ARTICLE 11

RELATING TO AFFORDABILITY

     SECTION 1. Title 27 of the General Laws entitled “Insurance” is hereby amended by

adding thereto the following chapter:

CHAPTER 84

PHARMACY BENEFIT MANAGER TRANSPARENCY REPORTING AND STUDY

ACT

     27-84-1. Short title.

     This chapter shall be known and may be cited as the “Pharmacy Benefit Manager

Transparency Reporting and Study Act.”

     27-84-2. Definitions.

     As used in this chapter, the following terms shall mean:

     (1) “Aggregate Retained Rebate Percentage” means the percentage of all rebates received

from a manufacturer or other entity to a Pharmacy Benefit Manager for prescription drug utilization

which is not passed on to the Pharmacy Benefit Manager’s health carrier clients. The percentage

shall be calculated for each health carrier for rebates in the prior calendar years as follows: a) the

sum total dollar amount of rebates received from all pharmaceutical manufacturers for all utilization

of covered persons of a health carrier that was not passed through to the health carrier b) divided

by the sum total dollar amount of all rebates received from all pharmaceutical manufacturers for

covered persons of a health carrier.

     (2) “Health Benefit Plan” means a policy, contract, certificate or agreement offered or

issued by a health carrier to provide, deliver, arrange for, pay for or reimburse any of the costs of

healthcare services.

     (3) “Health Carrier” means an entity subject to the insurance laws and regulations of this

State, or subject to the jurisdiction of the health insurance commissioner, that contracts or offers to

contract, or enters into an agreement to provide, deliver, arrange for, pay for, or reimburse any of

the cost of health care services, including a health insurance company, a health maintenance

organization, a hospital and health services corporation, or any other entity providing a plan of

health insurance, health benefits or health care services.

     (4) “Pharmacy Benefit Manager” means a person, business, or other entity that, pursuant

to a contract or under an employment relationship with a health carrier, a self-insurance plan, or

other third-party payer, either directly or through an intermediary, manages the prescription drug

coverage provided by the health carrier, self-insurance plan, or other third-party payer including,

but not limited to, the processing and payment of claims for prescription drugs, the performance of

drug utilization review, the processing of drug prior authorization requests, the adjudication of

appeals or grievances related to prescription drug coverage contracting with network pharmacies,

and controlling the cost of covered prescription drugs.

     (5) “Rebates” means all price concessions paid by a manufacturer to a Pharmacy Benefit

Manager or health carrier, including rebates, discounts, and other price concessions that are based

on actual or estimated utilization of a prescription drug. Rebates also include price concessions

based on the effectiveness of a drug as in a value-based or performance-based contract.

     (6) “Spread Pricing” means any amount charged or claimed by a Pharmacy Benefit

Manager to a health carrier that is in excess of the amount the Pharmacy Benefit Manager paid to

the pharmacy that filled the prescription.

     (7) “Trade Secrets” has the meaning found in § 6-41-1(4).

     27-84-3. Pharmacy Benefit Manager Transparency.

     (a) Beginning March 1, 2027, and annually thereafter, each Pharmacy Benefit Manager

shall submit a transparency report containing data from the prior calendar year to the health

insurance commissioner. The transparency report shall contain the following information:

     (1) The aggregate amount of all rebates that the Pharmacy Benefit Manager received from

all pharmaceutical manufacturers for all health carrier clients and for each health carrier client;

     (2) The aggregate administrative fees that the Pharmacy Benefit Manager received from

all manufacturers for all health carrier clients and for each health carrier client;

     (3) The aggregate retained rebates that the Pharmacy Benefit Manager received from all

pharmaceutical manufacturers and did not pass through to health carriers;

     (4) The aggregate retained rebate percentage as defined in section 27-84-2;

     (5) The highest, lowest, and mean aggregate retained rebate percentage for all health

     carrier clients and for each health carrier client; and

     (6) A response to a set of standard questions developed by the health insurance

commissioner regarding business practices, including but not limited to, rebate pass through

practices, spread pricing, pharmacy network development, and utilization management.

     (b) A Pharmacy Benefit Manager providing information under this section shall provide

complete information to the health insurance commissioner but may request that the health

insurance commissioner designate certain material as a trade secret with a factual and legal analysis

supporting such request. Disclosure, however, may be ordered by a court of this State for good

cause shown or made in a court filing.

     (c) Within sixty (60) days of receipt of complete reports, the health insurance commissioner

shall publish the transparency report of each Pharmacy Benefit Manager on the agency’s website

in a form and manner that does not violate State trade secrets law.

     (d) The health insurance commissioner may impose administrative penalties in accordance

with § 42-14-16 for violations of this section.

     27-84-4. Pharmacy Benefit Manager Study.

     (a) On or before October 1, 2027, the health insurance commissioner shall provide the

governor and the general assembly with an analysis of the reporting information furnished pursuant

to § 27-84-3. The report shall also include a review of the role of Pharmacy Benefit Managers in

the structure and cost of health insurance, a review of approaches to Pharmacy Benefit Manager

regulation in other states, and any recommended actions to improve the oversight of Pharmacy

Benefit Managers doing business in Rhode Island.

     (b) The health insurance commissioner may contract with actuaries and other subject

matter experts to assist the commissioner in conducting the study required under this section. The

actuaries and other experts shall serve under the direction of the health insurance commissioner.

Health insurance companies doing business in this state, including, but not limited to, nonprofit

hospital service corporations and nonprofit medical service corporations established pursuant to

chapters 19 and 20 of title 27, and health maintenance organizations established pursuant to chapter

41 of title 27, shall bear the cost of these actuaries and subject matter experts according to a

schedule of their direct writing of health insurance in this state as determined by the health

insurance commissioner. The amount to be invoiced to and paid by the above-described health

insurance companies doing business in this state for the study conducted under this section shall

not exceed a total of one hundred seventy-five thousand dollars ($175,000).

     27-84-5. Regulations.

     The health insurance commissioner may promulgate rules and regulations as are necessary

to carry out and effectuate the provisions of this chapter.

     SECTION 2. Sections 31-36-7 and 31-36-20 of the General Laws in Chapter 31-36 entitled

“Motor Fuel Tax” are hereby amended to read as follows:

     31-36-7. Monthly report of distributors — Payment of tax.

     (a) State requirements.

     (1) Every distributor shall, on or before the twentieth (20th) day of each month, render a

report to the tax administrator, upon forms to be obtained from the tax administrator, of the amount

(number of gallons) of fuels purchased, sold, or used by the distributor within this state and the

amount of fuels sold by the distributor without this state from fuels within this state during the

preceding calendar month, and, if required by the tax administrator as to purchases, the name or

names of the person or persons from whom purchased and the date and amount of each purchase,

and as to sales, the name or names of the person or persons to whom sold and the amount of each

sale, and shall pay at the same time to the administrator tax at the rate of thirty-two cents ($0.32)

per gallon on all taxable gallons of fuel sold or used in this state for periods ending on or before

June 30, 2025.

     (2) Every distributor shall, on or before the twentieth day of each month, render a report to

the tax administrator, upon forms to be obtained from the tax administrator, of the amount (number

of gallons) of fuels purchased, sold, or used by the distributor within this state and the amount of

fuels sold by the distributor without this state from fuels within this state during the preceding

calendar month, and, if required by the tax administrator as to purchases, the name or names of the

person or persons from whom purchased and the date and amount of each purchase, and as to sales,

the name or names of the person or persons to whom sold and the amount of each sale, and shall

pay at the same time to the administrator, tax at the rate of forty cents ($0.40) per gallon on all

taxable gallons of fuel sold or used in this state for periods beginning on or after July 1, 2025 and

ending on or before June 30, 2026.

     (3) Every distributor shall, on or before the twentieth day of each month, render a report to

the tax administrator, upon forms to be obtained from the tax administrator, of the amount (number

of gallons) of fuels purchased, sold, or used by the distributor within this state and the amount of

fuels sold by the distributor without this state from fuels within this state during the preceding

calendar month, and, if required by the tax administrator as to purchases, the name or names of the

person or persons from whom purchased and the date and amount of each purchase, and as to sales,

the name or names of the person or persons to whom sold and the amount of each sale, and shall

pay at the same time to the administrator, tax at the rate of thirty-eight cents ($0.38) per gallon on

all taxable gallons of fuel sold or used in this state for periods beginning on or after July 1, 2026.

     (b) Federal requirements. In the event the federal government requires a certain portion of

the gasoline tax to be dedicated for highway improvements, then the state controller is directed to

establish a restricted receipt account and deposit that portion of gasoline tax receipts which brings

the state into federal compliance.

     (1) Beginning July 1, 2015, and every other year thereafter, through June 30, 2025, the

gasoline tax shall be adjusted by the percentage of increase in the Consumer Price Index for all

Urban Consumers (CPI-U) as published by the United States Bureau of Labor Statistics determined

as of September 30 of the prior calendar year; said adjustment shall be rounded to the nearest one

cent ($.01) increment, provided that the total tax shall not be less than provided for in subsection

(a)(1).

     (2) Beginning July 1, 2027, and every other year thereafter, the gasoline tax shall be

adjusted by the percentage of increase in the Consumer Price Index for all Urban Consumers (CPI-

U) as published by the United States Bureau of Labor Statistics determined as of September 30 of

the two (2) prior calendar years; said adjustment shall be rounded to the nearest one cent ($0.01)

increment; provided that, the total tax shall not be less than provided for in subsection (a)(2)(3).

     31-36-20. Disposition of proceeds.

