2026 -- H 7879

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LC004920

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2026

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- THERMAL ENERGY NETWORK

AND JOB ACT

     Introduced By: Representatives Cortvriend, Handy, Boylan, McGaw, and Edwards

     Date Introduced: February 27, 2026

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

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

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

CHAPTER 36

THERMAL ENERGY NETWORK AND JOB ACT

     39-36-1. Short title.

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

Act”.

     39-36-2. Purpose.

     Thermal energy networks have the potential to contribute to the satisfaction of the

greenhouse gas reduction and just-transition requirements of chapter 6.2 of title 42 while potentially

offering reduced operating costs and decreased costs of future expansion. The purpose of the

thermal energy network and jobs act is to facilitate the study of this technology in an effort to

determine if these goals can be met by the implementation of thermal energy networks in Rhode

Island.

     39-36-3. Definitions.

     As used in this chapter:

     (1) “Environmental justice focus area” means a census tract that meets one or more of the

following criteria:

     (i) Annual median household income is not more than sixty-five percent (65%) of the

statewide annual median household income;

     (ii) Minority population is equal to or greater than forty percent (40%) of the population;

     (iii) Twenty-five percent (25%) or more of the households lack English language

proficiency; or

     (iv) Minorities comprise twenty-five percent (25%) or more of the population and the

annual median household income of the municipality in the proposed area does not exceed one

hundred fifty percent (150%) of the statewide annual median household income.

     (2) “Public-private partnerships” means a long-term contract between the state and a

private partner that develops, finances, constructs, operates, or maintains a state-owned physical

asset or property in which the private party bears significant risk over the long term.

     (3) “Public right-of-way” means the area on, below, or above any street, avenue, boulevard,

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

a public or quasi-public entity.

     (4) “Public utility” means the natural gas utility and/or the electric distribution company as

defined in § 39-1-2(a)(20) that serves over twenty-five thousand (25,000) ratepayers.

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

     (6) “Thermal energy” means piped non-combustible fluids used for transferring heat into

and out of buildings from heating and cooling processes, including comfort heating and cooling,

domestic hot water, and refrigeration.

     (7) “Thermal energy network” means all real estate, fixtures, and personal property

operated, owned, used, or to be used for, or for the primary purpose of facilitating, a utility-scale

or community-scale distribution-infrastructure project that supplies thermal energy.

     39-36-4. Feasibility studies and recovery of approved implementation costs.

     (a) Upon the effective date of this chapter, the public utility shall, within twelve (12)

months of the effective date of this section, identify no fewer than two (2) and no more than twelve

(12) potential locations for thermal energy network feasibility studies representing diverse

geographies and building types. Within eighteen (18) months of the effective date of this chapter,

the public utility shall commence at least two (2) feasibility studies relating to the selected

locations.

     (b) At least one location considered shall be located within or directly benefit an

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

     (c) In evaluating the locations to determine which location(s) should be subject to a

feasibility study, the public utility shall consider:

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     (1) Greenhouse gas emissions reductions;

     (2) Cost-effectiveness, including projected energy-cost savings and operations and

maintenance costs over the useful life of the equipment;

     (3) Potential engineering and design requirements;

     (4) Potential operations and maintenance requirements;

     (5) Ownership of buildings or facilities receiving network benefits; and

     (6) The degree to which the project benefits communities experiencing disproportionate

environmental or public-health burdens.

     (d) In developing the initial list of locations to study, the public utility shall consider

diversity in geography, customer class, and average annual consumption of thermal energy. The

list shall include for consideration the following areas:

     (1) The Port of Providence and neighboring communities;

     (2) Residential, hospital, and healthcare facilities;

     (3) Lower South Providence;

     (4) Facilities within the jurisdiction of the Rhode Island convention center authority;

     (5) Facilities within the jurisdiction of the Quonset development corporation;

     (6) University of Rhode Island campuses;

     (7) Aquidneck Island;

     (8) The Port of Galilee; and

     (9) Pastore center campus.

