2024 -- H 7285

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LC004070

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

____________

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- UTILITY THERMAL ENERGY

NETWORK AND JOBS ACT

     Introduced By: Representatives Cortvriend, McGaw, Carson, Handy, Kislak, Boylan,
Spears, Fogarty, Edwards, and Knight

     Date Introduced: January 26, 2024

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Title 39 of the General Laws entitled "PUBLIC UTILITIES AND

CARRIERS" is hereby amended by adding thereto the following chapter:

CHAPTER 33

UTILITY THERMAL ENERGY NETWORK AND JOBS ACT

     39-33-1. Short title.

     This act shall be known and may be cited as the “Utility Thermal Energy Network and Jobs

Act”.

     39-33-2. Thermal energy networks.

     (a) The general assembly finds and declares that thermal energy networks are essential

infrastructure in meeting the just transition, equity, and decarbonization requirements of chapter

6.2 of title 42 ("act on climate") and further finds and declares that:

     (1) To the extent feasible, the public utility company that provides electric distribution as

defined in § 39-1-2(a)(12), as well as natural gas as defined in § 39-1-2(a)(17) shall maximize cost-

effective investments in thermal energy networks when it is in the public interest;

     (2) The public utilities commission shall exercise its authority to implement the provisions

of this chapter and, to the extent feasible, support the implementation of thermal energy networks,

pursuant to chapter 6.2 of title 42 (Act on Climate).

     (b) Within one year of the effective date of this chapter, the public utilities commission

shall initiate a proceeding to support the development of thermal energy networks for the purpose

of meeting the greenhouse gas emissions, just transition, and equity goals of chapter 6.2 of title 42.

The matters the commission shall consider in such proceeding shall include, but shall not be limited

to, the appropriate ownership, market, cost-effectiveness, and rate structures for thermal energy

networks and whether the provision of thermal energy services by gas and/or electric utilities is in

the public interest.

     (1) The commission shall promulgate rules and regulations within two (2) years to:

     (i) Create fair market access rules for utility-owned thermal energy networks to accept

thermal energy that aligns with the climate justice, just transition, and greenhouse gas emissions

reductions requirements of chapter 6.2 of title 42 and that does not increase greenhouse gas

emissions or co-pollutants;

     (ii) Exempt small-scale thermal energy networks not owned by utilities from commission

regulation;

     (iii) Promote the training and transition of utility workers impacted by this chapter; and

     (iv) Encourage third party participation and competition where it will maximize benefits

to customers; and

     (v) Establish equitable rules for cost recovery by utilities for thermal energy networks.

     (2) In establishing rules and regulations for thermal energy networks, the commission shall

convene a stakeholder advisory committee composed of technical experts, members with relevant

engineering expertise, and public members or entities who will be significantly impacted by the

expansion of thermal energy networks. The advisory committee shall be consulted on a range of

questions developed by the commission to support the regulation of thermal energy networks.

     39-33-3. Thermal energy network infrastructure plans.

     (a) No later than September 1, 2026, and every three (3) years thereafter, the public utility

company shall issue a plan over a three (3) year period for cost-effective investments in thermal

energy network infrastructure to assist in the just transition to a clean, affordable, and reliable

distribution system in a cost-effective manner. To the extent feasible, the plan shall ensure that at

least forty- percent (40%) of its investments benefit environmental justice communities. The plan

shall be in compliance with the regulations set forth in § 39-33-2 and each decision made within

the plan shall be justified by the public utility company.

     (b) The public utility company shall propose the plan to the public utilities commission in

a filing for review and approval within ninety (90) days. The commission shall determine whether

it is in the public interest to approve or modify such thermal energy network plans and shall issue

an order directing the public utility company to implement such proposed or modified thermal

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energy network plans. If the public utility company fails to show justification behind any decisions

made within the plan, the commission shall order the public utility company to clarify or modify

any outstanding decisions in compliance with the requirements of this chapter.

     39-33-4. Thermal energy pilot projects.

     (a) Within three (3) months of the effective date of this chapter, the public utility company

that provides electric distribution as defined in § 39-1-2(a)(12), as well as natural gas as defined in

§ 39-1-2(a)(17) shall initiate a process to support the development of thermal energy networks for

the purpose of meeting the greenhouse gas emissions and just transition goals of chapter 6.2 of title

42. The matters considered by the public utility company shall be to determine the feasibility of

constructing at least three (3) and up to five (5) thermal energy network pilot projects. The public

utility company may use outside engineering experts to provide technical expertise on studying

feasibility if it deems outside experts will provide expertise beyond the knowledge and capacity of

current employees. The public utility company shall not seek recovery through any cost recovery

mechanism of the incremental costs associated with studying the feasibility of thermal energy

networks, and will hold customers harmless from those incremental costs.

     (1) Considerations when determining such feasibility shall include, but shall not be limited

to:

     (i) Greenhouse gas emissions reductions;

     (ii) A cost-effective analysis that includes measures that are projected to generate energy

cost savings and avoided social cost of carbon dioxide equal to or greater than overnight capital

costs and operations and maintenance costs over the useful life of the equipment;

     (iii) Engineering and design requirements;

     (iv) Operations and maintenance requirements;

     (v) Ownership of buildings receiving benefits from thermal energy networks and/or entities

responsible for facilities receiving benefits from thermal energy networks; and

     (vi) Communities receiving the greatest benefits from reduced air pollution and improved

air quality.

