2014 -- H 7723

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LC004175

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2014

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS - DISTRIBUTED GENERATION

STANDARD CONTRACTS

     Introduced By: Representative Thomas Winfield

     Date Introduced: February 27, 2014

     Referred To: House Environment and Natural Resources

     It is enacted by the General Assembly as follows:

     SECTION 1. Sections 39-26.2-3 and 39-26.2-4 of the General Laws in Chapter 39-26.2

entitled "Distributed Generation Standard Contracts" are hereby amended to read as follows:

     39-26.2-3. Definitions. -- When used in this chapter, the following terms shall have the

following meanings:

      (1) "Annual target" means the target for total renewable energy nameplate capacity of

new distributed generation standard contracts set out in section 39-26.2-3.

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

      (3) "Board" shall mean the distributed generation standard contract board established

pursuant to the provisions of chapter 39-26.2-9, or the office of energy resources. Until such time

as the board is duly constituted, the office of energy resources shall serve as the board with the

same powers and duties pursuant to this chapter.

      (4) "Distributed generation contract capacity" means ten percent (10%) of an electric

distribution company's minimum long-term contract capacity under the long-term contracting

standard for renewable energy in section 39-26.1-2, inclusive of solar capacity. The distributed

generation contract capacity shall be reserved for acquisition by the electric distribution company

through standard contracts pursuant to the provisions of this chapter a minimum of twenty

megawatts (20 MW) of distributed generation projects each calendar year commencing on the

effective date of this section through December 31, 2016.

      (5) "Distributed generation facility" means an electrical generation facility that is a

newly developed renewable energy resource as defined in section 39-26.1-2, located in the

electric distribution company's load zone with a nameplate capacity no greater than five

megawatts (5 MW), using eligible renewable energy resources as defined by section 39-26-5,

including biogas created as a result of anaerobic digestion, but, specifically excluding all other

listed eligible biomass fuels, and connected to an electrical power system owned, controlled, or

operated by the electric distribution company.

      (6) "Distributed generation project" means a distinct installation of a distributed

generation facility. An installation will be considered distinct if it is installed in a different

geographical location and at a different time, or if it involves a different type of renewable energy

class.

      (7) "Electric distribution company" means a company defined in subdivision 39-1-2(12),

supplying standard offer service, last resort service, or any successor service to end-use

customers, but not including the Block Island Power Company or the Pascoag Utility District.

      (8) "Large distributed generation project" means a distributed generation project that has

a nameplate capacity that exceeds the size of a small distributed generation project in a given

year, but is no greater than three megawatts (3 MW) nameplate capacity.

      (9) "Office" means the Rhode Island office of energy resources.

      (10) (9) "Program year" means a calendar year beginning January 1 and ending

December 31.

      (11) (10) "Renewable energy classes" means categories for different renewable energy

technologies using eligible renewable energy resources as defined by section 39-26-5. For each

program year, the board shall determine the renewable energy classes as are reasonably feasible

for use in meeting distributed generation objectives from renewable energy resources and are

consistent with the goal of meeting the annual target for the program year. For the program year

ending December 31, 2012, there shall be at least four (4) technology classes and at least two (2)

shall be for solar generation technology, and at least one shall be for wind. The board may add,

eliminate, or adjust renewable energy classes for each program year with public notice given at

least sixty (60) days previous to any renewable energy class change becoming effective. For each

program year, the board shall set renewable energy class targets for each class established. Class

targets are the total program-year target amounts of nameplate capacity reserved for standard

contracts for each renewable energy class. The sum of all the class targets shall equal the annual

target.

      (12) (11) "Renewable energy credit" means a New England Generation Information

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System renewable energy certificate as defined in subdivision 39-26-2(15);

      (13) (12) "Small distributed generation project" means a distributed generation

renewable energy project that has a nameplate capacity within the following: Solar: fifty

kilowatts (50 KW) to five hundred kilowatts (500 KW); Wind: fifty kilowatts (50 KW) to one and

one-half megawatts (1.5 MW). For technologies other than solar and wind, the board shall set the

nameplate capacity size limits, but such limits may not exceed one megawatt. The board may

lower the nameplate capacity from year to year for any of these categories, but may not increase

the capacity beyond what is specified in this definition. In no case may a project developer be

allowed to segment a distributed generation project into smaller sized projects in order to fall

under this definition.