     (a) Disposition of proceeds.

     (1) Notwithstanding any other provision of law to the contrary, all moneys paid into the

general treasury under the provisions of this chapter or chapter 37 of this title, and title 46 shall be

applied to and held in a separate fund and be deposited in any depositories that may be selected by

the general treasurer to the credit of the fund, which fund shall be known as the Intermodal Surface

Transportation Fund; provided, that in fiscal year 2004 for the months of July through April six and

eighty-five hundredth cents ($0.0685) per gallon of the tax imposed and accruing for the liability

under the provisions of § 31-36-7, less refunds and credits, shall be transferred to the Rhode Island

public transit authority as provided under § 39-18-21. For the months of May and June in fiscal

year 2004, the allocation shall be five and five hundredth cents ($0.0505). Thereafter, until fiscal

year 2006, the allocation shall be six and twenty-five hundredth cents ($0.0625). For fiscal years

2006 through FY 2008, the allocation shall be seven and twenty-five hundredth cents ($0.0725);

provided, that expenditures shall include the costs of a market survey of non-transit users and a

management study of the agency to include the feasibility of moving the authority into the

department of transportation, both to be conducted under the auspices of the state budget officer.

The state budget officer shall hire necessary consultants to perform the studies, and shall direct

payment by the authority. Both studies shall be transmitted by the budget officer to the 2006 session

of the general assembly, with comments from the authority. For fiscal year 2009, the allocation

shall be seven and seventy-five hundredth cents ($0.0775), of which one-half cent ($0.005) shall

be derived from the one cent ($0.01) per gallon environmental protection fee pursuant to § 46-12.9-

11. For fiscal years 2010 through fiscal year 2025, the allocation shall be nine and seventy-five

hundredth cents ($0.0975), of which one-half cent ($0.005) shall be derived from the one cent

($0.01) per gallon environmental protection fee pursuant to § 46-12.9-11. For fiscal years 2026 and

thereafter, the allocation shall be eleven and seventy-five hundredths cents ($0.1175) of which one-

half cent ($0.005) shall be derived from the one cent ($0.01) per gallon environmental protection

fee pursuant to § 46-12.9-11. One cent ($0.01) per gallon shall be transferred to the elderly/disabled

transportation program of the department of human services, and the remaining cents per gallon

shall be available for general revenue as determined by the following schedule:

     (i) For the fiscal year 2000, three and one-fourth cents ($0.0325) shall be available for

general revenue.

     (ii) For the fiscal year 2001, one and three-fourth cents ($0.0175) shall be available for

general revenue.

     (iii) For the fiscal year 2002, one-fourth cent ($0.0025) shall be available for general

revenue.

     (iv) For the fiscal year 2003, two and one-fourth cent ($0.0225) shall be available for

general revenue.

     (v) For the months of July through April in fiscal year 2004, one and four-tenths cents

($0.014) shall be available for general revenue. For the months of May through June in fiscal year

2004, three and two-tenths cents ($0.032) shall be available for general revenue, and thereafter,

until fiscal year 2006, two cents ($0.02) shall be available for general revenue. For fiscal year 2006

through fiscal year 2009 one cent ($0.01) shall be available for general revenue.

     (2) All deposits and transfers of funds made by the tax administrator under this section,

including those to the Rhode Island public transit authority, the department of human services, the

Rhode Island turnpike and bridge authority, and the general fund, shall be made monthly and

credited and paid by the general treasurer to the designated fund in accordance with this section.

     (3) Commencing in fiscal year 2004, the director of the Rhode Island department of

transportation is authorized to remit, on a monthly or less frequent basis as shall be determined by

the director of the Rhode Island department of transportation, or the director’s designee, or at the

election of the director of the Rhode Island department of transportation, with the approval of the

director of the department of administration, to an indenture trustee, administrator, or other third-

party fiduciary, in an amount not to exceed two cents ($0.02) per gallon of the gas tax imposed, in

order to satisfy debt service payments on aggregate bonds issued pursuant to a joint resolution and

enactment approving the financing of various department of transportation projects adopted during

the 2003 session of the general assembly, and approved by the governor.

     (4) Commencing in fiscal year 2015, three and one-half cents ($0.035) shall be transferred

to the Rhode Island turnpike and bridge authority to be used for maintenance, operations, capital

expenditures, and debt service on any of its projects as defined in chapter 12 of title 24 in lieu of a

toll on the Sakonnet River Bridge. The Rhode Island turnpike and bridge authority is authorized to

remit to an indenture trustee, administrator, or other third-party fiduciary any or all of the foregoing

transfers in order to satisfy and/or secure its revenue bonds and notes and/or debt service payments

thereon, including, but not limited to, the bonds and notes issued pursuant to the Joint Resolution

set forth in Section 3 of Article 6 of Chapter 23 of the Public Laws of 2010. Notwithstanding any

other provision of said joint resolution, the Rhode Island turnpike and bridge authority is expressly

authorized to issue bonds and notes previously authorized under said joint resolution for the

purpose of financing all expenses incurred by it for the formerly authorized tolling of the Sakonnet

River Bridge and the termination thereof.

     (b) Notwithstanding any other provision of law to the contrary, all other funds in the fund

shall be dedicated to the department of transportation, subject to annual appropriation by the general

assembly. The director of transportation shall submit to the general assembly, budget office, and

office of the governor annually an accounting of all amounts deposited in and credited to the fund

together with a budget for proposed expenditures for the succeeding fiscal year in compliance with

§§ 35-3-1 and 35-3-4. On order of the director of transportation, the state controller is authorized

and directed to

     draw their orders upon the general treasurer for the payments of any sum or portion of the

sum that may be required from time to time upon receipt of properly authenticated vouchers.

     (c) At any time the amount of the fund is insufficient to fund the expenditures of the

department of transportation, not to exceed the amount authorized by the general assembly, the

general treasurer is authorized, with the approval of the governor and the director of administration,

in anticipation of the receipts of monies enumerated in this section to advance sums to the fund, for

the purposes specified in this section, any funds of the state not specifically held for any particular

purpose. However, all the advances made to the fund shall be returned to the general fund

immediately upon the receipt by the fund of proceeds resulting from the receipt of monies to the

extent of the advances.

     SECTION 3. Section 39-1-27.7 of the General Laws in Chapter 39-1 entitled "Public

Utilities Commission" is hereby amended to read as follows:

     39-1-27.7. System reliability and least-cost procurement.

     (a) Least-cost procurement shall comprise system reliability and energy efficiency and

conservation procurement, as provided for in this section, and supply procurement, as provided for

in § 39-1-27.8, as complementary but distinct activities that have as common purpose meeting

electrical and natural gas energy needs in Rhode Island, in a manner that is optimally cost-effective,

reliable, prudent, and environmentally responsible.

     (b) The commission shall establish not later than June 1, 2008, standards for system

reliability and energy efficiency and conservation procurement that shall include standards and

guidelines for:

     (1) System reliability procurement, including but not limited to:

     (i) Procurement of energy supply from diverse sources, including, but not limited to,

renewable energy resources as defined in chapter 26 of this title;

     (ii) Distributed generation, including, but not limited to, renewable energy resources and

thermally leading combined heat and power systems, that is reliable and is cost-effective, with

measurable, net system benefits;

     (iii) Demand response, including, but not limited to, distributed generation, back-up

generation, and on-demand usage reduction, that shall be designed to facilitate electric customer

participation in regional demand response programs, including those administered by the

independent service operator of New England (“ISO-NE”), and/or are designed to provide local

system reliability benefits through load control or using on-site generating capability;

     (iv) To effectuate the purposes of this division, the commission may establish standards

and/or rates (A) For qualifying distributed generation, demand response, and renewable energy

resources; (B) For net metering; (C) For back-up power and/or standby rates that reasonably

facilitate the development of distributed generation; and (D) For such other matters as the

commission may find necessary or appropriate.

     (2) Least-cost procurement, which shall include procurement of energy efficiency and

energy conservation measures that are prudent and reliable and when such measures are lower cost

than acquisition of additional supply, including supply for periods of high demand.

     (c) The standards and guidelines provided for by subsection (b) shall be subject to periodic

review and as appropriate amendment by the commission, which review will be conducted not less

frequently than every three (3) years after the adoption of the standards and guidelines.

     (d) To implement the provisions of this section:

     (1) The commissioner of the office of energy resources and the energy efficiency and

resources management council, either jointly or separately, shall provide the commission findings

and recommendations with regard to system reliability and energy efficiency and conservation

procurement on or before March 1, 2008, and triennially on or before March 1 thereafter through

March 1, 2028 March 1, 2038. The report shall be made public and be posted electronically on the

website of the office of energy resources.

     (2) The commission shall issue standards not later than June 1, 2008, with regard to plans

for system reliability and energy efficiency and conservation procurement, which standards may

be amended or revised by the commission as necessary and/or appropriate.

     (3) The energy efficiency and resources management council shall prepare by July 15,

2008, a reliability and efficiency procurement opportunity report that shall identify opportunities

to procure efficiency, distributed generation, demand response, and renewables and that shall be

submitted to the electrical distribution company, the commission, the office of energy resources,

and the joint committee on energy.

     (4) (3) Each electrical and natural gas distribution company shall submit to the commission

on or before September 1, 2008, and triennially on or before September 1 thereafter through

September 1, 2028 2038, a plan for system reliability and energy efficiency and conservation

procurement. In developing the plan, the distribution company may seek the advice of consult with

the division, the commissioner and the council. The plan shall include measurable goals and target

percentages for each energy resource, pursuant to standards established by the commission,

including efficiency, distributed generation, demand response, combined heat and power, and

renewables. The plan shall be made public and be posted electronically on the website of the office

of energy resources, and shall also be submitted to the general assembly.

