2025 -- S 0981 SUBSTITUTE A AS AMENDED

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2025

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A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- ENERGY FACILITY SITING

ACT

     Introduced By: Senators Zurier, and Britto

     Date Introduced: April 16, 2025

     Referred To: Senate Housing & Municipal Government

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 42-98-1.1 of the General Laws in Chapter 42-98 entitled "Energy

Facility Siting Act" is hereby amended to read as follows:

     42-98-1.1. Capital city underground utility initiative.

     (a) Legislative Findings

     (1) In 2004, the cities of Providence and East Providence exercised their rights under this

section as it was originally enacted in 2004, to forego receipt of a customer credit owed to the

Narragansett Electric Company’s (“company”) electric customers residing in those communities,

opting instead to use those communities’ allocated share of the customer credit to fund a portion of

the cost of constructing the “Underground Alignment” of a portion of the E-183 115 kilovolt

electric transmission line as defined in the Settlement Agreement approved by the Board on May

28, 2004 in Docket No. SB-2003-01.

     (2) The Settlement Agreement approved by the Board in Docket No. SB-2003-01 provided,

in part, that the parties to the Settlement Agreement would work to reach an agreement on a route

for the Underground Alignment while the Rhode Island attorney general would work to secure

funding for construction of the Underground Alignment. The Settlement Agreement provided

further that if the Underground Alignment was found not to be feasible for reasons including cost

or constructability, other identified alignments of the relevant portion of the E-183 electric

transmission line would be considered in order of preference.

     (3) On January 17, 2018, the Board issued an Order determining that the Underground

Alignment and the “Bridge Alignment North,” as defined in the Settlement Agreement, were not

feasible, and approving construction of the “Bridge Alignment South,” as defined in the Settlement

Agreement.

     (4) Following appellate review pursuant to § 42-98-12, on June 17, 2022, in Case No. 2018-

40-M.P., the Supreme Court of Rhode Island upheld the Board’s January 17, 2018 Order.

     (5) Due to the foregoing events and decisions, as of 2025, no portion of the E-183

transmission line has been constructed underground and no part of the customer credit referred to

in subsection (a)(1) of this section has been returned to electric customers in the cities of Providence

and East Providence.

     (6) The customer credit that arose from the company’s base distribution rate case in 2004,

which the cities of Providence and East Providence did not accept on behalf of their ratepayers, has

been segregated and has accrued interest for the benefit of Providence and East Providence electric

distribution customers.

     (7) The cities of Providence and East Providence desire to have portions of the E-183

electric transmission line located underground and require legislative authorization for funding

mechanisms to pay the incremental cost, over and above the estimated cost of the Bridge Alignment

South, of the burial of portions of the E-183 electric transmission line along the southern shore of

Fox and India Points that are south of Interstate 195 and in East Providence on the east side of the

Seekonk River (the “Bridge Alignment South – Hybrid”).

     (b) The public utilities commission shall permit the city of Providence or and the city of

East Providence, upon petition by a duly authorized representative of such municipality, to forego

some or apply all of the respective municipality’s pro rata share of the refund accruing to the

ratepayers of the respective municipality as computed under section 11(c) of the 3rd Third

Amended Settlement Agreement in Docket No. 2930; provided, however, that the city council of

each petitioning ratifies such action by passage of a resolution.

     (b) The public utilities commission shall permit, upon petition by the attorney general, for

the use of up to two million dollars ($2,000,000) from Narragansett Electric Company’s Storm

Contingency Fund for purposes of under grounding that portion of the E-183 transmission line

under consideration in Energy Facility Siting Board Docket 2003-01.

     (c) Narragansett Electric Company shall be required to apply to the regional grid operator

or its successor organization for approval to charge New England regional network service

customers for the capital costs associated with the construction of Phase II overhead configuration

labeled the “North Bridge Alignment” as defined by the Settlement Agreement that was approved

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by the Energy Facility Siting Board in Docket 2003-1.

     (d) The Narragansett Electric Company (“company”) shall be authorized to proceed with

the construction of the underground alignment of the E-183 line referenced in the Settlement

Agreement that was approved by the Energy Facility Siting Board in Docket 2003-01

(“Underground alignment”), including the acquisition of any property rights needed to implement

the underground alignment, plus accrued interest, toward the incremental cost of constructing the

Bridge Alignment South - Hybrid.

