2014 -- H 7786

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LC004486

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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 - CONTRACTING STANDARD FOR

RENEWABLE ENERGY

     Introduced By: Representative Arthur Handy

     Date Introduced: March 04, 2014

     Referred To: House Corporations

     (Division of Public Utilities & Carriers)

It is enacted by the General Assembly as follows:

     SECTION 1. Section 39-26.1-3 of the General Laws in Chapter 39-26.1 entitled "Long-

Term Contracting Standard for Renewable Energy" is hereby amended to read as follows:

     39-26.1-3. Long-term contract standard. -- (a) Beginning on or before July 1, 2010,

each electric-distribution company shall be required to annually solicit proposals from renewable-

energy developers and, provided commercially reasonable proposals have been received, enter

into long-term contracts with terms of up to fifteen (15) years for the purchase of capacity,

energy, and attributes from newly developed, renewable-energy resources. Subject to commission

approval, the electric-distribution company may enter into contracts for term lengths longer than

fifteen (15) years. Notwithstanding any other provisions of this chapter, on or before August 15,

2009, the electric-distribution company shall solicit proposals for one newly developed

renewable-energy-resources project as required in section §39-26.1-7. Proposals for the sale of

output from an offshore-wind project received under the provisions of this section shall be

diligently and fully considered without prejudice, regardless of the status of any proceedings

under sections §§39-26.1-7 or 39-26.1-8.

      (b) The timetable and method for solicitation and execution of such contracts shall be

proposed by the electric-distribution company, and shall be subject to review and approval by the

commission prior to issuance by the company; provided that the timetable is reasonably designed

to result in the electric-distribution company having the minimum long-term contract capacity

under contract within four (4) years of the date of the first solicitation; it is not necessary that the

projects associated with these contracts be operational within these four (4) years, as the

operational dates shall be specified in the contract. The electric-distribution company shall,

subject to review and approval of the commission, select a reasonable method of soliciting

proposals from renewable-energy developers, which shall include, at a minimum, an annual

public solicitation, but may also include individual negotiations. The solicitation process shall

permit a reasonable amount of negotiating discretion for the parties to engage in commercially

reasonable, arms-length negotiations over final contract terms. Each long-term contract entered

into pursuant to this section shall contain a condition that it shall not be effective without

commission review and approval. The electric-distribution company shall file such contract,

along with a justification for its decision, within a reasonable time after it has executed the

contract following a solicitation or negotiation. The commission shall hold public hearings to

review the contract within forty-five (45) days of the filing and issue a written order approving or

rejecting the contract within sixty (60) days ninety (90) days of the filing;. iIn rejecting a contract,

the commission may advise the parties of the reason for the contract being rejected and direct the

parties to attempt to address the reasons for rejection in a revised contract within a specified

period not to exceed ninety (90) days. The commission shall approve the contract if it determines

that: (1) tThe contract is commercially reasonable; (2) tThe requirements for the annual

solicitation have been met; and (3) tThe contract is consistent with the purposes of this chapter. A

report on each solicitation shall be filed with the commission each year within a reasonable time

after decisions are made by the electric distribution company regarding the solicitation results,

even if no contracts are executed following the solicitation.

      (c) (1) No electric distribution company shall be obligated to enter into long-term

contracts for newly developed renewable energy resources on terms which the electric-

distribution company reasonably believes to be commercially unreasonable; provided, however, if

there is a dispute about whether these terms are commercially unreasonable, the commission shall

make the final determination after an evidentiary hearing. The electric-distribution company shall

not be obligated to enter into long-term contracts pursuant to this section that would, in the

aggregate, exceed the minimum long-term contract capacity, but may do so voluntarily subject to

commission approval. As long as the electric-distribution company has entered into long-term

contracts in compliance with this section, the electric-distribution company shall not be required

by regulation or order to enter into power-purchase contracts with renewable-generation projects

for power, renewable-energy certificates, or any other attributes with terms of more than three (3)

years in meeting its applicable annual renewable portfolio standard requirements set forth in

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section §39-26-4 or pursuant to any other provision of the law.

      (2) Except as provided in section §§39-26.1-7 and 39-26.1-8, an electric distribution

company shall not be required to enter into long-term contracts for newly developed renewable

energy resources that exceed the following five (5) year phased schedule:

      By December 30, 2010: Twenty-five percent (25%) of the minimum, long-term contract

capacity;

      By December 30, 2011: Fifty percent (50%) of the minimum, long-term contract

capacity;

      By December 30, 2012: Seventy-five percent (75%) of the minimum, long-term contract

capacity;

      By December 30, 2014: One hundred percent (100%) of the minimum, long-term

contract capacity; but may do so earlier voluntarily, subject to commission approval.

      (d) Compliance with the long-term contract standard shall be demonstrated through

procurement pursuant to the provisions of a long-term contract of energy, capacity, and attributes

reflected in NE-GIS certificates relating to generating units certified by the commission as using

newly developed renewable-energy resources, as evidenced by reports issued by the NE-GIS

administrator and the terms of the contract; provided, however, that the NE-GIS certificates were

procured pursuant to the provisions of a long-term contract. The electric-distribution company

also may purchase other attributes from the generator as part of the long-term contract.

      (e) After the adoption of the rules and regulations promulgated by the commission

pursuant to this chapter, an electric-distribution company may, at its sole election, immediately

and from time to time, procure additional, commercially reasonable long-term contracts for newly

developed renewable-energy resources on an earlier timetable or above the minimum long-term

contract capacity, subject to commission approval.

     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 - CONTRACTING STANDARD FOR

RENEWABLE ENERGY

***

     This act would allow the public utilities commission ninety (90) days to approve or reject

long-term renewable energy contracts. The act would eliminate the forty-five (45) day hearing

deadline.

     This act would take effect upon passage.

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