2017 -- H 6184

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LC002576

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2017

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- PUBLIC UTILITIES COMMISSION

     

     Introduced By: Representative Raymond H. Johnston

     Date Introduced: May 03, 2017

     Referred To: House Corporations

     (Lieutenant Governor)

It is enacted by the General Assembly as follows:

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     SECTION 1. Section 39-1-27 of the General Laws in Chapter 39-1 entitled "Public

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Utilities Commission" is hereby amended to read as follows:

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     39-1-27. Electric distribution companies required to file restructuring plans.

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     (a) Each electric distribution company shall file with the commission a plan for

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transferring ownership of generation facilities into a separate affiliate of the electric distribution

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company. The transmission facilities owned by the electric distribution company also may be

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transferred to an affiliated electric transmission company at a price that shall equal the book value

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of the transmission facilities on the electric distribution company's accounts net of depreciation

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and deferred taxes as the date of transfer, but such a transfer is not required. The generation plant,

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equipment, and facilities owned by an electric distribution company shall be transferred to an

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affiliate that is a nonregulated power producer at a price that shall equal the book value of the

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generation plant, equipment, and facilities on the electric distribution company's accounts net of

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depreciation and deferred taxes as of the date of the transfer. Consistent with the schedule for

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implementing retail access in § 39-1-27.3, each electric transmission company shall file tariffs

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with the federal energy regulatory commission (FERC) and electric distribution companies shall

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file tariffs with the commission. The tariffs will provide the terms, conditions and rates for

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nondiscriminatory access to transmission and distribution facilities to wholesale and retail

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customers and to nonregulated power producers. The tariffs shall (1) conform to the standards,

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policies, and requirements of the federal energy regulatory commission or the commission as

 

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appropriate with respect to nondiscriminatory access to transmission and distribution services, (2)

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fulfill such standards with respect to both transmission and distribution services for the benefit of

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both wholesale and retail customers and their suppliers, and (3) provide retail access in

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accordance with the schedule set forth in § 39-1-27.3. For purposes of this section,

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"nondiscriminatory access" means access to transmission and distribution services on rates, terms

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and conditions found to be reasonable by the FERC or the commission as appropriate and applied

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consistently to all customers in a rate class regardless of their supplier. When establishing terms

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and conditions for distribution service, the commission shall implement standards, policies, and

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requirements consistent with those established by the federal energy regulatory commission for

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transmission service unless it determines that alternative terms and conditions are in the public

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interest.

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     (b) The commission shall review the plan within six (6) months of filing and if the plan is

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in compliance with chapter 3 of this title, shall authorize the property transfers, securities

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issuances, and affiliate transactions pursuant to this title and shall grant all necessary regulatory

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approvals. All existing state and local rights, authorizations, and approvals, including but not

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limited to, permits, licenses, locations, indentures, leases, orders, or similar rights associated with

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the ownership and operation of plant and equipment, shall be deemed transferred with the

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associated plant and equipment upon the commission's authorization of the transfer effective as of

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the date of transfer. Notwithstanding any provisions of this section, if the electric distribution

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company's wholesale power supplier chooses to transfer its generation assets to a nonaffiliate of

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the electric distribution company for purposes of carrying out the market valuation required by §

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39-1-27.4(g), and such transfer to a nonaffiliate is specified in the electric distribution company's

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restructuring plan filed with the commission pursuant to subsection (a) of this section, the transfer

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of the electric distribution company's interest in the generation facilities may be made directly to

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the nonaffiliate. In the case of such a transfer directly to a nonaffiliate, all of the state and local

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rights, authorizations and approvals, including those enumerated above, shall be deemed

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transferred with the associated plant and equipment upon the commission's authorization of the

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transfer effective as of the date of the transfer.

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     (c) The electric distribution company shall implement the corporate reorganizations and

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property transfers specified in such restructuring plan, terminate its all requirements contract with

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its wholesale power supplier on the terms set forth in § 39-1-27.4 and provide retail access for all

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customers in Rhode Island with a standard offer as set forth in § 39-1-27.3 no later than three (3)

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months after retail access is available to forty percent (40%) or more of the kilowatt-hour sales in

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New England. The commission may extend this time if it determines that additional time is

 

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necessary to implement the transactions on reasonable terms and in accordance with a reasonable

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schedule; provided, however, that nothing in this section shall be construed to limit the effect of §

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39-1-27.3 or permit the commission to unduly discriminate in providing retail access among or

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within rate classes.

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     (d) Following the complete implementation of the restructuring plans, electric

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distribution companies shall be prohibited from selling electricity at retail and from owning,

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operating, or controlling generating facilities, although such facilities may be owned by affiliates

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of electric distribution companies. For purposes of this paragraph providing the standard offer

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service and last resort power supply in accordance with subsections (d) and (f) of § 39-1-27.3

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shall not be construed as selling electricity at retail.

