2024 -- S 2542

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LC005247

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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 -- AFFORDABLE CLEAN ENERGY

SECURITY ACT

     Introduced By: Senators de la Cruz, Rogers, and DeLuca

     Date Introduced: March 01, 2024

     Referred To: Senate Environment & Agriculture

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 39-31-2, 39-31-3, 39-31-4, 39-31-5 and 39-31-7 of the General

Laws in Chapter 39-31 entitled "Affordable Clean Energy Security Act" are hereby amended to

read as follows:

     39-31-2. Purpose.

     The purpose of this chapter is to:

     (1) Secure the future of the Rhode Island and New England economies, and their shared

environment, by making state and/or coordinated, cost-effective, strategic investments in energy

resources and infrastructure such that the New England states improve energy system reliability

and security; enhance economic competitiveness by reducing energy costs to attract new

investment and job growth opportunities; and protect the quality of life and environment for all

residents and businesses;

     (2) Utilize state and/or coordinated competitive processes, in collaboration with other New

England states and their instrumentalities, to advance strategic investment in energy infrastructure

and energy resources, provided that the total energy security, reliability, environmental, and

economic benefits to the state of Rhode Island and its ratepayers exceed the costs of the projects,

and ensure that the benefits and costs of the energy infrastructure investments are shared

appropriately among the New England States; and

     (3) Encourage an a balanced approach to energy policy that advances the objectives of

achieving a reliable, clean-energy future that is consistent with meeting greenhouse gas reduction

goals as established by chapter 6.2 of title 42 (the “2021 act on climate”) at reasonable cost

affordable to ratepayers. If any provision of this chapter conflicts with the provisions of chapter 6.2

of title 42 (the "2021 act on climate") the provisions of this chapter shall prevail.

     39-31-3. Commercially reasonable defined. Definitions.

     When used in this chapter, “commercially reasonable” (a) "Commercially reasonable"

means terms and pricing that are reasonably consistent with what an experienced power market

analyst would expect to see in transactions involving regional energy resources and regional energy

infrastructure. Commercially reasonable shall include having a credible project operation date, as

determined by the commission, but a project need not have completed the requisite permitting

process to be considered commercially reasonable. Commercially reasonable shall require a

determination by the commission that the benefits to Rhode Island exceed the cost of the project.

The commission shall determine, based on the preponderance of the evidence, that the total energy

security, reliability, environmental, and economic benefits to the state of Rhode Island and its

ratepayers exceed the costs of such projects. If there is a dispute about whether any terms or pricing

are commercially reasonable, the commission shall make the final determination after evidentiary

hearings.

     (b) Emission reduction mitigation means a technology, process, or method of carbon

sequestration, that is recognized by the U.S. Environmental Protection Agency or as identified by

the office of energy resources that results in the reduction of greenhouse gas emissions from natural

gas transmission or electric generation.

     39-31-4. Regional energy planning.

     (a) Consistent with the purposes of this chapter, and utilizing regional stakeholder

processes where appropriate, the office of energy resources, in consultation and coordination with

the division of public utilities and carriers and 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), is

authorized to:

     (1) Participate in the development and issuance of state, regional, or multistate competitive

solicitation(s) for the development and construction of regional electric-transmission projects that

would allow for the reliable transmission of large- or small-scale domestic or international

hydroelectric power to New England load centers that will benefit the state of Rhode Island and its

ratepayers, and such solicitations may be issued by the New England States Committee on

Electricity or the electric or natural gas distribution company to further the purposes of this chapter;

     (2) Participate in the development and issuance of state, regional, or multistate competitive

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solicitation(s) for the development and construction of regional electric-transmission projects that

would allow for the reliable transmission of eligible renewable energy resources, including offshore

wind, as defined by § 39-26-5(a), to New England load centers that will benefit the state of Rhode

Island and its ratepayers, and the solicitations may be issued by the New England States Committee

on Electricity or the electric or natural gas distribution company to further the purposes of this

chapter; and

     (3) Participate in the development and issuance of regional or multistate competitive

solicitation(s) for the development and construction of regional natural-gas-pipeline infrastructure

and capacity that will benefit the state of Rhode Island and its ratepayers by strengthening energy

system reliability and security and, in doing so, potentially mitigate energy price volatility that

threatens the economic vitality and competitiveness of Rhode Island residents and businesses. The

solicitations may be issued by the New England States Committee on Electricity or the electric or

natural gas distribution company to further the purposes of this chapter; and the solicitations may

request proposals that are priced in increments to allow for the evaluation of project costs and

benefits associated with adding various levels of additional, natural gas pipeline capacity into New

England and assist with the optimization of energy system reliability, economic, and other benefits

consistent with the purposes of this chapter.