     (c) The Company shall apply to the regional grid operator or its successor organization for

approval to charge New England regional network service customers for the capital costs associated

with undergrounding portions of the E-183 transmission line as described herein and as verified for

feasibility by the Narragansett Electric Company. Any Portion of costs not categorized as eligible

for regional cost allocation shall be governed by subsections (d) through (f) of this section and

remain chargeable to the electric customers of Providence and East Providence.

     (d) Notwithstanding the Supreme Court’s June 17, 2022 affirmation of the Board’s January

17, 2018 Order, the Board shall have jurisdiction to consider a modification to the license to include

burial of a portion of the E-183 electric transmission line without having to consider whether the

requirements of §§ 42-98-11(b)(1) and (b)(2) have been met. Following approval by the Board of

a modified license, the company shall be authorized to proceed with the construction of the

modification which will include consideration of the Bridge Alignment South-Hybrid, subject to

the passage of resolutions by both city councils of the cities of Providence and East Providence

agreeing that any incremental costs above existing funding made available pursuant to subsection

(b) of this section may be included in electric rates of electric customers in those cities. Such

resolutions must be delivered to the public utilities commission no later than July 1, 2009.

Notwithstanding the terms of the Settlement, to 2026. To the extent the actual costs for the

underground alignment Bridge Alignment South - Hybrid exceed the funding obtained for the

project pursuant to this section and from federal and any other sources, the company is authorized

to include the incremental costs above those funding levels in its distribution rate base and reflect

the revenue requirement, including interest, any resulting tax adjustments, and billing system

modification costs in rates charged to the electric distribution customers within the cities of

Providence and East Providence in a manner approved by the public utilities commission, subject

to the timely passage and delivery of the resolution resolutions specified above. Such rate

adjustment shall be made within six (6) months from project completion, applying the same

ratemaking principles as ordinarily applied to distribution capital projects when they are allowed

in its distribution rate base by the public utilities commission. After completion of the underground

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alignment, the public utilities commission shall conduct a review of costs incurred to construct the

underground alignment in order to verify that the company’s calculation and implementation of

rates are in compliance with this section; provided, further, the auditor general shall perform a

performance audit of state costs. billed as a per kilowatt hour charge designed to recover the full

incremental cost of the Bridge Alignment South – Hybrid, including interest, any resulting tax

adjustments, and billing system modification costs, over a period not less than three (3) years

subject to reconciliation of the final cost compared to billed revenues. The incremental costs of

undergrounding net of the customer credit referenced in subsection (b) of this section will be

allocated to each city based on the actual cost of the underground portions in each respective city.

The company shall book the revenues collected through the rate adjustment for such incremental

underground construction costs as contribution in aid of construction in the appropriate

transmission accounts.

     (e) If the cities of Providence and East Providence obtain any other source of funding that

can be used to offset the cost of burial of the E-183 electric transmission line, that source of funding

shall offset the amount of the rate adjustment charged to the electric ratepayers in the cities of

Providence and/or East Providence under subsection (c) of this section as defined by the source of

funding.

     (e)(f) If the underground alignment goes forward, the company shall retain such portions

of the properties acquired to implement the underground alignment as may be necessary and

prudent, and shall transfer any remaining portions of said properties to the redevelopment authority

of the city in which the property is located after the completion of the project, at the city’s request

and at no additional cost to the city conditions precedent to the construction of the Bridge

Alignment South - Hybrid are satisfied, the cities of Providence and East Providence shall acquire

and convey to the company, all easements or property rights needed in the company’s reasonable

judgment for the construction, operation, and maintenance of the relevant segment of E-183. Any

costs associated with the transfer of property rights will be included in the overall project costs and

allocated as described in subsection (d) of this section. Any property and easements no longer being

used by the company for utility purposes after the underground alignment Bridge Alignment South-

Hybrid is completed also shall be transferred to the city in which such property is located after the

completion of the project, at the city’s request and at no additional cost to the city. If there is any

dispute about the extent to which property or easements are needed and therefore should not be

transferred, the public utilities commission shall decide the issue upon petition by the affected city.

     SECTION 2. This act shall take effect upon passage.

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO STATE AFFAIRS AND GOVERNMENT -- ENERGY FACILITY SITING

ACT

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     This act would allow for measures to advance the undergrounding of certain utility cables

and to have the same funded through utility rate increases to the cities of Providence and East

Providence.

     This act would take effect upon passage.

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