2015 -- H 5923

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LC001960

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2015

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS

     Introduced By: Representative Cale P. Keable

     Date Introduced: March 18, 2015

     Referred To: House Corporations

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 39-1-27.3 of the General Laws in Chapter 39-1 entitled "Public

Utilities Commission" is hereby amended to read as follows:

     39-1-27.3. Electric distribution companies required to provide retail access,

standard offer and last resort service. -- Electric Distribution Companies required to

provide retail access, standard offer and last resort service. -- (a) To promote economic

development and the creation and preservation of employment opportunities within the state, each

electric distribution company Electric Distribution Company, except Pascoag utility district, a

quasi-municipal corporation, district and subdivision of the state ("Electric Distribution

Company"), shall offer retail access from nonregulated power producers to all customers.

      (b) Through year 2009, and effective July 1, 2007, through year 2020, each electric

distribution company Electric Distribution Company shall arrange for a standard power supply

offer ("standard offer") to customers that have not elected to enter into power supply

arrangements with other nonregulated power suppliers. The rates that are charged by the electric

distribution company Electric Distribution Company to customers for standard offer service shall

be approved by the commission and shall be designed to recover the electric distribution

company's Electric Distribution Company's costs and no more than the electric distribution

company's Electric Distribution Company's costs; provided, that the commission may establish

and/or implement a rate that averages the costs over periods of time. The electric distribution

company Electric Distribution Company shall not be entitled to recover any profit margin on the

sale of standard offer power, except with approval of the commission as may be necessary to

implement fairly and effectively, system reliability and least-cost procurement. The electric

distribution company Electric Distribution Company will be entitled to recover its costs incurred

from providing the standard offer arising out of: (1) wholesale standard offer supply agreements

with power suppliers in effect prior to January 1, 2002; (2) power supply arrangements that are

approved by the commission after January 1, 2002; (3) power supply arrangements made

pursuant to §§ 39-1-27.3.1 and 39-1-27.8; and (4) any other power supply related arrangements

prudently made after January 1, 2002 to provide standard offer supply or to mitigate standard

offer supply costs, including costs for system reliability, procurement and least-cost procurement,

as provided for in § 39-1-27.7. Subject to commission approval, the electric distribution company

Electric Distribution Company may enter into financial contracts designed to hedge fuel-related

or other variable costs associated with power supply arrangements and the costs of any such

financial contracts shall be recoverable in standard offer rates. The electric distribution company's

Electric Distribution Company's standard offer revenues and its standard offer costs shall be

accounted for and reconciled with interest at least annually. Except as otherwise may be directed

by the commission in order to accomplish purposes established by law, any over recoveries shall

be refunded to customers in a manner directed by the commission, and any under recoveries shall

be recovered by the electric distribution company Electric Distribution Company through a

uniform adjustment factor approved by the commission. The commission shall have the

discretion to apply such adjustment factor in any given instance to all customers or to such

specific class of customers that the commission deems equitable under the circumstances

provided that the distribution company recovers any under recovery in its entirety. Once a

customer has elected to enter into a power supply arrangement with a nonregulated power

producer, the electric distribution company Electric Distribution Company shall not be required

to arrange for the standard offer to such customer except as provided in § 39-1-27.3.1. No

customer who initially elects the standard offer and then chooses an alternative supplier shall be

required to pay any withdrawal fee or penalty to the provider of the standard offer unless such a

penalty or withdrawal fee was agreed to as part of a contract; however, no residential customer

shall be required to pay a penalty or withdrawal fee for choosing an alternative supplier. Nothing

in this subsection shall be construed to restrict the right of any nonregulated power producer to

offer to sell power to customers at a price comparable to that of the standard offer specified

pursuant to this subsection. The electric distribution company Electric Distribution Company may

not terminate an existing standard offer wholesale supply agreement without the written consent

of the division.

