2024 -- S 2499

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LC005005

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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 -- ENERGY STORAGE SYSTEMS

ACT

     Introduced By: Senators Euer, Sosnowski, DiMario, and Zurier

     Date Introduced: March 01, 2024

     Referred To: Senate Commerce

     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

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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) If the commission makes a finding that storage may meet distribution system or bulk

power system needs, or provide net value to the general body of ratepayers, it shall make a finding

of whether there should be a target for procurement of transmission level or distribution level

storage. 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 supply, reliable, prudent

and environmentally responsible.

     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

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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 December 31,

2024, 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 procurement.

     (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 (90MW) by December 31, 2026;

     (2) One hundred ninety-five megawatts (195MW) by December 31, 2028; and

     (3) 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 to 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:

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     (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 located at a customer’s premises.

     (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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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- ENERGY STORAGE SYSTEMS

ACT

***

     This act would require the public utilities commission to engage stakeholders to adopt a

framework for an energy storage system tariff for energy storage systems connected to the electric

distribution system.

     This act would also move up the deadline for the application of financial remuneration and

incentives from January 1, 2027, to December 31, 2024, unless otherwise granted by the public

utilities commission.

     This act would further set energy storage systems capacity and direct the Rhode Island

infrastructure bank to develop programs to distribute funds to meet the energy storage systems

capacity goals.

     This act would take effect upon passage.

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