     (4) As part of any such state, regional, or multistate competitive solicitation processes

conducted pursuant to this chapter, the office of energy resources shall work jointly with the

division of public utilities and carriers, and with the electric distribution company as appropriate,

to identify incremental, natural-gas-pipeline infrastructure and capacity and/or electric-

transmission projects that optimize energy reliability, economic, environmental, and ratepayer

impacts for Rhode Island, consistent with the legislative findings and purpose of this chapter. The

office of energy resources and division of public utilities and carriers shall be authorized to utilize

expert consultants, as needed, to assist in any state, regional, multistate, or state-level determination

related to the procurement activities identified in § 39-31-5.

     (5) Identify and participate in the development of regional or multistate emissions

reduction mitigation strategies to reduce emissions from natural gas transmission and generated

electricity. The office of energy resources shall participate in the identification, development, and

promote the use of emission mitigations for natural gas transmission and electric generation with

the New England States Committee on Electricity or the electric or natural gas distribution

company.

     (b) Prior to any binding commitments being made by any agencies of the state, the electric

distribution company, or any other entity that would result in costs being incurred directly, or

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indirectly, by Rhode Island electric and/or gas consumers through distribution or commodity rates,

the office of energy resources and division of public utilities and carriers shall jointly file any

energy infrastructure project recommendation(s) with the public utilities commission and may

make such filing jointly with the electric or natural gas distribution company as appropriate. The

public utilities commission shall consider any such recommendation(s) as specified under § 39-31-

7.

     (c) A copy of the filing made under subsection (b) of this section shall be provided to the

governor, the president of the senate, the speaker of the house, the department of environmental

management, and the commerce corporation.

     (d) The electric distribution company shall be provided with a copy of any filing made

under this section at least ten (10) business days in advance of its filing with the public utilities

commission and the electric or gas distribution utility may file separate comments when the filing

is made.

     (e) As part of any office of energy resources and division of public utilities and carriers

filing made pursuant to this chapter, the agencies shall identify the expected energy reliability,

energy security, and ratepayer impacts that are expected to result from commitments being made

in connection with the proposed project(s).

     (f) The office of energy resources and division of public utilities and carriers reserve the

right to determine that energy infrastructure projects submitted in any state, regional, or multistate

competitive solicitation process are not in Rhode Island’s energy reliability, energy security, and/or

ratepayer interests, and shall make such findings available to the governor, the president of the

senate, and the speaker of the house. The electric or gas distribution utility may attach a separate

opinion to those findings, at its election.

     39-31-5. State and regional energy procurement.

     (a) Consistent with the purposes 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), in consultation with the office of energy resources and the division of public utilities and

carriers is authorized to voluntarily and encouraged to participate in state, multistate, or regional

efforts to:

     (1) Procure domestic or international large- or small-scale hydroelectric power and eligible

renewable energy resources, including wind, as defined by § 39-26-5(a), that seek to meet the

renewable energy standard goals of chapter 26 of this title but shall not be mandatory if such

renewable sources are not found to be commercially reasonable and affordable to ratepayers under

this chapter on behalf of electric ratepayers; provided, however, that large-scale hydroelectric

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power shall not be eligible under the renewable energy standard established by chapter 26 of this

title. If the provisions of this section conflict with the provisions of chapter 26 of this title, the

provisions of this section shall prevail;

     (2) Procure incremental, natural-gas-pipeline infrastructure and capacity into New England

to help strengthen energy system reliability and facilitate the economic interests of the state and its

ratepayers. Provided that, any natural gas infrastructure or capacity procured that utilizes emissions

reduction mitigation shall be counted towards the statewide greenhouse gas emission reduction

mandate goals as defined by § 42-6.2-9. The office of energy resources shall determine the amount

of emissions reduction to attribute to each emission reduction mitigation identified;

     (3) Support the development and filing of necessary tariffs and other appropriate cost-

recovery mechanisms, as proposed by the office of energy resources or the division of public

utilities and carriers, that allocate the costs of new, electric-transmission and natural-gas-pipeline

infrastructure and capacity projects selected pursuant to the provisions of this chapter to ratepayers,

such that costs are shared among participating states in an equitable manner; and

     (4) To the extent that 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), pursues the

objectives identified above, the public utility company shall utilize all appropriate, competitive

processes, and maintain compliance with applicable federal and state siting laws.