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     (1) The commission shall not approve ratepayer-backed, long-term contracts by electric

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distribution companies for gas capacity; and

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     (2) The commission shall not approve any rate increase for an electric distribution

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company to finance the construction or expansion of natural gas pipelines or related facilities.

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     (e) Following the termination of the electric distribution company's contracts with its

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wholesale power supplier, the wholesale power supplier shall become a nonregulated power

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producer, and shall be free, subject to the requirements of the standard offer set forth in § 39-1-

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27.3(e) and retail electric licensing commission plan requirements pursuant to § 39-1-27.1 to sell

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electricity generated from each of its facilities on either the wholesale or retail markets at market

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prices, either directly or through an affiliate, which shall also become a nonregulated power

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producer. The former wholesale power supplier and its affiliates shall be free to apply to become

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exempt wholesale generators pursuant to section 32 of the Public Utility Holding Company Act

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of 1935, 15 U.S.C. § 79z-5a, and other federal law, rules and regulations, and each and every

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generating facility of the former wholesale power supplier shall become an eligible facility

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pursuant to that statute. Accordingly, the legislature hereby finds and declares that the division

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has sufficient regulatory authority, resources, access to books and records to exercise its duties;

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and that the full participation of former wholesale power suppliers and affiliated nonregulated

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power producers in the market and the designation of each of the former wholesale power

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supplier's facilities as eligible facilities will benefit consumers, is consistent with state law, will

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not provide any unfair competitive advantage by virtue of their status as a former wholesale

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power supplier or as affiliates of electric distribution companies, and is in the public interest.

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     (f) Although reducing air emissions from power plants is a goal of electricity industry

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restructuring, power plants in Rhode Island already have low emissions relative to their

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counterparts in other states. For this reason, it is unnecessary for the restructuring plans required

 

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by this section to address in-state air emission reductions. However, to the extent a wholesale

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power supplier receiving contract termination fees pursuant to § 39-1-27.4(b)(4) owns and

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operates as of December 31, 1995 fossil fired generation in another state which does not meet air

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emission standards applicable as of that date to new electric generating facilities in that state, such

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wholesale power suppliers shall cooperate with the appropriate environmental officials in the

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state or states where such generating facilities are located to develop a plan for reducing the

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emissions of nitrogen oxides, sulfur dioxide, and particulate matter from such plants on an overall

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basis through retirements, replacements, controls or offsets or any combination of the above

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toward the air emissions standards applicable to new electric generating facilities in effect in the

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state or states where the plants are located as of January 1, 1996. Such plans shall be implemented

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in connection with electric industry restructuring in the state or states where the generating

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facilities are located.

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     (g) An electric distribution company, whether public, quasi-municipal or investor owned,

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that as of January 1, 1996 did not purchase power at wholesale from a wholesale power supplier

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under an all requirements contract shall include proposals for recovering transition costs

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consistent with the elements which would be comparable in nature to the elements included in

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termination fees pursuant to § 39-1-27.4(b) through (g) and for providing a standard offer

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consistent with requirements of § 39-1-27.3(d) in its plan filed with the commission pursuant to

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this section. The filing by an electric distribution company that is a quasi-municipal corporation

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shall also address any unique circumstances affecting the electric distribution company including

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special contract requirements or charter restrictions and the conditions that the quasi-municipal

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corporation must satisfy in order to participate in retail competition. In reviewing the filing and

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determining the appropriate level of transition cost recovery, the commission shall apply

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standards consistent with those contained in § 39-1-27.4(b) through (g) and with this subsection.

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The commission shall be authorized to take any action or to grant any approval necessary to

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maintain hydro-electric power purchases from the Niagara and St. Lawrence power projects by

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quasi-municipal corporations. Notwithstanding any other provision of this section, quasi-

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municipal electric distribution companies that purchase hydro-electric power from the Niagara

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and St. Lawrence power projects shall be authorized to continue to resell such power to

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residential customers within their service territories. After notice and public hearing, the

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commission may exempt electric distribution companies subject to this paragraph from: (1) the

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requirement to transfer ownership of generation and transmission facilities to affiliated companies

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pursuant to subsection (a); and (2) the prohibition against selling electricity at retail pursuant to

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subsection (d) of this section with respect to sales within the service territory of such electric

 

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distribution company, if it determines that such exemptions are in the public interest.

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     (h) With the exception of the requirements of the standard offer set forth in § 39-1-

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27.3(e) and (f) and retail electric licensing commission plan requirements pursuant to § 39-1-27.1,

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nothing in this section shall be construed or interpreted to constrain the application of anti-trust

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laws to nonregulated power producers, whether affiliated or not with an electric distribution

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company.

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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 -- PUBLIC UTILITIES COMMISSION

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     This act would preclude electric distribution companies from including their gas

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transmission contracts or cost of facilities in the rate base for electricity customers.

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     This act would take effect upon passage.

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