and the participant's purchase of the measure or measures, the lender shall forward payment

3-23

information to the gas utility, and the utility shall add as a separate line item on the participant's

3-24

utility bill a charge showing the amount due under the program each month.

3-25

     (8) A loan issued to a participant pursuant to the program shall be the sole responsibility

3-26

of the participant, and any dispute that may arise concerning the loan's terms, conditions, or

3-27

charges shall be resolved between the participant and lender. Upon transfer of the property title

3-28

for the premises at which the participant receives gas service from the utility or the participant's

3-29

request to terminate service at such premises, the participant shall pay in full its gas utility bill,

3-30

including all amounts due under the program. Amounts due under the program shall be deemed

3-31

amounts owed for residential gas service.

3-32

     (9) The gas utility shall remit payment in full to the lender each month on behalf of the

3-33

participant. In the event a participant defaults on payment of its gas utility bill, the gas utility shall

3-34

continue to remit all payments due under the program to the lender. In addition, the gas utility

4-1

shall retain a security interest in the measure or measures purchased under the program, and the

4-2

utility retains its right to disconnect a participant that defaults on the payment of its utility bill.

4-3

     (10) Each year the PUC shall determine a reasonable fee to be paid to the electric

4-4

distribution company for the cost of administering the program, such fee to be comparable to

4-5

commercial rates for administering a bookkeeping program, and in any case not to exceed one

4-6

hundred ten percent (110%) of the electric distribution company’s actual expenses, as

4-7

demonstrated to the PUC in evidentiary hearings.

4-8

     (11) The total outstanding amount financed under the program shall not exceed two

4-9

million five hundred thousand dollars ($2,500,000) for a gas utility or gas utilities under a single

4-10

holding company, provided that the gas utility or gas utilities may petition the commission for an

4-11

increase in such amount.

4-12

     (12) A gas utility shall recover all of the prudently incurred costs of offering a program

4-13

approved by the commission pursuant to this section, including, but not limited to, all start-up and

4-14

administrative costs and the costs for program evaluation.

4-15

     (13) An independent evaluation of a program shall be conducted after three (3) years of

4-16

the program's operation. The gas utility shall retain an independent evaluator who shall evaluate

4-17

the effects of the measures installed under the program and the overall operation of the program,

4-18

including, but not limited to, customer eligibility criteria and whether the payment obligation for

4-19

permanent gas energy efficiency measures that will continue to provide benefits of energy

4-20

savings should attach to the meter location. As part of the evaluation process, the evaluator shall

4-21

also solicit feedback from participants and interested stakeholders. The evaluator shall issue a

4-22

report to the commission on its findings no later than four (4) years after the date on which the

4-23

program commenced, and the commission shall issue a report to the governor and general

4-24

assembly including a summary of the information described in this section as well as its

4-25

recommendations as to whether the program should be discontinued, continued with modification

4-26

or modifications or continued without modification, provided that any recommended

4-27

modifications shall only apply prospectively and to measures not yet installed or financed.

4-28

     SECTION 2. This act shall take effect upon passage.

=======

LC01848

=======

EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N A C T

PUBLIC UTILITIES AND CARRIERS - - PUBLIC UTILITIES COMMISSION

***

5-1

     This act would create a program to allow utility customers to buy cost-effective energy

5-2

efficiency measures whereby payments can be made over time on the customer’s utility bill.

5-3

     This act would take effective upon passage.

=======

LC01848

=======