     (2) In meeting the requirements of this section, the public utility company shall develop an

initial list of locations to study the feasibility of constructing pilot thermal energy networks. Those

locations shall be diverse in geography, customer class, and average annual consumption of thermal

energy. The initial list shall include, but not be limited to:

     (i) The port of Providence and neighboring communities;

     (ii) Residential buildings, hospitals, and healthcare facilities located in lower South

Providence;

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     (iii) Facilities within the jurisdiction of the Rhode Island Convention Center Authority;

     (iv) Facilities within the jurisdiction of the Quonset Development Corporation;

     (v) University of Rhode Island;

     (vi) Aquidneck Island; and

     (vii) The Port of Galilee.

     (3) The public utility company is authorized to negotiate directly with relevant entities that

oversee facilities under consideration by the public utility company to construct pilot thermal

energy networks. Negotiations may include, but not be limited to, contract terms, equitable

financing agreements, oversight, design, and engineering. The public utility company is hereby

authorized and directed to maximize federal funding and financing opportunities through the

Inflation Reduction Act, the Infrastructure Investment and Jobs Act, as well as state funding and

financing opportunities. At least one pilot project shall be proposed in an environmental justice

focus area, as defined by the department of environmental management.

     (4) Upon making a final determination of locations that meet the feasibility requirements

in § 39-33-2(a)(1), the public utility company shall develop a final list and submit in a public filing

to the public utilities commission for review and approval at least three (3) and up to five (5)

proposed pilot thermal energy network projects within nine (9) months of the effective date of this

chapter. The pilot project proposals shall include specific customer protection plans and shall be

made publicly available on the commission's website and shall be subject to a public comment

period of no less than thirty (30) days.

     (b)(1) Upon receiving the filing from the public utility company, the public utility

commission shall review and consider for approval the list of proposed pilot thermal energy

network projects. The public utility commission is authorized to conditionally approve any pilot

thermal energy network projects proposed by the public utility company. If the public utility

company determines through its negotiations with relevant entities that it is unable to meet the

requirements of this chapter, the commission shall have the authority to evaluate and rule on any

outstanding terms in dispute, and order the public utility company to proceed with constructing the

pilot thermal energy networks. The commission shall determine whether it is in the public interest

to approve or modify such pilot thermal energy network projects and shall issue an order directing

the public utility company to implement such proposed or modified pilot thermal energy network

projects.

     (2) In considering whether pilot thermal energy network projects are in the public interest,

the commission shall consider whether the pilot project will develop information useful for the

commission's promulgation of rules and regulations governing thermal energy networks, whether

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the pilot project furthers the climate justice and/or emissions reduction mandates of chapter 6.2 of

title 42, whether the pilot project advances financial and technical approaches to equitable and

affordable building electrification, and whether the pilot project creates benefits to customers and

society at large, including, but not limited to, public health benefits in areas with disproportionate

environmental or public health burdens, job retention and creation, reliability, and increased

affordability of renewable thermal energy options.

     (3) The public utility company shall proceed with construction of pilot thermal energy

networks within six (6) months of final approval of the public utility commission.

     (c) The public utility company shall report to the commission, on a quarterly basis, and

until completion of the pilot thermal energy network project as determined by the commission, the

status of each pilot thermal energy network project. The commission shall post and make publicly

available such reports on its website. The report shall include, but not be limited to the:

     (1) The stage of development of each pilot project;

     (2) Barriers to development;

     (3) Number of customers served;

     (4) Costs of the pilot project;

     (5) Number of jobs retained or created by the pilot project; and

     (6) Any other such information the commission deems to be in the public interest.

     39-33-5. Just transition standards.

     (a) Any thermal energy network created under this section shall demonstrate that the public

utility company has entered into a labor peace agreement with a bona fide labor organization of

jurisdiction that is actively engaged in representing gas and electric company employees. The labor

peace agreement shall apply to the employees necessary for the maintenance and operation of such

thermal energy network. The labor peace agreement shall be an ongoing material condition of

authorization to maintain and operate such thermal energy networks. The employees eligible for

these positions shall first be selected from and offered to a pool of transitioning utility workers who

have lost, or are at risk of losing, their employment with a utility downsizing its gas transmission

and distribution system. Such a list of potential employees shall be provided by affected unions and

provided to the department of labor and training. The department of labor and training shall update

and provide such list to the public utility company ninety (90) days prior to purchase, acquisition,

and/or construction of any thermal energy network created under this section.

     (b) As part of any agreement with a public entity to construct a thermal energy network

project that enters or crosses a public right-of-way, as defined in § 39-1-2, the public utility

company shall:

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     (1) For projects valued over twenty-five million dollars ($25,000,000), the public utility

company shall conduct an independent, objective, reasoned study, using reviewable criteria, to

determine whether adoption of a project labor agreement on the proposed project or projects will

help achieve the goals of the state purchases act.

     (2) For projects of one million dollars ($1,000,000) or greater, the public utility company

shall require contractors on the project to participate in a non-provisionally approved

apprenticeship program for all apprenticeable crafts or trades that will be employed on the project,

and shall employ registered apprentices to perform fifteen percent (15%) of the total labor hours.