     (5) (4) The commission shall issue an order approving all energy-efficiency measures that

are cost-effective and lower cost than acquisition of additional supply, with regard to the plan from

the electrical and natural gas distribution company, and reviewed and approved by the energy

efficiency and resources management council, and any related annual triennial plans, and shall

approve a fully reconciling funding mechanism to annually fund investments in all efficiency

measures that are cost-effective and lower cost than acquisition of additional supply, not greater

than sixty (60) days after it is filed with the commission.

     (6)(i) Each electrical and natural gas distribution company shall provide a status report,

which shall be public, on the implementation of least-cost procurement on or before December 15,

2008, and on or before February 1, 2009, to the commission, the division, the commissioner of the

office of energy resources, and the energy efficiency and resources management council which

may provide the distribution company recommendations with regard to effective implementation

of least-cost procurement. The report shall include the targets for each energy resource included in

the order approving the plan and the achieved percentage for energy resource, including the

achieved percentages for efficiency, distributed generation, demand response, combined heat and

power, and renewables, as well as the current funding allocations for each eligible energy resource

and the businesses and vendors in Rhode Island participating in the programs. The report shall be

posted electronically on the website of the office of energy resources.

     (5)(ii) Beginning on November 1, 2012, or before, each electric distribution company shall

support the installation and investment in clean and efficient combined heat and power installations

at commercial, institutional, municipal, and industrial facilities. This support shall be documented

annually triennially in the electric distribution company’s energy-efficiency program plans. In

order to effectuate this provision, the energy efficiency and resource management council shall

seek input from the public, the gas and electric distribution company, the commerce corporation,

and commercial and industrial users, and make recommendations regarding services to support the

development of combined heat and power installations in the electric distribution company’s annual

and triennial energy-efficiency program plans.

     (iii) The energy-efficiency annual triennial plan shall include, but not be limited to, a plan

for identifying and recruiting qualified combined heat and power projects, incentive levels, contract

terms and guidelines, and achievable megawatt targets for investments in combined heat and power

systems. In the development of the plan, the energy efficiency and resource management council

and the electric distribution company shall factor into the combined heat and power plan and

program, the following criteria: (A) Economic development benefits in Rhode Island, including

direct and indirect job creation and retention from investments in combined heat and power

systems; (B) Energy and cost savings for customers; (C) Energy supply costs; (D) Greenhouse gas

emissions standards and air quality benefits; and (E) System reliability benefits.

     (iv iii) The energy efficiency and resource management council shall conduct at least one

public review meeting annually triennially, to discuss and review the combined heat and power

program, with at least seven (7) business days’ notice, prior to the electric and gas distribution

utility submitting the plan to the commission. The commission shall evaluate the submitted

combined heat and power program as part of the annual triennial energy-efficiency plan. The

commission shall issue an order approving the energy-efficiency plan and programs within sixty

(60) days of the filing.

     (e) If the commission shall determine that the implementation of system reliability and

energy efficiency and conservation procurement has caused, or is likely to cause, under or over-

recovery of overhead and fixed costs of the company implementing the procurement, the

commission may establish a mandatory rate-adjustment clause for the company so affected in order

to provide for full recovery of reasonable and prudent overhead and fixed costs.

     (f) The commission shall conduct a contested case proceeding to establish a performance-

based incentive plan that allows for additional compensation for each electric distribution company

and each company providing gas to end-users and/or retail customers based on the level of its

success in mitigating the cost and variability of electric and gas services through procurement

portfolios the sharing of net benefits based on a set of prioritized benefit categories that maximizes

electric and gas ratepayer savings.

     (g) Any cumulative direct bill charge to fund the triennial program for the 2027 through

2029 electric and gas energy efficiency plan shall not exceed seventy-five million dollars

($75,000,000) in each year of the plan. In the years following the adoption of the 2027–2029

triennial plan, the Commission may adjust the direct bill charge amounts approved in such plan;

provided, however, that any such adjustment shall not exceed the seasonally-adjusted percentage

change for the third year of the immediately preceding triennial plan for the energy expenditure

category in the Consumer Price Index for All Urban Consumers (CPI-U) as published by the United

States Bureau of Labor Statistics, over the applicable three-year planning period.

     (g)(1) The office of energy resources shall conduct a study and analysis of the electric and

gas distribution company’s state energy efficiency programs that will examine implemented

program and planned conservation measures and review and confirm the claimed energy savings.

In carrying out this study, the office shall utilize a representative sample of different customer

classes and measures that have and/or will be participating in the state energy efficiency programs.

At a minimum, the study performed by the office of energy resources shall include the following

in its scope of work:

     (i) Independently review and summarize the electric and gas distribution company process

for incorporating results from completed evaluation studies into ongoing energy efficiency program

reporting and implementation.

     (ii) Conduct an independent review of gas and electricity efficiency programs, which may

include billing analysis techniques. The scope and subjects of this analysis will be decided by the

working group with input and advice from an independent consultant. The analysis will be

conducted by a qualified independent consultant using industry accepted methods.

     (iii) Review the data-collection practices, including metering equipment used; sampling

frequency; sample sizes; and data validation procedures, and the methods for data analysis

employed, as deemed appropriate by the independent evaluator.

     (iv) Study results and recommendations will be presented to the public utilities commission

and the energy efficiency and resource management council.

     (2) The office of energy resources shall consult with the working group in development of

the request for proposals (RFP), and during the course of the study, including the preliminary study

results. The working group shall be comprised of one representative from each of the following

groups chosen by the office of energy resources:

     (i) Large commercial and industrial energy users;

     (ii) Small business energy users;

     (iii) Residential energy users;

     (iv) Municipal and state energy users;

     (v) Low-income energy users;

     (vi) Electric and gas distribution company; and

     (vii) Energy efficiency and resource management council.

     (3) The office of energy resources, in consultation with the electric and gas distribution

company and representatives referenced in subsection (g)(2), shall be authorized to hire an energy

consulting company or firm to carry out the energy efficiency verification study. The costs

associated with this study, including, but not limited to, those associated with the consultant or firm

contract and reasonable administrative costs incurred by the office in the execution of subsection

(g) of this section, shall be recoverable through the system benefit charge subject to commission

approval. Funding shall be transferred from the electric and gas distribution utility to the office of

energy resources upon request by the office.

     (4) The office of energy resources shall submit this report on or before October 30, 2019,

to the governor, the president of the senate, and the speaker of the house. The office and its selected

energy consulting company or firm shall host two (2) public presentations on the preliminary and

final results of the study.

     SECTION 4. Chapter 39-2 of the General Laws entitled “Duties of Utilities and Carriers”

is hereby amended by adding thereto the following section:

     39-2-29. In-state transmission owner required to participate in the regional

independent system operator.

     On and after the effective date of this section, no electric distribution company, as defined

in § 39-1-2, shall own, operate, or control a transmission facility, as defined in § 39-1-2, located in

the state unless such company joins or is a member of ISO New England, Inc. or its successor

organization as approved by the federal energy regulatory commission.

     SECTION 5. 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) thirty (30) 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 programs shall remain in effect until December 31, 2028 2031. 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

     (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) thirty-one (31) 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

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 July 1 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.

     (n) (l) Effective January 1, 20227, the commission shall allocate, from demand-side

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

($5,000,000) two million five hundred thousand dollars ($2,500,000) 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) (m) 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-

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

overall annual triennial 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 annually collect and transfer the gas and electric energy efficiency funds

to the third-party administrator for each year of the annual triennial state energy efficiency program

beginning with the program year and thereafter for the remaining program years. The gas and

electric distribution company shall annually transfer the annual triennial administrative funds to the

office of energy resources and energy efficiency and resource management council.

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

programs then they it shall be required to develop and design the annual triennial 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 triennial program plan to with the public

utilities commission for review and a decision.

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

program plan to with the public utilities commission for review and approval no later than

September June 30, 2024, and annually triennially 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.

     SECTION 6. Section 39-2.2-2 of the General Laws in Chapter 39-2.2 entitled "Rhode

Island Utility Fair Share Roadway Repair Act" is hereby amended to read as follows:

     39-2.2-2. Road repair by public utility or utility facility.

     (a) Any public utility as defined by § 39-1-2 or any utility facility as defined by chapter 8.1

of title 24 that shall alter, excavate, disrupt, or disturb a roadway shall be responsible for complete

repaving and repair of the roadway from curbline to curbline or as required in accordance with the

state or municipal utility permit requirements.

     (b) Any public utility as defined by § 39-1-2 or any utility facility as defined by chapter

8.1 of title 24 shall recover all costs required of this chapter in accordance with generally accepted

accounting principles.

     SECTION 7. Chapter 39-26 entitled “Renewable Energy Standard” is hereby amended by

adding thereto the following section:

     39-26-5.1. Zero-emission resources.

     (a) Zero-emission resources are:

     (1) Nuclear energy resources, meaning electricity generated by a nuclear fission or nuclear

fusion facility that is licensed by the United States Nuclear Regulatory Commission or its successor,

and that produces no direct emissions of greenhouse gases or criteria air pollutants at the point of

generation.

     (2) Large-scale hydroelectric facilities, meaning hydroelectric generation units that are not

“small hydro facilities” as defined in § 39-26-2, that generate electricity through the conversion of

the energy of flowing or falling water and that produce no direct emissions of greenhouse gases or

criteria air pollutants at the point of generation.