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      (c) In recognition that electricity is an essential service, each electric distribution

company Electric Distribution Company shall arrange for a last resort power supply for

customers who have left the standard offer for any reason and are not otherwise receiving electric

service from nonregulated power producers. The electric distribution company Electric

Distribution Company shall procure last resort service supply from wholesale power suppliers.

Prior to acquiring last resort supply, the electric distribution company Electric Distribution

Company will file with the commission a supply acquisition plan or plans that include the

acquisition procedure, the pricing options being sought, and a proposed term of service for which

last resort service will be acquired. The term of service may be short or long term and

acquisitions may occur from time to time and for more than one supplier for segments of last

resort service load over different terms, if appropriate. All the components of the acquisition

plans, however, shall be subject to commission review and approval. Once an acquisition plan is

approved by the commission, the electric distribution company Electric Distribution Company

shall be authorized to acquire last resort service supply consistent with the approved acquisition

plan and recover its costs incurred from providing last resort service pursuant to the approved

acquisition plan. The commission may periodically review the acquisition plan to determine

whether it should be prospectively modified due to changed market conditions. The commission

shall have the authority and discretion to approve special tariff conditions and rates proposed by

the electric distribution company Electric Distribution Company that the commission finds are in

the public interest, including without limitation: (1) short and long term optional service at

different rates; (2) term commitments or notice provisions before individual customers leave last

resort service; (3) last resort service rates for residential or any other special class of customers

that are different than the rates for other last resort customers; and/or (4) last resort service rates

that are designed to encourage any class of customers to return to the market. The electric

distribution company's Electric Distribution Company's last resort service revenues and its last

resort service costs shall be accounted for and reconciled with interest at least annually. Any over

recoveries shall be refunded and any under recoveries shall be recovered by the electric

distribution company Electric Distribution Company through a uniform adjustment factor

approved by the commission. The commission shall have the discretion to apply such adjustment

factor in any given instance to all customers or to such specific class of customers that the

commission deems equitable under the circumstances provided that the distribution company

recovers any under recovery in its entirety. Nothing in this section shall be construed to prohibit

an electric distribution company Electric Distribution Company from terminating service

provided hereunder in accordance with commission rules and regulations in the event of

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nonpayment of this service. The commission may promulgate regulations to implement this

section including the terms and conditions upon which last resort service is offered and provided

to customers.

      (d) If a customer being served by a nonregulated power producer pays any taxes assessed

for electric service to the electric distribution company Electric Distribution Company and the

electric distribution company Electric Distribution Company forwards such tax payment for the

power portion of the bill to a nonregulated power producer for payment by the nonregulated

power producer to the state, neither the customer nor the electric distribution company Electric

Distribution Company shall be liable for such taxes forwarded if the nonregulated power

producer fails to remit such taxes to the state for any reason.

     SECTION 2. Sections 45-58-3 and 45-58-8 of the General Laws in Chapter 45-58

entitled "Pascoag Utility District" are hereby amended to read as follows:

     45-58-3. Statement of purpose. -- This chapter is intended to: (1) establish the Pascoag

utility district as the successor to the utility functions fulfilled prior to April 4, 2001 by the

Pascoag fire district; (2) provide for the orderly separation and transfer of those utility functions

and related utility assets and utility bond obligations (without impairment thereof) from the

Pascoag fire district to the utility district; (3) provide for the retention and fulfillment of the fire

protection functions and fire protection assets of the Pascoag fire district by the fire district; and

(4) authorize and enable the utility district to provide additional utility services, function as a

nonregulated power producer and otherwise to contribute to the development of effective

competition in the state's electricity and communications industries, in accordance with the

legislature's findings as to the efficacy of competition in the Utility Restructuring Act of 1996, as

amended, and to provide such other utility products and services as may be authorized from time

to time by the utility district's board of utility commissioners.