     (3) For projects in excess of ten million dollars ($10,000,000), all construction workers

shall be paid in accordance with the wages and benefits required pursuant to chapter 13 of title 37

with all contractors and subcontractors required to file certified payrolls, which shall be considered

public records, on a monthly basis for all work completed in the preceding month on a uniform

form prescribed by the department of labor and training. Failure to follow the requirements pursuant

to chapter 13 of title 37 shall constitute a material violation and a material breach of the agreement

with the state.

     (4) The public utility company shall take all necessary actions to ensure that each contractor

and subcontractor involved in the construction of the project completes a sworn certification that

the prime contractor, general contractor, or subcontractor:

     (i) Has the necessary resources to perform the portion of the covered project to which the

contractor or subcontractor is assigned, including the necessary technical, financial, and personnel

resources;

     (ii) Has all required contractor, specialty contractor or trade licenses, certifications or

certificates required of any business entity or individual by applicable state or local law;

     (iii) May participate in apprenticeship programs pursuant to 29 C.F.R. Part 29 and Part 30

for the occupations the contractor will employ for its awarded scope of work on the covered project;

     (iv) Pursuant to § 39-33-3(b)(2), ensure that no less than fifteen percent (15%) of the labor

hours worked on the project shall be performed by registered apprentices for all crafts or trades

with approved apprenticeship programs that will be employed on the project;

     (v) During the previous three (3) years:

     (A) Has not been debarred by any government agency;

     (B) Has not defaulted on any project;

     (C) Has not had any license, certification, or other credential relating to the business

revoked or suspended; and

     (D) Has not been found in violation of any law applicable to the contractor’s or

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subcontractor’s business that resulted in the payment of a fine, back pay damages, or any other type

of penalty in the amount of five thousand dollars ($5,000) or more.

     (5) Piping during new thermal energy network construction shall be undertaken by

journeyperson pipefitters or journeyperson pipefitter apprentices, as defined in § 28-27-4.2.

     (c) The department of labor and training shall promulgate such rules and regulations as are

necessary to implement the enforcement of this chapter.

     39-33-6. Severability.

     If any provision of this chapter or the application thereof to any person or circumstances is

held invalid, such invalidity shall not affect other provisions or applications of the chapter, which

can be given effect without the invalid provision or application, and to this end the provisions of

this chapter are declared to be severable.

     SECTION 2. Sections 39-1-1, 39-1-2 and 39-1-3 of the General Laws in Chapter 39-1

entitled "Public Utilities Commission" are hereby amended to read as follows:

     39-1-1. Declaration of policy — Purposes.

     (a) The general assembly finds and therefore declares that:

     (1) The businesses of distributing electrical energy, producing and transporting

manufactured and natural gas, thermal energy, operating water works and thermal energy networks,

furnishing supplies of water for domestic, industrial, and commercial use, offering to the public

transportation of persons and property, furnishing and servicing telephonic and wireless audio and

visual communication systems, and operation of community antenna television systems are

affected with a public interest;

     (2) Supervision and reasonable regulation by the state of the manner in which the

businesses construct their systems and carry on their operations within the state are necessary to

protect and promote the convenience, health, comfort, safety, accommodation, and welfare of the

people, and are a proper exercise of the police power of the state; and

     (3) Preservation of the state’s resources, commerce, and industry requires the assurance of

adequate public transportation and communication facilities, water supplies, and an abundance of

energy, all supplied to the people with reliability, at economical cost, and with due regard for the

preservation and enhancement of the environment, the conservation of natural resources, including

scenic, historic, and recreational assets, and the strengthening of long-range, land-use planning.

     (b) It is hereby declared to be the policy of the state to provide fair regulation of public

utilities and carriers in the interest of the public, to promote availability of adequate, efficient, and

economical energy, communication, and transportation services and water supplies to the

inhabitants of the state, to provide just and reasonable rates and charges for such services and

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supplies, without unjust discrimination, undue preferences or advantages, or unfair or destructive

competitive practices, and to cooperate with other states and agencies of the federal government in

promoting and coordinating efforts to achieve realization of this policy.

     (c) To this end, there is hereby vested in the public utilities commission and the division of

public utilities and carriers the exclusive power and authority to supervise, regulate, and make

orders governing the conduct of companies offering to the public in intrastate commerce energy,

communication, and transportation services and water supplies for the purpose of increasing and

maintaining the efficiency of the companies, according desirable safeguards and convenience to

their employees and to the public, and protecting them and the public against improper and

unreasonable rates, tolls, and charges by providing full, fair, and adequate administrative

procedures and remedies, and by securing a judicial review to any party aggrieved by such an

administrative proceeding or ruling.

     (d) The legislature also finds and declares, as of 1996, the following:

     (1) That lower retail electricity rates would promote the state’s economy and the health and

general welfare of the citizens of Rhode Island;

     (2) That current research and experience indicates that greater competition in the electricity

industry would result in a decrease in electricity rates over time;

     (3) That greater competition in the electricity industry would stimulate economic growth;

     (4) That it is in the public interest to promote competition in the electricity industry and to

establish performance-based ratemaking for regulated utilities;

     (5) That in connection with the transition to a more competitive electric utility industry,

public utilities should have a reasonable opportunity to recover transitional costs associated with

commitments prudently incurred in the past pursuant to their legal obligations to provide reliable

electric service at reasonable costs;

     (6) That it shall be the policy of the state to encourage, through all feasible means and

measures, states where fossil-fueled, electric-generating units producing air emissions affecting

Rhode Island air quality are located to reduce such emissions over time to levels that enable cost-

effective attainment of environmental standards within Rhode Island; and

     (7) That in a restructured electrical industry the same protections currently afforded to low-

income customers shall continue.