     (b) Any procurement authorized under this section shall be commercially reasonable.

     (c) If any part of this chapter conflicts with chapter 26 or chapter 6.2 of title 42 (the "2021

act on climate") the provisions of this chapter shall prevail.

     39-31-7. Duties of the commission.

     (a) The commission shall approve any proposals made by the electric and gas distribution

company that are commercially reasonable, affordable to ratepayers, and advance the purposes of

this chapter. The commission’s authority shall include, without limitation, the authority to:

     (1) Approve long-term contracts entered into pursuant to the goals and provisions of this

chapter for large- or small-scale hydroelectric power and renewable energy resources that are

eligible under the renewable energy standard established by chapter 26 of this title; provided,

however, that large-scale hydroelectric power shall not be eligible under the renewable energy

standard established by chapter 26 of this title;

     (2) Annually determine the adequacy of renewable energy supplies to meet the increase in

the percentage requirement of energy from renewable energy resources effective for the following

year. The commission shall annually publish the commission’s determination of adequacy on the

agency’s website;

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     (2)(3) Approve long-term contracts for natural-gas-pipeline infrastructure and capacity

consistent with the purposes of this chapter;

     (3)(4) Approve rate-recovery mechanisms proposed by the electric and gas distribution

companies relating to costs incurred under this chapter by the electric and gas distribution company

that facilitate the multistate or regional sharing of costs necessary to implement electric

transmission and natural-gas-pipeline infrastructure projects pursued under this chapter, including

any costs incurred through the Federal Energy Regulatory Commission approved tariffs related to

such multistate or regional energy infrastructure procurements;

     (4)(5) Address any proposed changes to standard-offer procurements, standard-offer

pricing, and retail-choice rules;

     (5)(6) Provide for the recovery of reasonable net costs from all distribution customers

incurred by the electric and gas distribution company in furtherance of the purposes of this chapter

that may include, but are not limited to, costs to solicit, evaluate, and seek approval of such

contracts as well as net costs incurred under any contracts approved by the commission under this

section and costs associated with the management of incremental capacity resulting from interstate

gas-pipeline-expansion projects pursued pursuant to this chapter and costs associated with

investments in local gas-distribution-network assets necessary to implement such interstate gas-

pipeline-expansion projects;

     (6)(7) Nothing herein is intended to prohibit the commission from allowing the electric

distribution company to use the energy, capacity, and other attributes purchased for resale to

customers and approve tariffs that charge those customers for the energy, capacity, and other

attributes from the resale to those customers; and/or to use the NE-GIS certificates for purposes of

meeting the obligations set forth in chapter 26 of this title (“renewable energy standard”);

     (7)(8) Approve cost allocation proposals filed by the gas distribution company and/or the

electric distribution company that appropriately allocate offshore wind costs incurred under § 39-

31-10, natural gas infrastructure and capacity costs incurred under § 39-31-6 between electric and

gas distribution customers of the electric and gas distribution company in a manner proportional to

the energy benefits accrued by Rhode Island’s gas and electric customers from making such

investments. In making its determination, the commission shall consider projected reductions in

regional, wholesale electric prices as a benefit that accrues to electric ratepayers. The allocation of

costs shall include all distribution customers, regardless from whom they are purchasing their

commodity service; and

     (8)(9) Approve any other proposed regulatory or ratemaking changes that reasonably

advance the goals set forth herein.

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     (b) The grant of authorizations under this chapter shall not be construed as creating a

mandate or obligation on the part of the electric and gas distribution company to enter into any

contracts or file any proposals pursuant to this chapter.

