2016 -- S 3045

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LC005971

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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 STATE AFFAIRS AND GOVERNMENT - DELIVERED FUELS ENERGY

EFFICIENCY PROGRAM

     Introduced By: Senator V. Susan Sosnowski

     Date Introduced: May 26, 2016

     Referred To: Senate Environment & Agriculture

     (Administration)

It is enacted by the General Assembly as follows:

     SECTION 1. Title 42 of the General Laws entitled "STATE AFFAIRS AND

GOVERNMENT" is hereby amended by adding thereto the following chapter:

CHAPTER 42-140.5

DELIVERED FUELS ENERGY EFFICIENCY PROGRAM

     42-140.5-1. Purpose. -- The purpose of this chapter is to facilitate and promote energy

efficiency services for Rhode Island residents, businesses, and customers who rely on delivered

fuels.

     42-140.5-2. Delivered fuels energy efficiency program established. -- A delivered

fuels energy efficiency program is hereby established with the intention of providing cost-

effective energy efficiency services for delivered fuels customers.

     42-140.5-3. Definitions. -- When used in this chapter, the following terms shall have the

following meanings:

     (1) "Advisory council" means the delivered fuels advisory council.

     (2) "Commissioner" means the commissioner of the office of energy resources.

     (3) "Delivered fuels" means heating oil and propane.

     (4) "Delivered fuels energy efficiency measures" means energy efficiency measures, and

the services associated with their delivery, that reduce the use of delivered fuels and are cost-

effective and lower cost than the acquisition of additional supply. Such measures may include,

but are not limited to, efficient delivered fuels heating equipment, weatherization for buildings

that heat with delivered fuels, or other delivered fuels energy efficiency measures as

recommended by the advisory council.

     (5) "Delivered fuels energy efficiency program" means a program supporting investment

in delivered fuels energy efficiency measures that are cost-effective and consistent with §39-1-

27.7.

     (6) "Heating oil" means the product designated by ASTM International as "Standard

Specification for Fuel Oils – ASTM D396," or the appropriate successor standard, which includes

No. 1 distillate, No. 2 distillate, Grade No. 4, Grade No. 5, and Grade No. 6 fuel oil, provided

such heating and fuel oil is used for purposes other than the generation of electricity or for the

generation of power to propel motor vehicles.

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

     (8) "Plan" means the annual delivered fuels energy efficiency program plan.

     (9) "Program fee" means the delivered fuels energy efficiency program fee.

     (10) "Program year" means the period from October 1 to September 30 of the following

year.

     (11) "Propane" means the product designated by ASTM International as "Standard

Specification for Liquefied Petroleum (LP) Gases – ASTM D1835," or the appropriate successor

standard, provided such propane is used for purposes other than the generation of electricity or for

the generation of power to propel motor vehicles.

     42-140.5-4. Advisory Council. -- (a) The Rhode Island delivered fuels advisory council

is hereby established to advise the office on matters pertaining to the delivered fuels energy

efficiency program.

     (b) The advisory council shall consist of seven (7) members to be appointed by the

governor. Council members shall represent the following constituencies:

     (1) Residential delivered fuels users;

     (2) Commercial and industrial delivered fuels users;

     (3) Low-income delivered fuels users;

     (4) American Petroleum Institute, or its successor organization;

     (5) Oil Heat Institute of Rhode Island, or its successor organization;

     (6) Propane gas association of New England, or its successor organization; and

     (7) Members of the public with expertise in environmental policy and energy

conservation. The governor shall appoint the chairperson and vice-chairperson of the advisory

council from among its members. The commissioner of the office of energy resources shall be the

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executive secretary and executive director of the advisory council from among its members.

     (c) Of the initial appointments, three (3) members shall be appointed for a term of two (2)

years, two (2) members shall be appointed for a term of three (3) years, and two (2) members

shall be appointed for a term of four (4) years; thereafter members of the advisory council shall

be appointed for a term of three (3) years and may be reappointed at the discretion of the

governor.

     (d) A simple majority of the total number of voting members shall constitute a quorum.

     (e) A vacancy, other than by expiration, shall be filled in the manner of the original

appointment, but only for the unexpired portion of the term, provided the replacement is selected

in accordance with the requirements of §42-140.5-4(b). The governor shall have the power to

remove an appointee for just cause.

     (f) The members of the advisory council shall not be compensated for their service.

     42-140.5-6. Duties of the Advisory Council. -- The advisory council shall have the

following duties:

     (1) Advise the office with regard to the implementation of the delivered fuels energy

efficiency program;

     (2) Develop and issue recommendations on the plan;

     (3) Recommend a program administrator for the delivered fuels energy efficiency

program; and

     (4) Monitor and evaluate the cost-effectiveness of the delivered fuels energy efficiency

program and plans.

     42-140.5-7. Delivered fuels energy efficiency program fee. -- (a) Effective October 1,

2016 and for a period of five (5) years thereafter, a delivered fuels energy efficiency program fee

is hereby established.

     (1) For the first program year, the program fee shall be half a cent ($0.0050) per gallon of

delivered fuels.

     (2) For the second program year, the program fee shall be three-quarters of a cent

($0.0075) per gallon of delivered fuels.

     (3) For the third program year, the program fee shall be three-quarters of a cent ($0.0075)

per gallon of delivered fuels.

     (4) For the fourth program year, the program fee shall be one cent ($0.01) per gallon of

delivered fuels.