     (b) For the purposes of the regulations promulgated under this chapter, eligible zero-

emission energy resources are generation units in the NEPOOL control area using zero-emission

energy resources as defined in this section.

     (c) A generation unit located in an adjacent control area outside of the NEPOOL may

qualify as an eligible zero-emission energy resource, but the associated generation attributes shall

be applied to any zero-emission standard established under this chapter only to the extent that the

energy produced by the generation unit is actually delivered into NEPOOL for consumption by

New England customers. The delivery of the energy from the generation unit into NEPOOL must

be demonstrated by:

     ​(1) A unit-specific bilateral contract for the sale and delivery of such energy into NEPOOL;

and

     (2) Confirmation from ISO-New England that the zero-emission energy was actually

settled in the NEPOOL system; and

     (3) Confirmation through the North American Electric Reliability Corporation tagging

system, or its successor, that the import of the energy into NEPOOL actually occurred; or

     (4) Any such other requirements as the commission deems appropriate.

     (d) NE-GIS certificates associated with energy production from off-grid generation and

customer-sited generation facilities certified by the commission as eligible zero-emission energy

resources may also be used to demonstrate compliance with any zero-emission standard.

     SECTION 8. Sections 39-26-2, 39-26-4, 39-26-6, and 39-26-7 of the General Laws in

Chapter 39-2 entitled "Renewable Energy Standard" are hereby amended to read as follows:

     39-26-2. Definitions.

     When used in this chapter:

     (1) “Alternative compliance payment” means a payment to the renewable energy

development fund of fifty dollars ($50.00) per megawatt-hour of renewable energy obligation, in

2003 dollars, adjusted annually up or down by the consumer price index, which may be made in

lieu of standard means of compliance with this statute.

     (1) “Alternative compliance payment” means a payment made in lieu standard means of

compliance with this statute, as follows:

     (i) For new renewable energy and zero-emission resources, an alternative compliance

payment of forty dollars ($40.00) per megawatt-hour of renewable energy obligation.

     (ii) For existing renewable energy and zero-emission resources, an alternative compliance

payment of eleven dollars ($11.00) per megawatt-hour of renewable energy obligation.

     (iii) All such payments shall be deposited into the renewable energy development fund and

distributed in accordance with § 39-26-7(10).

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

     (3) “Compliance year” means a calendar year beginning January 1 and ending December

31, for which an obligated entity must demonstrate that it has met the requirements of this statute.

     (4) “Customer-sited generation facility” means a generation unit that is interconnected on

the end-use customer’s side of the retail electricity meter in such a manner that it displaces all or

part of the metered consumption of the end-use customer.

     (5) “Electrical energy product” means an electrical energy offering, including, but not

limited to, last-resort and standard-offer service, that can be distinguished by its generation

attributes or other characteristics, and that is offered for sale by an obligated entity to end-use

customers.

     (6) “Eligible biomass fuel” means fuel sources including brush, stumps, lumber ends and

trimmings, wood pallets, bark, wood chips, shavings, slash, and other clean wood that is not mixed

with other solid wastes; agricultural waste, food, and vegetative material; energy crops; landfill

methane; biogas; or neat biodiesel and other neat liquid fuels that are derived from such fuel

sources.

     (7) “Eligible renewable energy and zero-emission resource” means resources as defined in

§ 39-26-5 and § 39-26-5.1.

     (8) “End-use customer” means a person or entity in Rhode Island that purchases electrical

energy at retail from an obligated entity.

     (9) “Existing renewable energy and zero-emission resources” means generation units using

eligible renewable energy and zero-emission resources and first going into commercial operation

before December 31, 1997.

     (10) “Generation attributes” means the nonprice characteristics of the electrical energy

output of a generation unit including, but not limited to, the unit’s fuel type, emissions, vintage,

and policy eligibility.

     (11) “Generation unit” means a facility that converts a fuel or an energy resource into

electrical energy.

     (12) “High-heat medical waste processing facility” means a facility that:

     (i) Generates electricity from the combustion, gasification, or pyrolysis of regulated

medical waste;

     (ii) Generates electricity from the combustion of fuel derived from the gasification or

pyrolysis of regulated medical waste; or

     (iii) Disposes of, processes, or treats regulated medical waste through combustion,

gasification, pyrolysis, or any process that exposes waste to temperatures above four hundred

degrees Fahrenheit (400ºF).

     (13) “NE-GIS” means the generation information system operated by NEPOOL, its

designee or successor entity, that includes a generation information database and certificate system,

and that accounts for the generation attributes of electrical energy consumed within NEPOOL.

     (14) “NE-GIS certificate” means an electronic record produced by the NE-GIS that

identifies the relevant generation attributes of each megawatt-hour accounted for in the NE-GIS.

     (15) “NEPOOL” means the New England Power Pool or its successor.

     (16) “New renewable energy and zero-emission resources” means generation units using

eligible renewable energy and zero-emission resources and first going into commercial operation

after December 31, 1997; or the incremental output of generation units using eligible renewable

energy and zero-emission resources that have demonstrably increased generation in excess of ten

percent (10%) using eligible renewable energy and zero-emission resources through capital

investments made after December 31, 1997; but in no case involve any new impoundment or

diversion of water with an average salinity of twenty (20) parts per thousand or less.

     (17) “Obligated entity” means a person or entity who or that sells electrical energy to end-

use customers in Rhode Island, including, but not limited to: nonregulated power producers and

electric utility distribution companies, as defined in § 39-1-2, supplying standard-offer service, last-

resort service, or any successor service to end-use customers, including Narragansett Electric, but

not to include Block Island Power Company as described in § 39-26-7 or Pascoag Utility District.

     (18) “Off-grid generation facility” means a generation unit that is not connected to a utility

transmission or distribution system.

     (19) “Renewable energy and zero-emission resource” means any one or more of the

renewable energy and zero-emission resources described in § 39-26-5(a) and § 39-26-5.1.

     (20) “Reserved certificate” means a NE-GIS certificate sold independent of a transaction

involving electrical energy, pursuant to Rule 3.4 or a successor rule of the operating rules of the

NE-GIS.

     (21) “Reserved certificate account” means a specially designated account established by

an obligated entity, pursuant to Rule 3.4 or a successor rule of the operating rules of the NE-GIS,

for transfer and retirement of reserved certificates from the NE-GIS.

     (22) “Self-generator” means an end-use customer in Rhode Island that displaces all or part

of its retail electricity consumption, as metered by the distribution utility to which it interconnects,

through the use of a customer-sited generation facility, and the ownership of any such facility shall

not be considered an obligated entity as a result of any such ownership arrangement.

     (23) “Small hydro facility” means a facility employing one or more hydroelectric turbine

generators and with an aggregate capacity not exceeding thirty megawatts (30 MW). For purposes

of this definition, “facility” shall be defined in a manner consistent with Title 18 of the Code of

Federal Regulations, section 292.204; provided, however, that the size of the facility is limited to

thirty megawatts (30 MW), rather than eighty megawatts (80 MW).

     39-26-4. Renewable energy standard.

     (a) Starting in compliance year 2007, all obligated entities shall obtain at least three percent

(3%) of the electricity they sell at retail to Rhode Island end-use customers, adjusted for electric

line losses, from eligible renewable energy and zero-emission resources, escalating, according to

the following schedule:

     (1) At least three percent (3%) of retail electricity sales in compliance year 2007;

     (2) An additional one-half of one percent (0.5%) of retail electricity sales in each of the

following compliance years 2008, 2009, 2010;

     (3) An additional one percent (1%) of retail electricity sales in each of the following

compliance years 2011, 2012, 2013, 2014, provided that the commission has determined the

adequacy, or potential adequacy, of renewable and zero-emission energy supplies to meet these

percentage requirements;

     (4) An additional one and one-half percent (1.5%) of retail electricity sales in each of the

following compliance years 2015, 2016, 2017, 2018, 2019, 2020, 2021, and 2022;

     (5) [Deleted by P.L. 2016, ch. 144, § 1 and P.L. 2016, ch. 155, § 1.]

     (6) An additional four percent (4%) of retail electricity sales in 2023;

     (7) An additional five percent (5%) of retail electricity sales in 2024;

     (8) An additional six percent (6%) of retail electricity sales in 2025;

     (9) An additional seven percent (7%) of retail electricity sales in 2026 and 2027;

     (10) An additional seven and one-half percent (7.5%) of retail electricity sales in 2028;

     (11) An additional eight percent (8%) of retail electricity sales in 2029;

     (12) An additional eight and one-half percent (8.5%) of retail electricity sales in 2030;

     (13) An additional nine percent (9%) of retail electricity sales in 2031; and

     (14) An additional nine and one-half percent (9.5%) of retail electricity sales in 2032 and

2033 to achieve the goal that one hundred percent (100%) of Rhode Island’s electricity demand is

from renewable energy by 2033 and each year thereafter.

     (10) Starting in compliance year 2027, all obligated entities shall obtain at least thirty-five

percent (35%) of the electricity they sell at retail to Rhode Island end-use customers, adjusted for

electric line losses, from eligible renewable energy and zero-emission resources, escalating,

according to the following schedule:

     (11) An additional one percent (1%) of retail electricity sales in each of compliance years

2028, 2029, 2030, and 2031;

     (12) An additional two percent (2%) of retail electricity sales in each of compliance years

2032, 2033, 2034, 2035, and 2036;

     (13) An additional three percent (3%) of retail electricity sales in each of compliance years

2037, 2038, 2039, 2040, 2041, 2042, and 2043;

     (13) An additional four percent (4%) of retail electricity sales in each of compliance years

2044, 2045, 2046, 2047, and 2048;

     (14) An additional five percent (5%) of retail electricity sales in each of compliance years

2049 and 2050 to achieve one hundred percent (100%) of Rhode Island’s electricity demand is

from renewable energy and zero-emission resources by 2050 and each year thereafter.