     (c) The public utilities commission shall docket any proposals made by the office of energy

resources and division of public utilities and carriers pursuant to § 39-31-4. Docket materials shall

be posted and maintained on the commission’s website. The commission shall conduct

proceedings, as provided below, solely for the purpose of determining whether the proposed

infrastructure projects, if implemented, are in the public interest and no commitments shall be valid

or authorized without such finding being made by the commission. The validity and approval of

any commitments made by the electric or gas distribution company in furtherance of the purposes

of this chapter shall be separate and subject to § 39-31-5. The docket opened pursuant to this

subsection shall proceed as follows:

     (1) The following state agencies shall provide advisory opinions to the commission on the

topics specified below within sixty (60) days from the docketing date:

     (i) The department of environmental management (DEM) shall provide an advisory

opinion on the expected greenhouse gas emissions and statewide environmental impacts, including

on forests and the ocean, resulting from the proposed project(s), including a determination as to

whether the proposed project(s) advance the goals of chapter 6.2 of title 42 (the “2021 Act on

Climate”).

     (ii) The commerce corporation shall provide an advisory opinion on the expected statewide

economic impacts resulting from the proposed project(s).

     (2) The commission shall notify the aforementioned agencies upon the filing of any

proposal made under this section, and notify them of any related hearings and/or proceedings.

     (3) Advisory opinions issued by agencies designated under subsection (c)(1) of this section

shall not be considered as final decisions of the agencies making the opinions and shall not be

subject to judicial review under § 42-35-15 or any other provision of the general laws.

     (4) Upon completion of the sixty-day (60) advisory-opinion period, the commission shall

provide for a thirty-day (30) public comment period on any energy infrastructure project(s) selected

pursuant to this chapter and hold evidentiary hearings. In addition to evidentiary hearings, the

commission shall also hold at least one public hearing to accept public comment on the proposal(s)

prior to an open meeting held pursuant to this section. The commission shall also seek input from

the ratepayers advisory board established under § 39-1-37.1 before the end of the thirty (30) day

public comment period.

     (5) The commission shall hold an open meeting no later than one hundred twenty (120)

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days from the date of filing by the office of energy resources and division of public utilities and

carriers and shall certify that the proposed project(s) are in the public interest if, in the commission’s

determination, and in consideration of filed advisory opinions and the opinion of the electric or gas

distribution utility, the proposed infrastructure project(s):

     (i) Are consistent with the findings and purposes of this chapter;

     (ii) Will benefit Rhode Island by improving local and regional energy system reliability

and security;

     (iii) Will benefit Rhode Island ratepayers by offering the potential for reduced energy price

volatility and reduction of energy supply costs in the context of an integrated regional energy

system;

     (iv) Will not cause unacceptable harm to the environment and are consistent with, seeks to

reasonably meet the greenhouse gas reduction goals established in chapter 6.2 of title 42 (the “2021

Act on Climate”) and does not conflict with this chapter; and

     (v) Will enhance not harm the economic fabric growth of the state.

     (6) The commission shall issue a written determination of its findings within ten (10)

business days of its open-meeting decision and provide copies of that determination, along with

copies of all advisory opinions, public comment, and any other materials deemed relevant to the

commission determination, to the governor, the president of the senate, the speaker of the house,

the commissioner of the office of energy resources, and the administrator of the division of public

utilities and carriers.

     (d) A determination issued by the commission shall constitute the sole, final, binding, and

determinative regulatory decision within the state for the purpose of authorizing the state to support

a proposed, regional energy-infrastructure project(s) that is funded through the Federal Energy

Regulatory Commission approved tariffs on a regional and/or multistate basis pursuant to this

chapter. Appeals shall be governed by § 39-5-1.

     (e) Upon issuance of a written determination by the commission finding that the proposed

project(s) is in the public interest, the office of energy resources and division of public utilities and

carriers shall, on behalf of the state, be authorized to support any state, regional, and/or multistate

process necessary to implement the project(s), including, without limitation, supporting any

necessary and related Federal Energy Regulatory Commission filings; provided, however, that any

commitments made by the electric or gas distribution company to implement the proposals remain

voluntary and subject to § 39-31-5.

     (f) Nothing in this section shall be construed to preclude the electric or gas distribution

company from making a filing under § 39-31-6, simultaneous with a filing under this section by

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the office of energy resources and the division of public utilities and carriers, in which case the

filings made under §§ 39-31-6 and 39-31-7 shall be consolidated.

     SECTION 2. This act shall take effect upon passage.

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LC005247

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- AFFORDABLE CLEAN ENERGY

SECURITY ACT

***

     This act would make several amendments relative to the affordable clean energy security

act establishing the act's priority over chapter 6.2 of title 42 (the "2021 act on climate") and

providing for the participation and development of regional or multistate emissions reduction

mitigation strategies.

     This act would take effect upon passage.

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