     (e) All costs reasonably incurred by utilities in connection with their compliance with this

chapter shall be fully recoverable by said utility. Provided, however, that each utility shall endeavor

to secure available non-ratepayer funding, including from federal or state grants, subsidized loans,

or tax credits to reduce said costs. To the extent a utility receives such funding support, the cost

recovered pursuant to this subsection shall be offset by the amount of such funding support.

     (f) Without limiting the generality of subsection (e) of this section, the PUC shall authorize

recovery of reasonable and prudently incurred costs associated with planning and feasibility studies

for thermal energy network projects; provided that:

     (1) Such recovery shall be conditioned upon the utility’s demonstration that it has fully

pursued available non-ratepayer funding, including federal or state grants, tax credits, or low-

interest financing; and

     (2) The PUC shall ensure that any rate recovery is just, reasonable, and limited in order not

to impose an undue burden on ratepayers.

     (g) The PUC may authorize the public utility to use or leverage existing demand side

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management (DSM) charges provided for in § 39-2-1.2 for planning, design, and construction of

thermal-energy networks.

     (h) The utility may draw upon available state funding including, but not limited to, office

of energy resources (“OER”) and Rhode Island infrastructure bank (“RIIB”) programs and

incentives, as well as federal technical-assistance programs to support such studies.

     (i) The OER may use Lead by Example Program funds and other state assistance to support

feasibility and engineering studies requested by utilities, municipalities, or public-private

partnerships.

     39-36-5. Thermal energy network pilot project.

     (a) Upon the completion of any feasibility study conducted by a utility in accordance with

§ 39-36-4, the relevant utility shall determine if the studied project is in fact feasible and, if so, may

prepare and submit a proposal to the PUC to develop a pilot project that is consistent with the

subject and results of said feasibility study.

     (b) The PUC shall approve a cost recovery for pilot projects that the PUC determines

provide a net benefit to the relevant utility’s ratepayers based on its consideration of the following

factors:

     (1) Greenhouse gas emissions reductions;

     (2) Cost-effectiveness, including projected energy-cost savings and operations and

maintenance costs over the useful life of the equipment;

     (3) The degree to which the projected pilot program costs are funded by sources other than

ratepayers, including by direct state support and/or by grants received by the utility in support of

the project;

     (4) Benefits to communities experiencing disproportionate environmental or public-health

burdens; and

     (5) A demonstrable confirmation by the utility that all non-ratepayer funding sources were

explored to offset costs to ratepayers including, but not limited to, federal or state grants, financing

sourced through public bonds, subsidized loans, or tax credits. In the event that these funding

sources are still insufficient to provide full cost recovery, the utility shall provide explanation.

     (c) For the avoidance of doubt, a utility shall have no obligation to proceed with a pilot

project unless said project has been:

     (1) Approved by the PUC; and

     (2) The PUC has approved full cost recovery for the project other than to the extent such

costs are funded by direct state support or by grants received by the utility in support of the project.

     (d) Notwithstanding any other provision of law, any public utility engaged in the business

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of natural gas distribution shall, subject to approval by the public utilities commission, be entitled

to own, construct, or operate thermal energy networks for the purpose of selling and distributing

thermal energy and shall be entitled to charge and collect payment from its customers in connection

therewith in accordance with and subject to the provisions of title 39. Nothing in this subsection

shall be construed to limit the authority of the state, municipalities, cooperatives, or nonprofit

entities to develop, own, or operate thermal energy networks independent of a public utility.

Approval to acquire, own, or operate a thermal energy network shall be granted on a project-

specific basis and shall not confer general authority over a service territory.

     39-36-6. Thermal energy networks regulation.

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

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

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

     (1) To the extent feasible, the public utility shall maximize cost effective investments in

thermal energy networks when it is in the public interest; and

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

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

pursuant to chapter 6.2 of title 42 (“act on climate”).

     (b) Upon the effective date of this chapter, the PUC shall adopt rules and regulations within

eighteen (18) months, to implement this section including, but not limited to:

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

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

reductions requirements of chapter 6.2 of title 42 (“act on climate”) and that does not increase

greenhouse gas emissions or co-pollutants;

     (2) Criteria for cost-effectiveness;

     (3) Rate structures for thermal energy networks;

     (4) Promote the training and transition of workers in the fossil fuel industry impacted by

this chapter; and

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

     (c) In promulgating rules and regulations for thermal energy networks, the commission

shall factor in the advisory opinion of the taskforce created in § 39-36-7.