     (b) For each obligated entity and in each compliance year, the amount of retail electricity

sales used to meet obligations under this statute that are derived from existing renewable energy

and zero-emission resources shall not exceed two percent (2%) twenty-five percent (25%) of total

retail electricity sales.

     (c) The minimum renewable energy percentages set forth in subsection (a) shall be met for

each electrical energy product offered to end-use customers, in a manner that ensures that the

amount of renewable energy of end-use customers voluntarily purchasing renewable energy is not

counted toward meeting such percentages. Notwithstanding the foregoing, municipalities engaged

in aggregation pursuant to § 39-3-1.2 may include in their aggregation plan terms that would allow

voluntary renewable energy products to be counted toward meeting such percentages. In 2024, the

commission, with input from the office of energy resources, division of public utilities and carriers,

obligated entities, other market participants, and the public, shall assess the impact of allowing

voluntary renewable energy purchases to be counted toward meeting the annual percentages. The

commission shall submit a report of its findings and recommendations to the governor, speaker of

the house, and senate president no later than September 1, 2024.

     (d) To the extent consistent with the requirements of this chapter, compliance with the

renewable energy standard may be demonstrated through procurement of NE-GIS certificates

relating to generating units certified by the commission as using eligible renewable energy and

zero-emission sources, as evidenced by reports issued by the NE-GIS administrator. Procurement

of NE-GIS certificates from off-grid and customer-sited generation facilities, verified by the

commission as eligible renewable energy and zero-emission resources, may also be used to

demonstrate compliance. With the exception of contracts for generation supply entered into prior

to 2002, initial title to NE-GIS certificates from off-grid and customer-sited generation facilities

and from all other eligible renewable energy and zero-emission resources, shall accrue to the owner

of such a generation facility, unless such title has been explicitly deemed transferred pursuant to

contract or regulatory order.

     (e) In lieu of providing NE-GIS certificates pursuant to subsection (d) of this section, an

obligated entity may also discharge all or any portion of its compliance obligations by making an

alternative compliance payment to the renewable energy development fund established pursuant to

§ 39-26-7.

     (f) Retail electricity sales pursuant to a nonregulated power producer’s supply contract that

was executed prior to July 1, 2022, shall be required to obtain an additional one and one-half percent

(1.5%) of retail electricity sales each year and are exempted from the requirements of subsections

(a)(6) through (a)(14) of this section until the end date of the term of the nonregulated power

producer’s supply contract.

     39-26-6. Duties of the commission.

     (a) The commission shall:

     (1) Develop and adopt regulations on or before December 31, 2005, for implementing a

renewable energy standard, which regulations shall include, but be limited to, provisions for:

     (i) Verifying the eligibility of renewable energy and zero-emission generators and the

production of energy from such generators, including requirements to notify the commission in the

event of a change in a generator’s eligibility status;

     (ii) Standards for contracts and procurement plans for renewable energy and zero-emission

resources to achieve the purposes of this chapter;

     (iii) Flexibility mechanisms for the purposes of easing compliance burdens; facilitating

bringing new renewable and zero-emission resources on-line; and avoiding and/or mitigating

conflicts with state-level source disclosure requirements and green marketing claims throughout

the region; which flexibility mechanisms shall allow obligated entities to: (A) Demonstrate

compliance over a compliance year; and (B) Bank excess compliance for two (2) three (3)

subsequent compliance years, capped at thirty percent (30%) of the current year’s obligation; and

     (iv) Annual compliance filings to be made by all obligated entities within one month after

NE-GIS reports are available for the fourth (4th) quarter of each calendar year. All electric-utility-

distribution companies shall cooperate with the commission in providing data necessary to assess

the magnitude of obligation and verify the compliance of all obligated entities.

     (2) Authorize rate recovery by electric-utility-distribution companies of all prudent

incremental costs arising from the implementation of this chapter, including, without limitation:

the purchase of NE-GIS certificates, including certificates from zero-emission resources; the

payment of alternative compliance payments; required payments to support the NE-GIS;

assessments made pursuant to § 39-26-7(c); and the incremental costs of complying with energy

source disclosure requirements.

     (3) Certify eligible renewable energy and zero-emission resources by issuing statements of

qualification within ninety (90) days of application. The commission shall provide prospective

reviews for applicants seeking to determine whether a facility would be eligible.

     (4) [Deleted by P.L. 2022, ch. 218, § 1 and P.L. 2022, ch. 226, § 1.]

     (5) Establish sanctions for those obligated entities that, after investigation, have been found

to fail to reasonably comply with the commission’s regulations. No sanction or penalty shall relieve

or diminish an obligated entity from liability for fulfilling any shortfall in its compliance obligation;

provided, however, that no sanction shall be imposed if compliance is achieved through alternative

compliance payments. The commission may suspend or revoke the certification of generation units,

certified in accordance with subsection (a)(3) of this section, that are found to provide false

information or that fail to notify the commission in the event of a change in eligibility status or

otherwise comply with its rules. Financial penalties resulting from sanctions from obligated entities

shall not be recoverable in rates.

     (6) Report, by February 15, 2006, and by February 15 each year thereafter, to the governor,

the speaker of the house, and the president of the senate on the status of the implementation of the

renewable energy standards in Rhode Island and other states, and which report shall include in

2009, and each year thereafter, the level of use of renewable energy certificates by eligible

renewable energy and zero-emission resources, and the portion of renewable energy standards met

through alternative compliance payments, and the amount of rate increases authorized pursuant to

subsection (a)(2) of this section.

     (b) Consistent with the public policy objective of developing renewable and zero-emission

generation as an option in Rhode Island, and subject to the review and approval of the commission,

the electric distribution company is authorized to propose and implement pilot programs to own

and operate no more than fifteen megawatts (15 MW) of renewable- and zero-emission generation

demonstration projects in Rhode Island and may include the costs and benefits in rates to

distribution customers. At least two (2) demonstration projects shall include renewable generation

installed at, or in the vicinity of nonprofit, affordable-housing projects where energy savings

benefits are provided to reduce electric bills of the customers at the nonprofit, affordable-housing

projects. Any renewable- and zero-emission generation proposals shall be subject to the review and

approval of the commission. The commission shall annually make an adjustment to the minimum

amounts required under the renewable energy standard under this chapter in an amount equal to the

kilowatt hours generated by such units owned by the electric distribution company. The electric

and gas distribution company shall also be authorized to propose and implement smart-metering

and smart-grid demonstration projects in Rhode Island, subject to the review and approval of the

commission, in order to determine the effectiveness of such new technologies for reducing and

managing energy consumption, and may include the costs of such demonstration projects in

distribution rates to electric customers to the extent the project pertains to electricity usage and in

distribution rates to gas customers to the extent the project pertains to gas usage.

     39-26-7. Renewable energy development fund.

     (a) There is hereby authorized and created within the Rhode Island commerce corporation

a renewable energy development fund for the purpose of increasing the supply of NE-GIS

certificates available for compliance in future years by obligated entities with renewable energy

standard requirements, as established in this chapter. The fund shall be located at the Rhode Island

commerce corporation. The Rhode Island commerce corporation shall administer the fund and

adopt plans and guidelines for the management and use of the fund in coordination with the office

of energy resources and the Rhode Island infrastructure bank.

     (b) The Rhode Island commerce corporation shall enter into agreements with obligated

entities to accept alternative compliance payments, consistent with rules of the commission and the

purposes set forth in this section; and alternative compliance payments received pursuant to this

section shall be trust funds to be held and applied solely for the purposes set forth in this section.

     (c) The uses of the fund shall include but not be limited to:

     (1) Stimulating investment in renewable energy development by entering into agreements,

including multiyear agreements, for renewable energy certificates;

     (2) Establishing and maintaining a residential renewable energy program using eligible

technologies in accordance with § 39-26-5;

     (3) Providing technical and financial assistance to municipalities for interconnection and

feasibility studies, and/or the installation of renewable energy projects;

     (4) Implementing and supporting commercial and residential property assessed clean-

energy projects;

     (5) Clean transportation, including electric vehicles and charging infrastructure stations;

     (6) Energy storage projects;

     (5) (7) Issuing assurances and/or guarantees to support the acquisition of renewable energy

certificates and/or the development of new renewable energy sources for Rhode Island;

     (6) (8) Establishing escrows, reserves, and/or acquiring insurance for the obligations of the

fund;

     (7) (9) Paying administrative costs of the fund incurred by the Rhode Island commerce

corporation, the Rhode Island infrastructure bank, and the office of energy resources, not to exceed

ten percent (10%) of the income of the fund, including, but not limited to, alternative compliance

payments. All funds transferred from the Rhode Island commerce corporation to support the office

of energy resources’ administrative costs shall be deposited as restricted receipts.

     (d) All applications received for the use of the fund shall be reviewed by the Rhode Island

commerce corporation in consultation with the office of energy resources and the Rhode Island

infrastructure bank.

     (e) NE-GIS certificates acquired through the fund may be conveyed to obligated entities or

may be credited against the renewable energy standard for the year of the certificate provided that

the commission assesses the cost of the certificates to the obligated entity, or entities, benefiting

from the credit against the renewable energy standard, which assessment shall be reduced by

previously made alternative compliance payments and shall be paid to the fund.