     (e) The legislature further finds and declares as of 2006:

     (1) That prices of energy, including especially fossil-fuels and electricity, are rising faster

than the cost of living and are subject to sharp fluctuations, which conditions create hardships for

many households, institutions, organizations, and businesses in the state;

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     (2) That while utility restructuring has brought some benefits, notably in transmission and

distribution costs and more efficient use of generating capacities, it has not resulted in competitive

markets for residential and small commercial-industrial customers, lower overall prices, or greater

diversification of energy resources used for electrical generation;

     (3) That the state’s economy and the health and general welfare of the people of Rhode

Island benefit when energy supplies are reliable and least-cost; and

     (4) That it is a necessary move beyond basic utility restructuring in order to secure for

Rhode Island, to the maximum extent reasonably feasible, the benefits of reasonable and stable

rates, least-cost procurement, and system reliability that includes energy resource diversification,

distributed generation, and load management.

     39-1-2. Definitions.

     (a) Terms used in this title shall be construed as follows, unless another meaning is

expressed or is clearly apparent from the language or context:

     (1) “Administrator” means the administrator of the division of public utilities and carriers.

     (2) “Airport” and “landing field” mean and include all airports and landing fields other

than those owned by the state.

     (3) “Chairperson” means the chairperson of the public utilities commission.

     (4) “Charter carrier” means and includes all carriers for hire or compensation within this

state not included in the definition of common carrier.

     (5) “Commission” means the public utilities commission.

     (6) “Commissioner” means a member of the public utilities commission.

     (7) “Common carrier,” except when used in chapters 12, 13, and 14 of this title, means and

includes all carriers for hire or compensation, including railroads, street railways, express, freight

and freight-line companies, dining-car companies, steam boat, motor boat, power boat, hydrofoil,

and ferry companies and all other companies operating any agency or facility for public use in the

conveyance over fixed routes, or between fixed termini within this state of persons or property by,

or by a combination of, land, air, or water.

     (8) “Company” means and includes a person, firm, partnership, corporation, quasi-

municipal corporation, association, joint-stock association or company, and his, her, its, or their

lessees, trustees, or receivers appointed by any court.

     (9) “Customer” means a company taking service from an electric distribution company at

a single point of delivery or meter location.

     (10) “Distribution facility” means plant or equipment used for the distribution of electricity

and that is not a transmission facility.

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     (11) “Division” means the division of public utilities and carriers.

     (12) “Electric distribution company” means a company engaging in the distribution of

electricity or owning, operating, or controlling distribution facilities and shall be a public utility

pursuant to subsection (20) of this section.

     (13) “Electric transmission company” means a company engaging in the transmission of

electricity or owning, operating, or controlling transmission facilities. An electric transmission

company shall not be subject to regulation as a public utility except as specifically provided in the

general laws, but shall be regulated by the Federal Energy Regulatory Commission and shall

provide transmission service to all nonregulated power producers and customers, whether affiliated

or not, on comparable, nondiscriminatory prices and terms. Electric transmission companies shall

have the power of eminent domain exercisable following a petition to the commission pursuant to

§ 39-1-31.

     (14) “Liquefied natural gas” means a fluid in the liquid state composed predominantly of

methane and that may contain minor quantities of ethane, propane, nitrogen, or other components

normally found in natural gas.

     (15) “Manufacturing customers” means all customers that have on file with an electric

distribution company a valid certificate of exemption from the Rhode Island sales tax indicating

the customer’s status as a manufacturer pursuant to § 44-18-30.

     (16) “Motor carriers” means any carrier regulated by the administrator pursuant to chapters

3, 11, 12, 13, and 14 of this title.

     (17) “Natural gas” means the combustible, gaseous mixture of low-molecular-weight,

paraffin hydrocarbons, generated below the surface of the earth, containing mostly methane and

ethane with small amounts of propane, butane, and hydrocarbons, and sometimes nitrogen, carbon

dioxide, hydrogen sulfide, and helium.

     (18) “Nonprofit housing development corporation” means a nonprofit corporation that has

been approved as a 26 U.S.C. § 501(c)(3) corporation by the Internal Revenue Service, and is

organized and operated primarily for the purpose of providing housing for low- and moderate-

income persons.

     (19) “Nonregulated power producer” means a company engaging in the business of

producing, manufacturing, generating, buying, aggregating, marketing, or brokering electricity for

sale at wholesale or for retail sale to the public; provided however, that companies that negotiate

the purchase of electric generation services on behalf of customers and do not engage in the

purchase and resale of electric generation services shall be excluded from this definition. A

nonregulated power producer shall not be subject to regulation as a public utility except as

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specifically provided in the general laws.

