2024 -- H 7811

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LC005069

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2024

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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

     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

2024 ENERGY STORAGE ACT

     39-33-1. Energy storage target.

     In order to support a reliable and flexible electric grid, reduce peak demand, facilitate the

integration of renewable energy and distributed energy resources, and enhance resilience, it shall

be the policy of the State of Rhode Island to meet or exceed the following energy storage

deployment goals:

     (1) Two hundred megawatts (200 MW) by December 31, 2028; and

     (2) Six hundred megawatts (600 MW) by December 31, 2033.

     39-33-2. Energy storage compensation program.

     (a) On or before October 1, 2024, the office of energy resources shall initiate a process to

develop one or more programs, and associated funding mechanisms, for electric energy storage

resources connected to the electric distribution system, including the incorporation of electric

energy storage into existing programs. The office of energy resources shall develop:

     (1) One or more programs for the residential class of electric customers;

     (2) One or more programs for commercial and industrial classes of electric customers; and

     (3) A program for energy storage systems connected to the electric distribution system in

front of the meter and not located at a customer premises.

     (b) In undertaking the actions described in subsection (a) of this section, the office shall

consider one or more programs to incentivize the deployment of energy storage technologies that

most effectively leverage the value of such technologies to achieve objectives including, but not

limited to:

     (1) Providing positive net present value to all ratepayers, or a subset of ratepayers paying

for the benefits that accrue to that subset of ratepayers;

     (2) Providing multiple types of benefits to the electric grid associated with short, long, and

multi-day duration storage, including, but not limited to, customer, local, or community resilience,

ancillary services, reduce peak demand or that support the deployment of other distributed energy

resources;

     (3) Fostering the sustained, orderly development of a state-based energy storage industry;

     (4) Maximizing the value from the participation of energy storage systems in capacity

markets or in reducing peak loads on the electric system. The office of energy resources shall

include consideration of all energy storage configurations that are connected to the distribution

system, including systems connected in front of the meter and not located at a customer premises;

     (5) The calculation of program benefits shall include calculations of the social value of

greenhouse gas (“GHG”) emissions reductions; and

     (6) Providing technical assistance, training, and additional resources for municipal offices

relating to the permitting of energy storage resources.

     (c) The office of energy resources may select the electric distribution company, a third

party it deems appropriate, or any combination thereof, to implement one or more programs for

electric energy storage resources connected to the electric distribution system. Customers shall have

the option to participate in the programs developed pursuant to subsection (a) of this section through

third-party aggregators, who may enroll directly and participate in the programs with the energy

storage devices under their management. Third-party aggregators shall be separate and independent

of any third party that may be selected to implement any of the programs.

     39-33-3. Energy storage rate design.

     (a) The public utilities commission shall initiate a docket to create a rate design for energy

storage systems connected to the distribution system in front of the meter on or before October 31,

2024. The docket proceeding shall result in at least one rate tariff for energy storage systems

connected to the distribution system in front of the meter to be effective on or before March 31,

2025, that shall not include costs that are otherwise recouped via project sponsor-funded

interconnection upgrades or otherwise paid directly by the project sponsor, and shall include rates

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designed to reflect cost causation and ensure that energy storage systems are incentivized to charge

and discharge at times that benefit the system.

     (b) The electric distribution company shall file a notice on or before March 31, 2025, to

the public utilities commission, of its intent to promptly file a wholesale distribution tariff with the

federal energy regulatory commission. The tariff shall not include costs that are otherwise recouped

via project sponsor-funded interconnection upgrades or otherwise paid directly by the project

sponsor, and shall include rates designed to reflect cost causation and ensure that energy storage

systems are incentivized to charge and discharge at times that benefit the system.

     SECTION 2. 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 procurement.

     (a) 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 chapter 33 of title 39.

     (b) The solicitation method shall be informed by a request for information on potential

contract structures between electric distribution companies and third-party operators of energy

storage projects, and products or services that may be procured.

     (c) The solicitation process shall permit a reasonable amount of negotiating discretion for

the parties to engage in arms-length negotiations over final contract terms.

     (d) Each contract entered into pursuant to this section shall not unreasonably encumber an

energy storage resource from participating in regional markets or from providing other grid

services.

     (e) The net costs of any such agreement, including costs incurred by the electric distribution

companies under the agreement and reasonable costs incurred by the electric distribution

companies in connection with the agreement, shall be recovered through a fully reconciling

component of electric rates for all customers of electric distribution companies. Any net revenues

from the sale of products purchased in accordance with long-term contracts entered into pursuant

to this section shall be credited to customers through the same fully reconciling rate component for

all customers of the contracting electric distribution company.

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     SECTION 3. 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 -- 2024 ENERGY STORAGE ACT

***

     This act would require the office of energy resources to initiate the process of developing

one or more programs, and associated funding mechanisms, for electric energy storage resources

connected to the electric distribution system, including the incorporation of electric energy storage

into existing programs.

     This act would take effect upon passage.

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