     45-58-8. Powers of the Utility District. -- The utility district shall have the power:

      (1) To acquire real or personal property and tangible or intangible personal property by

voluntary purchase from the owner or owners of the property, and to the extent that the board of

utility commissioners deems it advisable, to acquire property held by a corporation through

acquisition of the stock of the corporation and dissolution of the corporation;

      (2) To acquire real property, fixtures and rights and interests in real property within its

utility service area by eminent domain, subject to the supervision of the public utilities

commission in the manner prescribed in § 39-1-31;

      (3) To own, operate, maintain, repair, improve, enlarge and extend, in accordance with

the provisions of this chapter, any property acquired under this section all of which, together with

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the acquisition of the property, are hereby declared to be public purposes;

      (4) To produce, purchase, acquire, distribute and sell water and electricity at wholesale

or retail within or without its utility service area subject to franchise rights of other utilities; to lay

down, construct, own, operate, maintain, repair and improve mains, pipes, wells, towers and other

equipment and facilities necessary, appropriate or useful for those purposes; and to contract with

others for any or all of the foregoing purposes;

      (5) To produce, buy, sell and trade electric capability, power or energy products or

services at wholesale or retail; to purchase for its own use or for resale electric transmission

service and ancillary services; and to engage in any other transaction with respect to electricity or

electricity products that was heretofore authorized for the Pascoag fire district or investor-owned

electric companies operating as domestic electric utilities with within the state (including

participation in generating facilities as authorized by chapter 20 of title 39); provided, that the

utility district shall operate and be subject to regulation of its retail rates for electricity under title

39 of the general laws when operating within its utility service area;

      (6) To operate as a nonregulated power producer within the meaning and contemplation

of § 39-1-2(19) when engaging in the sale of electricity at retail outside of its utility service area;

      (7)(6) To acquire, own, lease, operate, maintain, repair and expand facilities and

equipment necessary, appropriate or useful to the operation of other utilities, including, but not

limited to, communications services such as internet service, high speed data transfer, local and

long distance telephone service, community antenna television service, and to engage in the

operation of such utilities;

      (8)(7) To sue and be sued;

      (9)(8) To adopt and alter a corporate seal;

      (10)(9) To acquire, hold, use, lease, sell, transfer, assign or otherwise dispose of any

property, real, personal or mixed, or any interest therein for its corporate purposes, and to

mortgage, pledge or lease any such property;

      (11)(10) To make and adopt bylaws for the management and regulation of its affairs;

      (12)(11) To borrow money for any of the purposes or powers granted to it under or by

operation of this chapter, including the creation and maintenance of working capital, and to issue

negotiable bonds, notes or other obligations, to fund or refund the same, and to secure the

obligation of such bond, notes or other obligations in any case by pledge of or security interest in

the revenues and property of the utility district.

      (13)(12) To fix rates (subject to the requirements of title 39 of the general laws in the

case of retail electric rates within its utility service area) and collect charges for the use of the

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facilities or services rendered by or any commodities furnished by the utility district;

      (14)(13) To contract in its own name for any lawful purpose which would effectuate the

purposes and provisions of this chapter; to execute all instruments necessary to carry out the

purposes of this chapter; and to do all things necessary or convenient to carry into effect and

operation the powers granted by this chapter; and

      (15)(14) Until and only until such time as those utility bond obligations to which the

Pascoag utility district succeeds under or by operation of this chapter shall have been retired,

defeased or otherwise satisfied in their entirety, to levy property tax assessments upon property

owners within its utility service area for the purpose of supporting utility bond obligations of the

Pascoag fire district outstanding as of April 4, 2001 in the same manner and to the same extent as

the Pascoag fire district was authorized to do so under the act passed at the May session 1887,

entitled "An Act to Incorporate the Pascoag Fire District" as thereafter amended and

supplemented from time to time.

     SECTION 3. This act shall take effect upon passage.

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LC001960

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EXPLANATION

BY THE LEGISLATIVE COUNCIL

OF

A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS

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     This act would provide that the Pascoag utility district not be required to provide retail

access from nonregulated power producers, and not operate as a nonregulated power producer

when selling electricity at retail outside of its service area.

     This act would take effect upon passage.

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