     (20) "Public right-of-way" means the area on, below, or above any street, avenue,

boulevard, road, highway, sidewalk, alley, waterway, land, or easement that is owned, leased, or

controlled by a public or quasi-public entity.

     (20)(21) “Public utility” means and includes every company that is an electric distribution

company and every company operating or doing business in intrastate commerce and in this state

as a railroad, street railway, common carrier, gas, thermal energy, liquefied natural gas, water,

telephone, telegraph, and pipeline company, and every company owning, leasing, maintaining,

managing, or controlling any plant or equipment, or any part of any plant or equipment, within this

state for manufacturing, producing, transmitting, distributing, delivering, or furnishing natural or

manufactured gas, directly or indirectly, to or for the public, or any cars or equipment employed

on, or in connection with, any railroad or street railway for public or general use within this state,

or any pipes, mains, poles, wires, conduits, fixtures, through, over, across, under, or along any

public highways, parkways, or streets, public lands, waters, or parks for the transmission,

transportation, or distribution of gas, or thermal energy networks for sale to the public for light,

heat, cooling, or power for providing audio or visual telephonic or telegraphic communication

service within this state, or any pond, lake, reservoir, stream, well, or distributing plant or system

employed for the distribution of water to the consuming public within this state, including the water

supply board of the city of Providence; provided, that, except as provided in § 39-16-9 and in P.L.

1933, ch. 2072, as amended, this definition shall not be construed to apply to any public waterworks

or water service owned and furnished by any city, town, water district, fire district, or any other

municipal or quasi-municipal corporation, excepting the water supply board of the city of

Providence, unless any city, town, water district, fire district, municipal or quasi-municipal

corporation obtains water from a source owned or leased by the water resources board, either

directly or indirectly, or obtains a loan from the board pursuant to the provisions of chapter 15.1 of

title 46, or sells water, on a wholesale or retail basis, inside and outside the territorial limits of the

city or town, water district, fire district, municipal or quasi-municipal corporation, except, however,

that a public waterworks or water service owned and furnished by any city, town, water district,

fire district, or any other municipal or quasi-municipal corporation that sells water, on a wholesale

or retail basis, inside and outside its territorial limits, shall not be construed as a public utility if it

has fewer than one-thousand five hundred (1,500) total customer-service connections and provided

outside sales do not exceed ten percent (10%) of the total water service connections or volumetric

sales and provided the price charged to outside customers, per unit of water, is not greater than the

price charged to inside customers for the same unit of water, nor to the Rhode Island public transit

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authority, or to the production and/or distribution of steam, heat, or water by the Rhode Island port

authority and economic development corporation in the town of North Kingstown; provided that,

production or distribution is not in utilized in the functions or operations of thermal energy

networks; and the term “public utility” shall also mean and include the Narragansett Bay water

quality management district commission; and provided that the ownership or operation of a facility

by a company that dispenses alternative fuel or energy sources at retail for use as a motor vehicle

fuel or energy source, and the dispensing of alternative fuel or energy sources at retail from such a

facility, does not make the company a public utility within the meaning of this title solely because

of that ownership, operation, or sale; and provided further that this exemption shall not apply to

presently regulated public utilities that sell natural gas or are dispensers of other energy sources;

and provided further, that the term “public utility” shall not include any company:

     (i) Producing or distributing steam or heat from a fossil-fuel-fired cogeneration plant

located at the university of Rhode Island South Kingstown, Rhode Island;

     (ii) Producing and/or distributing thermal energy and/or electricity to a state-owned facility

from a plant located on an adjacent site, regardless of whether steam lines cross a public highway;

provided that, the steam lines are not utilized in the distribution or operations of thermal energy

through thermal energy networks; and

     (iii) Providing wireless service.

     (21)(22) “Purchasing cooperatives” shall mean any association of electricity consumers

that join for the purpose of negotiating the purchase of power from a nonregulated power producer,

provided however, that purchasing cooperatives shall not be required to be legal entities and are

prohibited from being engaged in the re-sale of electric power.

     (22)(23) “Railroad” means and includes every railroad other than a street railway, by

whatsoever power, operated for public use in the conveyance in this state of persons or property

for compensation, with all bridges, ferries, tunnels, switches, spurs, tracks, stations, wharves, and

terminal facilities of every kind, used, operated, controlled, leased, or owned by or in connection

with any railroad.

     (23)(24) “Retail access” means the use of transmission and distribution facilities owned by

an electric transmission company or an electric distribution company to transport electricity sold

by a nonregulated power producer to retail customers pursuant to § 39-1-27.3.

     (24)(25) “Street railway” means and includes every railway by whatsoever power operated

or any extension or extensions, branch, or branches thereof, for public use in the conveyance in this

state of persons or property for compensation, being mainly upon, along, above, or below any street,

avenue, road, highway, bridge, or public place in any city or town, and including all switches, spurs,

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tracks, rights of trackage, subways, tunnels, stations, terminals, and terminal facilities of every kind,

used, operated, controlled, or owned by or in connection with any street railway.

     (26) "Thermal energy", when used in this chapter means piped non-combustible fluids used

for transferring heat into and out of buildings for the purpose of eliminating any resultant on-site

greenhouse gas emissions of all types of heating and cooling processes, including, but not limited

to, comfort heating and cooling, domestic hot water, and refrigeration.