     39-36-7. Thermal energy network taskforce.

     (a) The PUC shall form a thermal energy network taskforce, which shall be an advisory

committee to evaluate the results of the feasibility studies conducted in accordance with § 39-36-4

and any pilot project undertaken in accordance with § 39-36-5. The taskforce shall meet not less

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than quarterly at the PUC and shall be comprised of twelve (12) members appointed by the PUC,

which shall include the commissioner of the office of energy resources, or designee, the

administrator of the division of public utilities and carriers, or designee, the president of the Rhode

Island AFL-CIO, or designee, the president of the Rhode Island building & construction trades

council, or designee, at least two (2) members from a public utility that is subject to the provisions

of this chapter, and a representative of a union representing utility workers, and five (5) members

selected by the PUC who shall be selected to ensure balanced representation of the following

interests and areas of expertise:

     (1) Workforce and labor, including representation of utility workers and construction

trades;

     (2) Environmental and climate justice organizations or advocates;

     (3) Community and environmental justice organizations or advocates;

     (4) Technical expertise in engineering, utility infrastructure, utility economics, utility

business models, regulatory and utility law, or rate design; and

     (5) State or municipal policy and planning, including in connection with energy,

environment, and infrastructure.

     (b) The taskforce shall provide periodic written updates on the status and insights from the

feasibility studies and any pilot projects.

     (c) The purpose of said taskforce shall be to advise the PUC and public utility on the

deployment of thermal energy and thermal energy networks throughout the state. As such, the

taskforce shall:

     (1) Identify and align funding mechanisms (federal, state, rate-based, and private);

     (2) Recommend coordination among utilities, municipalities, and private developers:

     (3) Advise on workforce transition and labor standards;

     (4) Recommend locations and models for pilots and permanent projects; and

     (5) Create a framework to guide the state in planning for the expansion and accelerated

deployment of thermal energy and thermal energy network systems, including recommendations

for statewide infrastructure planning, integration with existing utility assets, and prioritization of

environmental justice focus areas.

     (d) The taskforce shall submit a written report to the PUC, DEM, OER, and the general

assembly no later than eighteen (18) months following its receipt of the complete results from the

feasibility studies, which report shall include: findings and actionable recommendations for

consideration in state planning and regulatory processes, including pertaining to the following:

     (1) Creation of fair market access rules for utility-owned thermal energy networks to accept

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

reductions requirements of chapter 6.2 of title 42 (“act on climate”) and that does not increase

greenhouse gas emissions or co-pollutants;

     (2) Criteria for cost-effectiveness;

     (3) Potential rate structures for thermal energy networks;

     (4) Promotion of the training and transition of workers in the fossil fuel industry impacted

by this chapter; and

     (5) The establishment of equitable rules for cost recovery by utilities for thermal energy

networks.

     (e) The taskforce shall expire six (6) months following the delivery of the report identified

in subsection (d) of this section, unless extended by the general assembly.

     39-36-8. Thermal energy network rules and regulations.

     (a) The general assembly finds and declares that thermal energy networks have the

potential to be important to the state meeting the just transition, equity, and decarbonization

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

     (1) To the extent feasible, the public utility shall pursue cost effective investments in

thermal energy networks when it is in the public interest; and

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

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

pursuant to chapter 6.2 of title 42 (“act on climate”).

     (b) In promulgating rules and regulations for thermal energy networks, the PUC shall factor

in the advisory opinion and report findings of the taskforce.

     39-36-9. Severability.

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

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

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

this chapter are declared to be severable.

     SECTION 2. This act shall take effect upon passage.

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LC004920

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- THERMAL ENERGY NETWORK

AND JOB ACT

***

     This act would establish the thermal energy network and jobs act to facilitate the study of

this technology to determine if these goals can be met by the implementation of thermal energy

networks in Rhode Island. The act would create a twelve (12) member task force of interested

parties which would be an advisory committee to evaluate the results of the feasibility studies.

     This act would take effect upon passage.

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