     (10) Effective January 1, 2027, fifty percent (50%) of all alternative compliance payment

revenues shall be transferred to the electric distribution company, with oversight and approval of

the office of energy resources, for the purpose of providing direct rate relief, to be applied as bill

credits to all ratepayer accounts. The electric distribution company shall file a proposed direct rate

relief plan with the Public Utilities Commission for review and approval no later than sixty (60)

days after receipt of such funds.

     (11) All expenditures, contracts, grants, and other programmatic activities undertaken

using monies pursuant to this section shall be subject to the prior review and approval of the office

of energy resources.

     SECTION 9. Section 39-26.1-4 of the General Laws in Chapter 39-26.1 entitled "Long-

Term Contracting Standard for Renewable Energy" is hereby repealed.

     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

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, 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 10. Section 39-26.4-2 of the General Laws in Chapter 39-26.4 entitled "Net

Metering” is hereby amended to read as follows:

     39-26.4-2. Definitions.

     Terms not defined in this section herein shall have the same meaning as contained in

chapter 26 of this title. When used in this chapter:

     (1) “Community remote net-metering system” means a facility generating electricity using

an eligible net-metering resource that allocates net-metering credits to a minimum of one account

for a system associated with low- or moderate-income housing eligible credit recipients, or three

(3) eligible credit-recipient customer accounts, provided that no more than fifty percent (50%) of

the credits produced by the system are allocated to one eligible credit recipient, and provided further

at least fifty percent (50%) of the credits produced by the system are allocated to the remaining

eligible credit recipients in an amount not to exceed that which is produced annually by twenty-

five kilowatt (25 KW) AC capacity. The community remote net-metering system may transfer

credits to eligible credit recipients in an amount that is equal to or less than the sum of the usage of

the eligible credit recipient accounts measured by the three-year (3) average annual consumption

of energy over the previous three (3) years. A projected annual consumption of energy may be used

until the actual three-year (3) average annual consumption of energy over the previous three (3)

years at the eligible credit recipient accounts becomes available for use in determining eligibility

of the generating system. The community remote net-metering system may be owned by the same

entity that is the customer of record on the net-metered account or may be owned by a third party.

     (2) “Core forest” refers to unfragmented forest blocks of single or multiple parcels totaling

two hundred fifty (250) acres or greater unbroken by development and at least twenty-five (25)

yards from mapped roads, with eligibility questions to be resolved by the director of the department

of environmental management. Such determination shall constitute a contested case as defined in

§ 42-35-1.

     (3) “Electric distribution company” shall have the same meaning as § 39-1-2, but shall not

include Block Island Power Company or Pascoag Utility District, each of whom shall be required

to offer net metering to customers through a tariff approved by the public utilities commission after

a public hearing. Any tariff or policy on file with the public utilities commission on the date of

passage of this chapter shall remain in effect until the commission approves a new tariff.

     (4) “Eligible credit recipient” means one of the following eligible recipients in the electric

distribution company’s service territory whose electric service account or accounts may receive

net-metering credits from a community remote net-metering system. Eligible credit recipients

include the following definitions:

     (i) Residential accounts in good standing.

     (ii) “Low- or moderate-income housing eligible credit recipient” means an electric service

account or accounts in good standing associated with any housing development or developments

owned or operated by a public agency, nonprofit organization, limited-equity housing cooperative,

or private developer that receives assistance under any federal, state, or municipal government

program to assist the construction or rehabilitation of housing affordable to low- or moderate-

income households, as defined in the applicable federal or state statute, or local ordinance,

encumbered by a deed restriction or other covenant recorded in the land records of the municipality

in which the housing is located, that:

     (A) Restricts occupancy of no less than fifty percent (50%) of the housing to households

with a gross, annual income that does not exceed eighty percent (80%) of the area median income

as defined annually by the United States Department of Housing and Urban Development (HUD);

     (B) Restricts the monthly rent, including a utility allowance, that may be charged to

residents, to an amount that does not exceed thirty percent (30%) of the gross, monthly income of

a household earning eighty percent (80%) of the area median income as defined annually by HUD;

     (C) Has an original term of not less than thirty (30) years from initial occupancy.

     Electric service account or accounts in good standing associated with housing

developments that are under common ownership or control may be considered a single low- or

moderate-income housing eligible credit recipient for purposes of this section. The value of the

credits shall be used to provide benefits to tenants.

     (iii) “Educational institutions” means public and private schools at the primary, secondary,

and postsecondary levels.

     (iv) “Commercial or industrial customers” means any nonresidential customer of the

electric distribution company.

     (5) “Eligible net-metering resource” means eligible renewable energy resource, as defined

in § 39-26-5 including biogas created as a result of anaerobic digestion, but, specifically excluding

all other listed eligible biomass fuels.

     (6) “Eligible net-metering system” means a facility generating electricity using an eligible

net-metering resource that, for any system with a nameplate capacity in excess of twenty-five

kilowatts (25 KW), is reasonably designed and sized to annually produce electricity in an amount

that is equal to, or less than, the renewable self-generator’s usage at the eligible net-metering system

site measured by the three-year (3) average annual consumption of energy over the previous three

(3) years at the electric distribution account(s) located at the eligible net-metering system site. A

projected annual consumption of energy may be used until the actual three-year (3) average annual

consumption of energy over the previous three (3) years at the electric distribution account(s)

located at the eligible net-metering system site becomes available for use in determining eligibility

of the generating system. For any system with a nameplate capacity equal to or less than twenty-

five kilowatts (25 KW), eligibility shall not be restricted based on prior consumption. The eligible

net-metering system may be owned by the same entity that is the customer of record on the net-

metered accounts or may be owned by a third party that is not the customer of record at the eligible

net-metering system site and which may offer a third-party, net-metering financing arrangement or

net-metering financing arrangement, as applicable. Notwithstanding any other provisions of this

chapter, any eligible net-metering resource: (i) Owned by a public entity, educational institution,

hospital, nonprofit, or multi-municipal collaborative; or (ii) Owned and operated by a renewable-

generation developer on behalf of a public entity, educational institution, hospital, nonprofit, or

multi-municipal collaborative through a net-metering financing arrangement shall be treated as an

eligible net-metering system and all accounts designated by the public entity, educational

institution, hospital, nonprofit, or multi-municipal collaborative for net metering shall be treated as

accounts eligible for net metering within an eligible net-metering system site; or (iii) Owned and

operated by a renewable-generation developer on behalf of one or more commercial or industrial

customer(s) through net-metering financing arrangement(s) shall be treated as an eligible net-

metering system within an eligible net-metering system site. Notwithstanding any other provision

to the contrary, effective July 1, 2060, an eligible net-metering system means a facility generating

electricity using an eligible net-metering resource that is interconnected behind the same meter as

the net-metering customer’s load.

     (7) “Eligible net-metering system site” means the site where the eligible net-metering

system or community remote net-metering system is located or is part of the same campus or

complex of sites contiguous to one another and the site where the eligible net-metering system or

community remote net-metering system is located or a farm on which the eligible net-metering

system or community remote net-metering system is located. Except for an eligible net-metering

system owned by or operated on behalf of a public entity, educational institution, hospital,

nonprofit, or multi-municipal collaborative or for a commercial or industrial customer through a

net-metering financing arrangement, the purpose of this definition is to reasonably assure that

energy generated by the eligible net-metering system is consumed by net-metered electric service

account(s) that are actually located in the same geographical location as the eligible net-metering

system. All energy generated from any eligible net-metering system is, and will be considered,

consumed at the meter where the renewable energy resource is interconnected for valuation

purposes. Except for an eligible net-metering system owned by, or operated on behalf of, a public

entity, educational institution, hospital, nonprofit, or multi-municipal collaborative, or for a

commercial or industrial customer through a net-metering financing arrangement, or except for a

community remote net-metering system, all of the net-metered accounts at the eligible net-metering

system site must be the accounts of the same customer of record and customers are not permitted

to enter into agreements or arrangements to change the name on accounts for the purpose of

artificially expanding the eligible net-metering system site to contiguous sites in an attempt to avoid

this restriction. However, a property owner may change the nature of the metered service at the

accounts at the site to be master metered in the owner’s name, or become the customer of record

for each of the accounts, provided that the owner becoming the customer of record actually owns

the property at which the account is located. As long as the net-metered accounts meet the

requirements set forth in this definition, there is no limit on the number of accounts that may be net

metered within the eligible net-metering system site.

     (8) “Excess renewable net-metering credit” means a credit that applies to an eligible net-

metering system or community remote net-metering system for that portion of the production of

electrical energy beyond one hundred percent (100%) and no greater than one hundred twenty-five

percent (125%), except for any system with a nameplate capacity equal to or less than twenty-five

kilowatts (25 KW) for which excess renewable net-metering credit applies to all production of

electrical energy beyond one hundred percent (100%) of the renewable self-generator’s own

consumption at the eligible net-metering system site or the sum of the usage of the eligible credit

recipient accounts associated with the community remote net-metering system during the

applicable billing period.

     For electrical energy produced greater than one hundred percent (100%) of the renewable

self-generator’s own electricity consumption at the eligible net-metering system site or the sum of

the usage of the eligible credit recipient accounts associated with the community remote net-

metering system during the applicable billing period, excess renewable net-metering credits shall

be equal to the wholesale electricity rate, which is hereby declared to be the ISO-New England

energy clearing price. When applying the ISO-New England energy clearing price to calculate the

value of excess renewable net-metering credits, the electric distribution company, subject to

commission approval and subject to amendment from time to time, may use an annual average,

monthly average, or other time increment and may use Rhode Island zone pricing or other

applicable locational pricing. The commission shall have the authority to make determinations as

to the applicability of this credit to specific generation facilities to the extent there is any uncertainty

or disagreement.