     (27) "Thermal energy network", when used in this chapter, means all real estate, fixtures

and personal property operated, owned, used or to be used for or in connection with or to facilitate

a utility-scale distribution infrastructure project that supplies thermal energy.

     (25)(28) “Transmission facility” means plant or equipment used for the transmission of

electricity as determined by the Federal Energy Regulatory Commission pursuant to federal law as

of the date of the property transfers pursuant to § 39-1-27(c).

     (26)(29) “Wireless service” means communication services provided over spectrum

licensed by or subject to the jurisdiction of the Federal Communications Commission.

     (b) Notwithstanding any provision of this section or any provision of the act entitled, “An

Act Relating to the Utility Restructuring Act of 1996” (hereinafter “utility restructuring act”), upon

request by the affected electric utility, the commission may exempt from the utility restructuring

act or any provision(s) thereof, an electric utility that meets the following requirements:

     (1) The utility is not selling or distributing electricity outside of the service territory in

effect for that utility on the date of passage of the utility restructuring act; and

     (2) The number of kilowatt hours sold or distributed annually by the utility to the public is

less than five percent (5%) of the total kilowatt hours consumed annually by the state. Provided,

however, that nothing contained in this section shall prevent the commission from allowing

competition in the generation of electricity in service territories of utilities exempted in whole or in

part from the utility restructuring act pursuant to this section, as long as such allowance of

competition is conditioned upon payment to the exempted electric utility of a nonbypassable

transition charge calculated to recover the elements comparable in nature to the elements in § 39-

1-27.4(b) and (c) taking into consideration any unique circumstances applicable to the exempted

electric utility.

     39-1-3. Commission and division established — Functions of commission —

Administrator.

     (a) To implement the legislative policy set forth in § 39-1-1 and to serve as the agencies of

the state in effectuating the legislative purpose, there are hereby established a public utilities

commission and a division of public utilities and carriers. The commission shall serve as a quasi-

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judicial tribunal with jurisdiction, powers, and duties to implement and enforce the standards of

conduct under § 39-1-27.6 and to hold investigations and hearings involving the rates, tariffs, tolls,

and charges, and the sufficiency and reasonableness of facilities and accommodations of railroad,

gas, electric distribution, thermal energy, thermal energy networks, water, telephone, telegraph, and

pipeline public utilities; the location of railroad depots and stations, and the control of grade

crossings; the revocation, suspension, or alteration of certificates issued pursuant to § 39-19-4;

appeals under § 39-1-30; petitions under § 39-1-31; and proceedings under § 39-1-32.

     (b) The administrator shall be a person who is not a commissioner and who shall exercise

the jurisdiction, supervision, powers, and duties not specifically assigned to the commission,

including the execution of all laws relating to public utilities and carriers and all regulations and

orders of the commission governing the conduct and charges of public utilities and who shall

perform other duties and have powers as are hereinafter set forth. The administrator shall be a

person who is appointed by the governor for an initial term of six (6) years. The administrator shall

be appointed with the advice and consent of the senate. The director of administration, with the

approval of the governor, shall allocate the administrator to one of the grades established by the

pay plan for unclassified employees. The public utilities administrator also shall have powers and

duties as provided in § 46-15.3-20.

     SECTION 3. Section 39-2-1.2 of the General Laws in Chapter 39-2 entitled "Duties of

Utilities and Carriers" is hereby amended to read as follows:

     39-2-1.2. Utility base rate — Advertising, demand-side management, and renewables.

     (a) In addition to costs prohibited in § 39-1-27.4(b), no public utility distributing or

providing heat, electricity, or water to or for the public shall include as part of its base rate any

expenses for advertising, either direct or indirect, that promotes the use of its product or service, or

is designed to promote the public image of the industry. No public utility may furnish support of

any kind, direct or indirect, to any subsidiary, group, association, or individual for advertising and

include the expense as part of its base rate. Nothing contained in this section shall be deemed as

prohibiting the inclusion in the base rate of expenses incurred for advertising, informational or

educational in nature, that is designed to promote public safety conservation of the public utility’s

product or service. The public utilities commission shall promulgate such rules and regulations as

are necessary to require public disclosure of all advertising expenses of any kind, direct or indirect,

and to otherwise effectuate the provisions of this section.

     (b) Effective as of January 1, 2008, and for a period of twenty (20) years thereafter, each

electric distribution company shall include a charge per kilowatt-hour delivered to fund demand-

side management programs. The 0.3 mills per kilowatt-hour delivered to fund renewable energy

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programs shall remain in effect until December 31, 2028. The electric distribution company shall

establish and, after July 1, 2007, maintain, two (2) separate accounts, one for demand-side

management programs (the “demand-side account”), which shall be funded by the electric demand-

side charge and administered and implemented by the distribution company, subject to the

regulatory reviewing authority of the commission, and one for renewable energy programs, which

shall be administered by the Rhode Island commerce corporation pursuant to § 42-64-13.2 and shall

be held and disbursed by the distribution company as directed by the Rhode Island commerce

corporation for the purposes of developing, promoting, and supporting renewable energy programs.

