2016 -- S 2165

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LC003942

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2016

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS - REGULATORY POWERS OF

ADMINISTRATION

     Introduced By: Senators Lynch Prata, Doyle, and Gallo

     Date Introduced: January 27, 2016

     Referred To: Senate Commerce

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 39-3-1.2 of the General Laws in Chapter 39-3 entitled "Regulatory

Powers of Administration" is hereby amended to read as follows:

     39-3-1.2. Aggregation of electrical load by municipality or group of municipalities. --

(a) The legislative authority of a municipality may adopt an ordinance or resolution, under which

it may aggregate in accordance with this section one or more classes of the retail electrical loads

located, respectively, within the municipality or town and, for that purpose, may enter into service

agreements to facilitate for those loads the sale and purchase of electricity. The legislative

authority also may exercise this authority jointly with any other legislative authority. An

ordinance or resolution under this section shall specify whether the aggregation will occur only

with the prior consent of each person owning, occupying, controlling, or using an electric load

center proposed to be aggregated or will occur automatically for all persons pursuant to the opt-

out requirements of this section. Nothing in this section, however, authorizes the aggregation of

retail electric loads of an electric load center that is located in the certified territory of a nonprofit

electric supplier or an electric load center served by transmission or distribution facilities of a

municipal electric utility. If an ordinance or resolution adopted under this section specifies that

aggregation will occur automatically as described in this section, the ordinance or resolution shall

direct the board of canvassers to submit the question of the authority to aggregate to the electors

of the respective municipality or town at a special election on the day of the next primary or

general election in the municipality or town. The legislative authority shall certify a copy of the

ordinance or resolution to the board of canvassers not less than seventy-five (75) days before the

day of the special election. No ordinance or resolution adopted under this section that provides for

an election under this section shall take effect unless approved by a majority of the electors voting

upon the ordinance or resolution at the election held pursuant to this section.

      No legislative authority pursuant to an ordinance or resolution under this section that

provides for automatic aggregation as described in this section, shall aggregate the electrical load

of any electric load center located within its jurisdiction unless it in advance clearly discloses to

the person owning, occupying, controlling, or using the load center that the person will be

enrolled automatically in the aggregation program and will remain so enrolled unless the person

affirmatively elects by a stated procedure not to be so enrolled. The disclosure shall state

prominently the rates, charges, and other terms and conditions of enrollment. The stated

procedure shall allow any person enrolled in the aggregation program the opportunity at a

minimum to opt-out of the program every two (2) years, without paying a switching fee. Any

person that leaves the aggregation program pursuant to the stated procedure shall default to the

last resort service standard offer service until the person chooses an alternative supplier.

      A governmental aggregator under this section is not a public utility engaging in the

wholesale purchase and resale of electricity, and the aggregated service is not a wholesale utility

transaction. A governmental aggregator shall be subject to supervision and regulation by the

commission only as described herein to the extent of any competitive retail electric service it

provides and commission authority.

      A town may initiate a process to authorize aggregation by a majority vote of a town

meeting or of the town council. A city may initiate a process to authorize aggregation by a

majority vote of the city council, with the approval of the mayor, or the city manager. Two (2) or

more municipalities, as a group, initiate a process jointly to authorize aggregation by a majority

vote of each particular municipality as required in this section.

      Upon the applicable requisite authority under this section, the legislative authority shall

develop a plan of operation and governance for the aggregation program so authorized. Before

adopting a plan under this section, the legislative authority shall hold at least two (2) one public

hearings hearing on the plan. Before the first hearing, the legislative authority shall publish notice

of the hearings hearing once a week for two (2) consecutive weeks in a newspaper of general

circulation in the jurisdiction. The notice shall summarize the plan and state the date, time, and

location of each any hearing. A municipality or group of municipalities establishing load

aggregation pursuant to this section shall, in consultation with the commission, develop a plan,

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for review by its citizens, detailing the process and consequences of aggregation. The plan shall

identify which classes of customers may participate, based on their applicable electric distribution

company tariff or rate schedule. Any municipal load aggregation plan established pursuant to this

section shall provide for universal access to all applicable customers and equitable treatment of

applicable classes of customers and shall meet any requirements established by law or the

commission concerning aggregated service. The plan shall be filed with the commission, for its

final review and approval, and shall include, without limitation, an organizational structure of the

program, its operations, and its funding; methods of establishing rates and allocating costs among

participants; the methods for entering and terminating agreements with other entities; the rights

and responsibilities of program participants; and termination of the program. The plan must also

include the terms and conditions under which retail customers who have chosen to opt-out of the

aggregated service may take service from the aggregated entity. Prior to its decision, the

commission shall conduct a public hearing. Following approval of the plan, the legislative

authority may solicit bids from nonregulated power producers pursuant to the methods

established by the plan. The legislative authority shall report the results of this solicitation and

proposed agreement awards to the commission, which shall have five (5) business days in which

it may suspend such awards if the solicitation or awards are not in conformance with the plan or if

the cost for energy would in the first year exceed the cost of that energy on the standard offer, as

established pursuant to this chapter, for citizens in the municipality or group of municipalities,

unless the applicant can demonstrate that the cost for energy under the aggregation plan will be

lower than the standard offer in the subsequent years or the applicant can demonstrate that the

excess cost is due to the purchase of renewable energy as described by the commission. If the

commission does not suspend the proposed contract awards within five (5) business days of

filing, the legislative authority shall have the right to award the proposed agreements. The

legislative authority shall have the right to terminate or periodically suspend the operation of the

plan.

      Any retail customer in a municipality with an approved aggregation plan may elect

instead to receive retail supply from another licensed retail supplier or from the local distribution

company. Within thirty (30) days of the date the aggregated entity is fully operational, ratepayers

who have not affirmatively elected an alternative authorized supplier shall be transferred to the

aggregated entity subject to the opt-out provision in this section. Following adoption of

aggregation as specified above, the program shall allow any retail customer to opt-out and choose

any supplier or provider that the retail customer wishes. Nothing in this section shall be construed

as authorizing any city or town or any municipal retail load aggregator to restrict the ability of

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retail electric customers to obtain or receive service from any authorized provider of it.

      It shall be the duty of the aggregated entity to fully inform participating ratepayers in

advance of automatic enrollment that they are to be automatically enrolled and that they have the

right to opt-out of the aggregated entity without penalty. In addition, such disclosure shall

prominently state all charges to be made and shall include full disclosure of the standard offer

rate, how to access it, and the fact that it is available to them without penalty, if they are currently

on standard offer service. The commission shall furnish, without charge, to any citizen a list of all

other supply options available to them in a meaningful format that shall enable comparison of

price and product.

      (b) The commission shall may, from time to time, promulgate rules by which the

legislative authority may request information from the electric distribution company or

companies whose customers would be included in its plan. These rules shall ensure that

municipalities have reasonable and timely access to information pertinent to the formation of the

plan and solicitation of bids to serve customers, that confidentiality of individuals is protected,

that charges for production of data are reasonable and not unduly burdensome to the legislative

authority.

     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 - REGULATORY POWERS OF

ADMINISTRATION

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     This act would eliminate the need for a special election to create an opt-out municipal

energy aggregation plan initiated by any city or town subject to public utility commission

approval.

     This act would take effect upon passage.

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