     (9) “Farm” shall be defined in accordance with § 44-27-2, except that all buildings

associated with the farm shall be eligible for net-metering credits as long as: (i) The buildings are

owned by the same entity operating the farm or persons associated with operating the farm; and (ii)

The buildings are on the same farmland as the project on either a tract of land contiguous with, or

reasonably proximate to, such farmland or across a public way from such farmland.

     (10) “Grid access fee” means a monthly fee, determined by the commission, that an electric

distribution company must use to offset distribution costs associated with net metering systems that

otherwise would be paid by ratepayers. The grid access fee shall be assessed to all eligible net-

metering systems and or community remote net-metering systems with a nameplate capacity equal

to or greater than one (1) megawatt of capacity. For systems with a nameplate capacity of less than

one (1) megawatt, the fee shall be zero. The commission shall determine the grid access fee

applicable to systems described herein and shall establish a process by which the electric

distribution company must apply the grid access fee to offset distribution costs. Beginning January

1, 2027, the initial monthly grid access fee established by the commission must be: a) for a system

with a nameplate capacity of one (1) megawatt or more and less than three (3) megawatts, $1.40

multiplied by the nameplate capacity of the system in kilowatts; b) for a system with a nameplate

capacity of three (3) megawatts or more and less than five (5) megawatts, $3.00 multiplied by the

nameplate capacity of the system in kilowatts; and c) for systems with a nameplate capacity of five

(5) megawatts or more, $4.49 multiplied by the nameplate capacity of the system in kilowatts. The

commission shall periodically review the initial grid access fee to account for increases in

transmission and distribution rates.

     (10) (11) “Hospital” means and shall be defined and established as set forth in chapter 17

of title 23.

     (11) (12) “Multi-municipal collaborative” means a group of towns and/or cities that enter

into an agreement for the purpose of co-owning a renewable-generation facility or entering into a

financing arrangement pursuant to subsection (15).

     (12) (13) “Municipality” means any Rhode Island town or city, including any agency or

instrumentality thereof, with the powers set forth in title 45.

     (13) (14) “Net metering” means using electrical energy generated by an eligible net-

metering system for the purpose of self-supplying electrical energy and power at the eligible net-

metering system site, or with respect to a community remote net-metering system, for the purpose

of generating net-metering credits to be applied to the electric bills of the eligible credit recipients

associated with the community net-metering system. The amount so generated will thereby offset

consumption at the eligible net-metering system site through the netting process established in this

chapter, or with respect to a community remote net-metering system, the amounts generated in

excess of that amount will result in credits being applied to the eligible credit-recipient accounts

associated with the community remote net-metering system.

     (14) (15) “Net-metering customer” means a customer of the electric distribution company

receiving and being billed for distribution service whose distribution account(s) are being net

metered.

     (15) (16) “Net-metering financing arrangement” means arrangements entered into by a

public entity, educational institution, hospital, nonprofit, multi-municipal collaborative, or a

commercial or industrial customer with a private entity to facilitate the financing and operation of

a net-metering resource, in which the private entity owns and operates an eligible net-metering

resource on behalf of a public entity, educational institution, hospital, nonprofit, multi-municipal

collaborative, or commercial or industrial customer, where: (i) The eligible net-metering resource

is located on property owned or controlled by the public entity, educational institution, hospital,

municipality, multi-municipal collaborative, or commercial or industrial customer as applicable;

and (ii) The production from the eligible net-metering resource and primary compensation paid by

the public entity, educational institution, hospital, nonprofit, multi-municipal collaborative, or

commercial or industrial customer to the private entity for such production is directly tied to the

consumption of electricity occurring at the designated net-metered accounts.

     (16) (17) “Nonprofit” means a nonprofit corporation as defined and established through

chapter 6 of title 7, and shall include religious organizations that are tax exempt pursuant to 26

U.S.C. § 501(d).

     (17) (18) “Person” means an individual, firm, corporation, association, partnership, farm,

town or city of the state of Rhode Island, multi-municipal collaborative, or the state of Rhode Island

or any department of the state government, governmental agency, or public instrumentality of the

state.

     (18) (19) “Preferred site” means a location for a renewable energy system that has had prior

development, including, but not limited to: landfills, gravel pits and quarries, highway and major

road median strips, brownfields, superfund sites, parking lots or sites that are designated

appropriate for carports, and all rooftops including, but not limited to, residential, commercial,

industrial, and municipal buildings.

     (19) (20) “Project” means a distinct installation of an eligible net-metering system or a

community remote net-metering system. An installation will be considered distinct if it is installed

in a different location, or at a different time, or involves a different type of renewable energy.

Subject to the safe-harbor provisions in § 39-26.4-3(a)(1), new and distinct projects cannot be

located on adjoining parcels of land within core forests, except for preferred sites.

     (20) (21) “Public entity” means the federal government, the state of Rhode Island,

municipalities, wastewater treatment facilities, public transit agencies, or any water 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.

     (21) (22) “Public entity net-metering system” means a system generating renewable energy

at a property owned or controlled by the public entity that is participating in a net-metering

financing arrangement where the public entity has designated accounts in its name to receive net-

metering credits.

     (22) (23) “Renewable net-metering credit” means a credit that applies to an eligible net-

metering system or a community remote net-metering system up to one hundred percent (100%) of

either the renewable self-generator’s usage at the eligible net-metering system site or the sum of

the usage of the eligible credit-recipient accounts associated with the community remote net-

metering system over the applicable billing period. This credit shall be equal to the total kilowatt

hours of electrical energy generated up to the amount consumed on-site, and/or generated up to the

sum of the eligible credit-recipient account usage during the billing period multiplied by the sum

of the distribution company’s:

     (i) Last resort service kilowatt-hour charge for the rate class applicable to the net-metering

customer, except that for remote public entity and multi-municipality collaborative net-metering

systems that submit an application for an interconnection study on or after July 1, 2017, and

community remote net-metering systems, the last resort service kilowatt-hour charge shall be net

of the renewable energy standard charge or credit;

     (ii) Distribution kilowatt-hour charge;

     (iii) Transmission kilowatt-hour charge; and

     (iv) Transition kilowatt-hour charge.

     For projects after April 15, 2023, subject to the allowable two hundred seventy-five

megawatts alternating current (275 MWac), under § 39-26.4-3(a)(1)(vi), the credit shall be reduced

by twenty percent (20%).

     For all eligible net-metering systems with a nameplate capacity equal to or greater than one

(1) megawatt, and all community remote net-metering systems with a nameplate capacity equal to

or greater than one (1) megawatt, the net metering credit shall be calculated under § 39-26.4-

2(23)(i)-(iv), based on the charges in effect on July 1, 2026.

     Notwithstanding the foregoing, except for systems that have requested an interconnection

study for which payment has been received by the distribution company, or if an interconnection

study is not required, a completed and paid interconnection application, by December 31, 2018, the

renewable net-metering credit for all remote public entity and multi-municipal collaborative net-

metering systems shall not include the distribution kilowatt-hour charge be the wholesale rate as

defined in subsection (8) commencing on January 1, 2060 2045.

     (23) (24) “Renewable self-generator” means an electric distribution service customer of

record for the eligible net-metering system or community remote net-metering system at the eligible

net-metering system site which system is primarily designed to produce electrical energy for

consumption by that same customer at its distribution service account(s), and/or, with respect to

community remote net-metering systems, electrical energy which generates net-metering credits to

be applied to offset the eligible credit-recipient account usage.

     (24) (25) “Third party” means and includes any person or entity, other than the renewable

self-generator, who or that owns or operates the eligible net-metering system or community remote

net-metering system on the eligible net-metering system site for the benefit of the renewable self-

generator.

     (25) (26) “Third-party, net-metering financing arrangement” means the financing of

eligible net-metering systems or community remote net-metering systems through lease

arrangements or power/credit purchase agreements between a third party and renewable self-

generator, except for those entities under a public entity net-metering financing arrangement. A

third party engaged in providing financing arrangements related to such net-metering systems with

a public or private entity is not a public utility as defined in § 39-1-2.

     SECTION 11. Section 39-31-11 of the General Laws in Chapter 39-31entitled "Affordable

Clean Energy Security Act” is hereby repealed.

     39-31-11. 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. For long-term contracts approved pursuant to this chapter on or after January 1,

2022, 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 long-term contracts approved

pursuant to this chapter on or after January 1, 2027, 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 12. Chapter 42-14.5 of the General Laws entitled “The Rhode Island Health

Care Reform Act of 2004 — Health Insurance Oversight” is hereby amended by adding thereto the

following section:

     42-14.5-3.2. Health spending accountability and transparency program.

     (a) The health insurance commissioner shall establish a health spending accountability and

transparency program with the following goals that are designed to promote affordability and curb

health care spending growth in Rhode Island:

     (1) understand and create transparency around health care costs and the drivers of cost

growth;

     (2) create shared accountability for health care costs and cost growth among insurers,

providers, and government by measuring performance against a cost growth target tied to one or

more economic indicators; and

     (3) lessen the negative impact of rising health care costs on Rhode Island residents,

businesses, and government.