     During the time periods established in this subsection, the commission may, in its

discretion, after notice and public hearing, increase the sums for demand-side management and

renewable resources. In addition, the commission shall, after notice and public hearing, determine

the appropriate charge for these programs. The office of energy resources, and/or the administrator

of the renewable energy programs, may seek to secure for the state an equitable and reasonable

portion of renewable energy credits or certificates created by private projects funded through those

programs. As used in this section, “renewable energy resources” shall mean: (1) Power generation

technologies, as defined in § 39-26-5, “eligible renewable energy resources,” including off-grid

and on-grid generating technologies located in Rhode Island, as a priority; (2) Research and

development activities in Rhode Island pertaining to eligible renewable energy resources and to

other renewable energy technologies for electrical generation; or (3) Projects and activities directly

related to implementing eligible renewable energy resources projects in Rhode Island.

Technologies for converting solar energy for space heating or generating domestic hot water may

also be funded through the renewable energy programs. Fuel cells may be considered an energy

efficiency technology to be included in demand-side management programs. Special rates for low-

income customers in effect as of August 7, 1996, shall be continued, and the costs of all of these

discounts shall be included in the distribution rates charged to all other customers. Nothing in this

section shall be construed as prohibiting an electric distribution company from offering any special

rates or programs for low-income customers which are not in effect as of August 7, 1996, subject

to the approval by the commission.

     (1) The renewable energy investment programs shall be administered pursuant to rules

established by the Rhode Island commerce corporation. Said rules shall provide transparent criteria

to rank qualified renewable energy projects, giving consideration to:

     (i) The feasibility of project completion;

     (ii) The anticipated amount of renewable energy the project will produce;

     (iii) The potential of the project to mitigate energy costs over the life of the project; and

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     (iv) The estimated cost per kilowatt-hour (KWh) of the energy produced from the project.

     (c) [Deleted by P.L. 2012, ch. 241, art. 4, § 14.]

     (d) The chief executive officer of the commerce corporation is authorized and may enter

into a contract with a contractor for the cost-effective administration of the renewable energy

programs funded by this section. A competitive bid and contract award for administration of the

renewable energy programs may occur every three (3) years and shall include, as a condition, that

after July 1, 2008, the account for the renewable energy programs shall be maintained and

administered by the commerce corporation as provided for in subsection (b) of this section.

     (e) Effective January 1, 2007, and for a period of twenty-one (21) years thereafter, each

gas distribution company shall include, with the approval of the commission, a charge per deca

therm delivered to fund demand-side management programs (the “gas demand-side charge”),

including, but not limited to, programs for cost-effective energy efficiency, energy conservation,

combined heat and power systems, and weatherization services for low-income households.

     (f) Each gas company shall establish a separate account for demand-side management

programs (the “gas demand-side account”) that shall be funded by the gas demand-side charge and

administered and implemented by the distribution company, subject to the regulatory reviewing

authority of the commission. The commission may establish administrative mechanisms and

procedures that are similar to those for electric demand-side management programs administered

under the jurisdiction of the commission and that are designed to achieve cost-effectiveness and

high, life-time savings of efficiency measures supported by the program.

     (g) The commission may, if reasonable and feasible, except from this demand-side

management charge:

     (1) Gas used for distribution generation; and

     (2) Gas used for the manufacturing processes, where the customer has established a self-

directed program to invest in and achieve best-effective energy efficiency in accordance with a plan

approved by the commission and subject to periodic review and approval by the commission, which

plan shall require annual reporting of the amount invested and the return on investments in terms

of gas savings.

     (h) The commission may provide for the coordinated and/or integrated administration of

electric and gas demand-side management programs in order to enhance the effectiveness of the

programs. Such coordinated and/or integrated administration may after March 1, 2009, upon the

recommendation of the office of energy resources, be through one or more third-party entities

designated by the commission pursuant to a competitive selection process.

     (i) Effective January 1, 2007, the commission shall allocate, from demand-side

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management gas and electric funds authorized pursuant to this section, an amount not to exceed

three percent (3%) of such funds on an annual basis for the retention of expert consultants, and

reasonable administration costs of the energy efficiency and resource management council

associated with planning, management, and evaluation of energy-efficiency programs, renewable

energy programs, system reliability, least-cost procurement, and with regulatory proceedings,

contested cases, and other actions pertaining to the purposes, powers, and duties of the council,

which allocation may by mutual agreement, be used in coordination with the office of energy

resources to support such activities.

     (j) Effective January 1, 2016, the commission shall annually allocate from the

administrative funding amount allocated in subsection (i) from the demand-side management

program as described in subsection (i) as follows: (1) for the energy efficiency and resource

management council, no more than forty percent (40%) for the purposes identified in subsection (i)

and (2) sixty percent (60%) of three percent (3%) from the demand-side management gas and

electric funds annually to the office of energy resources for activities associated with planning,

management, and evaluation of energy-efficiency programs, renewable energy programs, system

reliability, least-cost procurement, and with regulatory proceedings, contested cases, and other

actions pertaining to the purposes, powers, and duties of the office of energy resources and shall

have exclusive authority to direct the use of the office administrative and programmatic funds.

     (k) On April 15, of each year, the office and the council shall submit to the governor, the

president of the senate, and the speaker of the house of representatives, separate financial and

performance reports regarding the demand-side management programs, including the specific level

of funds that were contributed by the residential, municipal, and commercial and industrial sectors

to the overall programs; the businesses, vendors, and institutions that received funding from

demand-side management gas and electric funds used for the purposes in this section; and the

businesses, vendors, and institutions that received the administrative funds for the purposes in

subsections (i) and (j). These reports shall be posted electronically on the websites of the office of

energy resources and the energy efficiency and resources management council.