     (5) For the fifth program year, the program fee shall be one cent ($0.01) per gallon of

delivered fuels.

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     (b) For heating oil, the program fee for the program year shall be imposed upon the

owner of heating oil received at a Rhode Island marine terminal within this state by means of a

vessel from a point outside this state. Such fuel shall be the product metered on the seaside

portion of the flange of said marine terminal. The fee shall be remitted to the division of taxation

on the thirtieth day of each month based upon the number of gallons of heating oil received

during the preceding month and transferred to the office. The funds deposited to the office shall

be exempt from the indirect cost recovery provisions of §35-4-27. Any funds not expended in any

program year shall remain with the office to be used for purposes consistent with the plan for

subsequent program years of the delivered fuels energy efficiency program.

     (c) The program fee for the program year shall be imposed on every retail transaction of

propane sold within the state. The fee collected shall be remitted to the division of taxation on the

thirtieth day of each month based upon the number of gallons of retail propane sold during the

preceding month and transferred to the office. The funds deposited to the office shall be exempt

from the indirect cost recovery provisions of §35-4-27. Any funds not expended in any program

year shall remain with the office to be used for purposes consistent with the plan for subsequent

program years of the delivered fuels energy efficiency program.

     (d) Whenever the commissioner, in consultation with the advisory council and the

division of taxation, estimates that the total amount of funds deposited to the office during a

single calendar year will reach the designated amount specified in subsection (e) of this section,

and the money is not required for the purposes specified in §42-140.5-8, the commissioner shall

instruct the division of taxation to cease collecting the fee.

     (e) For the purposes of this chapter, "designated amount" means an amount equal to two

million dollars ($2,000,000), adjusted for inflation after January 1, 2017, according to an index

which the commissioner may reasonably choose.

     42-140.5-8. Annual delivered fuels energy efficiency program. -- (a) The advisory

council shall develop and issue recommendations for an annual delivered fuels energy efficiency

program plan that determines how the funds collected under §42-140.5-7 shall be delivered to

facilitate and promote energy efficiency services for delivered fuels customers during the

upcoming program year. The plan shall include suggested program designs, cost and energy

savings, target benefit-cost ratios, delivery mechanisms, and a budget. Notwithstanding the

provisions of §42-140.5-3(5), the advisory council may recommend a reasonable portion of

program funds to be used for offsetting the incremental costs of the program fee as borne

specifically by low-income delivered fuels customers. The advisory council shall consult with the

office and the energy efficiency and resource management council during development of the

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plan. The use of the funds shall be solely for supporting investment in delivered fuels energy

efficiency measures and shall not be used for any other purposes or fuel types. The commissioner

shall have final approval of the annual delivered fuels energy efficiency program plan.

     (b) On or before March 1, 2017, the office, after consultation with the advisory council,

shall select a qualified third-party entity to support plan development and administer the

implementation of the delivered fuels energy efficiency program pursuant to a competitive

solicitation process administered, in accordance with state purchasing guidelines. The office shall

enter into a contract not to exceed three (3) years with the third-party entity recommended by the

advisory council. The competitive bid and contract award for administration of the delivered fuels

energy efficiency program shall include as a condition that the account for the delivered fuels

energy efficiency program shall be maintained and administered by the office. After three (3)

years, the office, in consultation with the advisory council, shall issue a new request for

proposals. The office, in consultation with the advisory council, shall have the option to propose

an alternative implementation model for the delivered fuels energy efficiency program in lieu of

the third-party solicitation.

     (c) On or before October 1, 2017, and annually thereafter through October 1, 2021, the

advisory council shall recommend the annual delivered fuels energy efficiency program plan to

the office. The annual plans shall include a review of program cost-effectiveness. The annual plan

for the final program year shall include recommendations for the disbursement of any funds

remaining with the office after the end of that program year consistent with the purposes of this

chapter. The commissioner shall approve the plan if the commissioner determines that the plan is

consistent with the provisions of this section and §39-1-27.7. The commissioner shall issue an

order on the plan no later than thirty (30) days after it is submitted to the office. The plan shall be

made public and be posted electronically on the website of the office.

     (d) Effective October 1, 2016, the office shall allocate from the funds authorized pursuant

to this chapter, an amount not to exceed five percent (5%) of such funds on an annual basis for

reasonable administration costs of the advisory council associated with planning, management,

and evaluation of the delivered fuels energy efficiency program, and for the retention of expert

consultants by the advisory council, provided that the consultants are not the program

administrator or a contractor to the program, and shall not have any contractual relationship with

members of the council or the program administrator.

     (e) Effective October 1, 2016, the office shall allocate an amount for reasonable

administrative costs of the office for this program, which shall be five percent (5%) of the funds

authorized pursuant to this chapter each program year.

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     42-140.5-9. Reporting. -- On April 15 of each year the office and the advisory council

shall submit to the governor, the speaker of the house of representatives and the president of the

senate, a financial and performance report regarding the delivered fuels energy efficiency

program, including, but not limited to, the number of participants in the program, jobs associated

with the program, and the businesses and vendors that received funding from the delivered fuels

energy efficiency program. These reports shall also be posted electronically on the website of the

office.

     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 - DELIVERED FUELS ENERGY

EFFICIENCY PROGRAM

***

     This act would create the delivered fuels energy efficiency program, the purpose of which

would be to facilitate and promote energy efficiency services for Rhode Island residents,

businesses, and customers who rely on delivered fuels.

     This act would take effect upon passage.

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