     (b) The health insurance commissioner shall administer the health spending accountability

and transparency program and shall convene and chair the following advisory bodies to provide

input into the implementation of the program:

     (1) An affordability advisory committee comprised of individuals without direct financial

interests in the health care system, including but not limited to independent health policy experts,

consumers or consumer representatives, employers or employer representatives, and

representatives of organized labor. The affordability advisory committee shall consist of eight (8)

members, as follows:

     (i) two independent health policy expert members shall be appointed by the governor;

     (ii) one consumer representative and one employer or organized labor representative shall

be appointed by the president of the senate;

     (iii) one consumer representative and one employer or organized labor representative shall

be appointed by the speaker of the house;

     (iv) the secretary of health and human services or their designee; and

     (v) the health insurance commissioner or their designee;

     (2) A stakeholder advisory council that includes, but shall not be limited to, representatives

of hospitals, health insurers, providers, and pharmaceutical manufacturers, in addition to

independent health policy experts, consumers or consumer representatives, employers or employer

representatives, and representatives of organized labor, all of whom shall be appointed by the health

insurance commissioner.

     (c) For calendar years 2026 and 2027, the health insurance commissioner shall establish

the annual health care cost growth targets pursuant to the 2023 Compact to Reduce the Growth in

Health Care Costs while Improving Health Care Access, Equity, Patient Experience, and Quality

in Rhode Island.

     (d) Not later than July 1, 2027, and every five years thereafter, the health insurance

commissioner shall establish annual health care cost growth targets for the succeeding five calendar

years for payers and large provider entities. In developing the health care cost growth targets, the

commissioner shall minimally consider:

     (1) historical and forecasted changes in median household income in the state;

     (2) the growth rate of potential gross state product;

     (3) the most recent annual report prepared by the health insurance commissioner, pursuant

to subsection (g) of this section;

     (4) recommendations from the affordability advisory committee and stakeholder advisory

council established pursuant to subsections (b)(1) and (b)(2) of this section, including any

information and analyses used to inform such recommendations.

     (e) Not later than July 1, 2027, and every five years thereafter, the health insurance

commissioner, in collaboration with the executive office of health and human services, shall

establish annual all-payer primary care investment targets for the succeeding five calendar years.

In developing the all-payer primary care investment targets, the commissioner shall consider

recommendations from the affordability advisory committee and stakeholder advisory council

pursuant to subsections (b)(1) and (b)(2) of this section.

     (f) The health insurance commissioner shall establish requirements for payers to report data

and other information necessary to calculate and monitor health care cost growth; evaluate

performance against the health care cost growth target established under subsections (c) and (d) of

this section; evaluate performance against the all-payer primary care investment target established

under subsection (e) of this section; and measure quality, public health, and health equity

performance, as defined by the health insurance commissioner. Such data shall include but not be

limited to:

     (1) total and per capita health care expenditures;

     (2) total and per capita medical expenses;

     (3) net cost of private health insurance;

     (4) primary care expenditures;

     (5) quality performance data from the office of the health insurance commissioner’s

aligned measure set, as designated by the health insurance commissioner, with input from a

workgroup with expertise in quality measure alignment convened by the health insurance

commissioner; and

     (6) performance on a set of public health and accountability measures, as designated by the

health insurance commissioner, with input from the executive office of health and human services,

the department of health, and a workgroup with expertise in public health convened by the health

insurance commissioner.

     (g) The health insurance commissioner shall publish an annual report on health care

spending and quality in Rhode Island which includes, but is not limited to, the following:

     (1) total and per capita health care spending trends at the statewide, insurance market,

individual payer, and large provider entity levels, including performance against the cost growth

target at each of these levels;

     (2) net cost of private health insurance by insurance market and payer;

     (3) primary care spending as a percentage of total medical expenses and annual primary

care spending growth, including progress toward meeting the all-payer primary care investment

target established in subsection (e) of this section;

     (4) an analysis of the drivers of health care spending growth by service category, as well

as the relative contribution of utilization and price on the rate of growth, using data from the All-

Payer Claims Database;

     (5) performance on select quality measures from the health insurance commissioner

commissioner’s aligned measure set, pursuant to subsection (f)(5) of this section;

     (6) performance on a set of public health and accountability measures pursuant to

subsection (f)(6) of this section;

     (7) status of ongoing performance improvement plans, results of performance

improvement plans completed during the prior performance year, and any penalties imposed due

to non-compliance with developing or implementing a performance improvement plan pursuant to

subsection (i) of this section; and

     (8) recommendations for policy changes that may include, but not be limited to, strategies

to improve affordability for Rhode Island residents, control health care spending growth while

maintaining high standards for quality health care, and improve the oversight, performance and

efficiency of Rhode Island’s health care system.

     (h) (1) The health insurance commissioner shall convene an annual public hearing

following the release of the annual report required pursuant to subsection (g) of this section. Such

public hearing shall involve an examination of:

     (i) the report most recently prepared by the health insurance commissioner pursuant to

subsection (g) of this section;

     (ii) the expenditures of provider entities and payers, including, but not limited to, health

care cost trends, primary care spending as a percentage of total medical expenses, and the factors

contributing to such costs and expenditures; and

     (iii) any other matters that the health insurance commissioner deems relevant for the

purposes of this section.

     (2) The health insurance commissioner may require any payer or provider entity that, for

the performance year, is found to have exceeded the health care cost growth target or has failed to

meet the all-payer primary care investment target, to participate in such hearing. The health

insurance commissioner may further require any payer, provider entity, or other entity, including

but not limited to a pharmaceutical manufacturer or pharmacy benefit manager, that is found to

have significantly contributed to health care spending growth in the state, as determined by the

commissioner, to participate in such hearing. Each payer, provider entity, or other entity that is

required to participate in such hearing shall provide testimony on issues identified by the health

insurance commissioner and provide additional information on actions taken to reduce such payer’s

or entity’s contribution to future statewide health care spending or to increase such payer’s or

provider entity’s primary care spending as a percentage of total medical expenses.

     (3) The health insurance commissioner shall allow representatives from consumer groups,

employers, organized labor, community organizations, members of the public, and other interested

parties to provide testimony as part of the annual public hearing.

     (i)(1) The health insurance commissioner may require any commercial health insurer or

large provider entity that has commercial market spending growth that exceeds the health care cost

growth target in any two out of three performance years to develop and implement a performance

improvement plan. For the purposes of requiring a performance improvement plan, a large provider

entity must have at least 120,000 attributed member months across commercial health insurers.

     (2) A performance improvement plan must:

     (i) identify key spending drivers and include concrete strategies and steps a large provider

entity or commercial health insurer will take to address such spending drivers;

     (ii) identify an appropriate timeline for implementation, including a timeframe by which

the large provider entity or commercial health insurer will be subject to an evaluation by the health

insurance commissioner; and

     (iii) have clear measurements of success. The commissioner may provide guidance,

feedback, and additional recommendations to a commercial health insurer or large provider entity

in developing a performance improvement plan.

     (3) The health insurance commissioner shall review and approve, modify, or reject all

performance improvement plans.

     (4) The health insurance commissioner shall monitor implementation throughout the

duration of the performance improvement plan to assess compliance with the performance

improvement plan’s terms and shall determine at the conclusion of the performance improvement

plan whether the entity has adequately addressed the targeted spending drivers.

     (5) If the health insurance commissioner determines that the performance improvement

plan does not adequately meet the requirements in subsection (i)(2) of this section, or that an entity

has failed to comply with the terms of the performance improvement plan pursuant to subsection

(i)(4), the commissioner may impose a financial penalty on the commercial health insurer or large

provider entity. The health insurance commissioner shall develop criteria for imposing the

financial penalty based on factors that include, but are not limited to:

     (i) the degree to which the large provider entity or commercial health insurer exceeded the

target;

     (ii) the size of the large provider entity or commercial health insurer entity;

     (iii) the good faith efforts of the large provider entity or commercial health insurer to

address health care spending growth; and

     (iv) the financial condition of the large provider entity or commercial health insurer,

according to criteria adopted by the health insurance commissioner.

     (6) The total cost of the health insurance commissioner’s review of a performance

improvement plan pursuant to subsection (i)(3) of this section, monitoring implementation of a

performance improvement plan pursuant to subsection (i)(4) of this section, and determination of

compliance with a performance improvement plan pursuant to subsection (i)(4) of this section shall

be borne by the commercial health insurer or large provider entity subject to the performance

improvement plan, according to parameters defined by the health insurance commissioner.

     (j) The health insurance commissioner may establish data sharing agreements with the

executive office of health and human services, department of health, and any other identified state

agency to meet the requirements of this section and ensure a comprehensive view of health care

spending trends.

     (k) The health insurance commissioner shall adopt a schedule of civil penalties determined

by the severity of the violation for: (i) any payer that fails to submit required data, submits

incomplete data, or otherwise obstructs data reporting pursuant to subsection (f) of this section; and

(ii) any payer, provider, or other entity that fails to comply with the health insurance

commissioner’s request to provide testimony during the annual public hearing pursuant to

subsection (h) of this section.

     SECTION 13. Section 42-14.5-2.1 of the General Laws in Chapter 42-14.5 entitled “The

Rhode Island Health Care Reform Act of 2004 — Health Insurance Oversight” is hereby amended

to read as follows:

     42-14.5-2.1. Definitions.

     As used in this chapter:

     (1) “Accountability standards” means measures including service processes, client and

population outcomes, practice standard compliance, and fiscal integrity of social and human service

providers on the individual contractual level and service type for all state contracts of the state or

any subdivision or agency to include, but not limited to, the department of children, youth and