     (l) On or after August 1, 2015, at the request of the Rhode Island infrastructure bank, each

electric distribution company, except for the Pascoag Utility District and Block Island Power

Company, shall remit two percent (2%) of the amount of the 2014 electric demand-side charge

collections to the Rhode Island infrastructure bank.

     (m) On or after August 1, 2015, at the request of the Rhode Island infrastructure bank, each

gas distribution company shall remit two percent (2%) of the amount of the 2014 gas demand-side

charge collections to the Rhode Island infrastructure bank.

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     (n) Effective January 1, 2022, the commission shall allocate, from demand-side

management gas and electric funds authorized pursuant to this section, five million dollars

($5,000,000) of such funds on an annual basis to the Rhode Island infrastructure bank. Gas and

electric demand-side funds transferred to the Rhode Island infrastructure bank pursuant to this

section shall be eligible to be used in any energy efficiency, renewable energy, clean transportation,

clean heating, energy storage, or demand-side management project financing program administered

by the Rhode Island infrastructure bank notwithstanding any other restrictions on the use of such

collections set forth in this chapter. The infrastructure bank shall report annually to the commission

within ninety (90) days of the end of each calendar year how collections transferred under this

section were utilized.

     (o) The Rhode Island office of energy resources, in coordination with the energy efficiency

and resource management council, and following consultation with the public utilities commission

and division of public utilities and carriers, shall issue a request for proposals for the cost-effective

administration and implementation of statewide energy efficiency programs funded by this section

no later than September 30, 2023. The draft request for proposals shall be reviewed through at least

one technical session at the public utilities commission prior to issuance. Public utilities

commission approval shall not be required. The Rhode Island office of energy resources, in

coordination with the energy efficiency and resource management council, shall evaluate proposals

and determine whether energy efficiency administration and implementation by the electric and gas

distribution company or a third party is likely to achieve the most net benefits for electric and gas

customers in Rhode Island. After January 1, 2025, the office of energy resources may, periodically,

and at its discretion, issue additional requests for proposals for the administration and

implementation of statewide energy efficiency programs funded through this chapter of 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.

     (1) Nothing in this chapter shall prohibit the electric and/or gas distribution company from

submitting a proposal to administer and implement the state energy efficiency programs.

     (2) If the office of energy resources, in coordination with the energy efficiency and resource

management council, determines that the use of a third-party administrator is likely to achieve the

most net benefits for electric and gas customers in Rhode Island, it shall file its recommendation

with the public utilities commission, which shall docket and rule on the matter pursuant to its

general statutory authorization.

     (3) If the commission determines that the recommended third-party administrator is in the

interest of Rhode Island utility customers, it shall provide for the full cost recovery for the third-

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party administrator consistent with the terms of the approved contract, and which shall reflect the

overall annual budget approved by the commission. The third-party administrator shall be subject

to all the requirements set forth for the electric and gas distribution company per § 39-1-27.7.

     (4) If the commission determines that a third-party administrator will administer the state

energy efficiency programs on or after June 1, 2024, the commission shall direct the gas and electric

distribution company to collect and transfer the gas and electric energy efficiency funds to the third-

party administrator for the annual state energy efficiency program beginning with the program year

and thereafter for the remaining program years. The gas and electric distribution company shall

transfer the annual administrative funds to the office of energy resources and energy efficiency and

resource management council.

     (5) If a third-party administrator implements the annual energy efficiency programs then

they shall be required to develop and design the annual state energy efficiency program with the

office of energy resources and energy efficiency and resource management council, including a

vote by the energy efficiency and resource management council prior to the third-party

administrator filing the annual program plan to the public utilities commission for review and a

decision.

     (6) The third-party administrator shall file the annual state energy efficiency program plan

to the public utilities commission for review and approval no later than September 30, 2024, and

annually thereafter on such date.

     (7) The third-party administrator shall provide all information requested by the office of

energy resources, energy efficiency and resource management council, division of public utilities

and carriers, and the public utilities commission, including responses to data requests, which are

necessary for the agencies to carry out their respective oversight roles, and shall be accountable to

the same standards as the utility with administering and implementing energy efficiency, system

reliability, and least-cost procurement standards and goals in accordance with § 39-1-27.7 and this

section.

     (8) If the office does not recommend advancement of a third-party administrator, the

electric and gas distribution company shall continue to administer statewide energy efficiency

programs.

     (p) Effective January 1, 2025, the commission shall allocate from demand-side

management gas funds authorized pursuant to this section sufficient funds for the purposes of

constructing and maintaining thermal energy networks, as defined in § 39-1-2.

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     SECTION 4. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- UTILITY THERMAL ENERGY

NETWORK AND JOBS ACT

***

     This act would establish thermal energy networks for the purpose of creating thermal

energy network infrastructure within this state by any public utility company that provides electric

and natural gas distribution, in an effort to maximize cost-effective investments in thermal energy

networks when deemed in the public interest by the public utilities commission (PUC).

     This act would take effect upon passage.

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