      (14) (13) "Standard contract" means a contract with a term of fifteen (15) twenty (20)

years at a fixed rate for the purchase of all capacity, energy, and attributes generated by a

distributed generation facility. A contract may have a different term if it is mutually agreed to by

the seller and the electric distribution company and it is approved by the commission. The terms

of the standard contract for each program year and for each renewable energy class shall be set

pursuant to the provisions of this chapter.

      (15) (14) "Standard contract ceiling price" means the standard contract price for the

output of a distributed generation facility which price is approved annually for each renewable

energy class pursuant to the procedure established in this chapter, for the purchase of energy,

capacity, renewable energy certificates, and all other environmental attributes and market

products that are available or may become available from the distributed generation facility.

     39-26.2-4. Standard contracts -- Annual targets. -- (a) To the extent eligible projects

are available and submit conforming applications, an electric distribution company shall enter

into standard contracts for an aggregate nameplate capacity of at least forty megawatts (40 MW)

twenty megawatts (20 MW) of distributed generation projects by the end of 2014 through the end

of 2016, unless such schedule is extended by the board. The contracting shall be spread over four

(4) years, based on the annual targets, aggregated to reflect annual targets from prior program

years, contained in the following four (4) year phased schedule, unless such schedule is adjusted

by the board in any given year:

      (1) By December 30, 2011: a minimum of five megawatts (5 MW) nameplate;

      (2) By December 30, 2012: a minimum aggregate of twenty megawatts (20 MW)

nameplate;

      (3) By December 30, 2013: a minimum aggregate of thirty megawatts (30 MW)

nameplate;

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      (4) By December 30, 2014: a minimum aggregate of forty megawatts (40 MW)

nameplate.

      (b) By October 15, 2011 and each calendar year following until October 15, 2013

October 15, 2015, the board may recommend to the commission that the annual target for the

following program year be adjusted upward to reflect any shortfalls in meeting the previous

program year's annual target or to reflect any standard contracts entered into during prior program

years that are voided. The board may also recommend to the commission that the annual target

for the following program year be adjusted downward by any amounts that the previous program

year's annual targets were exceeded by the standard contracts entered into during that program

year.

      (c) The board may, based on market data and other information available to it including

pricing for standard contracts received during previous program years, recommend a reduction of

the annual target for the upcoming program year where the board determines that market

conditions would be likely to produce unfavorably high target pricing for standard contracts

during that upcoming program year. In considering such issues, the board may take into account

the reasonableness of current pricing and its impact on all electric distribution customers who will

be paying for the output for up to twenty (20) years at such prices. The board may recommend

and the commission shall authorize an extension of time to achieve the forty megawatt (40 MW)

targets, to allow for contracting to occur after 2014 2016, if necessary.

      (d) The electric distribution company must contract for at least forty megawatts (40

MW) twenty megawatts (20 MW) of nameplate capacity distributed generation projects by the

end of 2014, each calendar year commencing on the effective date of this act through December

31, 2016 unless such schedule is extended by the board. The electric distribution company may

not be required to contract for more than forty megawatts (40 MW) twenty megawatts (20 MW)

or the distributed generation contract capacity, but may do so voluntarily, subject to commission

approval.

      (e) Each year, the board shall file its recommendations relating to the schedule, along

with its report and recommendations regarding ceiling prices, for the commission's review and

approval as specified in subsection 39-26.2-5(b).

      (f) Nothing in this chapter shall derogate from the statutory authority of the commission

or the division, including, but not limited to, the authority to protect ratepayers from unreasonable

rates.

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     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 PUBLIC UTILITIES AND CARRIERS - DISTRIBUTED GENERATION

STANDARD CONTRACTS

***

     This act would make a number of definitional and time-line changes to the provisions of

the Distributed Generation Standard Contracts Act.

     This act would take effect upon passage.

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