2018 -- H 7661

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LC003939

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     STATE OF RHODE ISLAND

IN GENERAL ASSEMBLY

JANUARY SESSION, A.D. 2018

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A N   A C T

RELATING TO PUBLIC UTILITIES AND CARRIERS -- DUTIES OF UTILITIES AND

CARRIERS

     Introduced By: Representatives Regunberg, Diaz, Handy, Morin, and Shekarchi

     Date Introduced: February 15, 2018

     Referred To: House Finance

     It is enacted by the General Assembly as follows:

     SECTION 1. Section 39-2-1.2 of the General Laws in Chapter 39-2 entitled "Duties of

Utilities and Carriers" is hereby amended to read as follows:

     39-2-1.2. Utility base rate -- Advertising, demand-side management and renewables.

     (a) In addition to costs prohibited in § 39-1-27.4(b), no public utility distributing or

providing heat, electricity, or water to or for the public shall include as part of its base rate any

expenses for advertising, either direct or indirect, that promotes the use of its product or service,

or is designed to promote the public image of the industry or utility. No public utility may furnish

support of any kind, direct or indirect, to any subsidiary, group, association, or individual for

advertising and include the expense as part of its base rate. Nothing contained in this section shall

be deemed as prohibiting the inclusion in the base rate of expenses incurred for advertising,

informational or educational in nature, that is designed to promote public safety conservation of

the public utility's product or service. The public utilities commission shall promulgate such rules

and regulations as are necessary to require public disclosure of all advertising expenses of any

kind, direct or indirect, and to otherwise effectuate the provisions of this section. The public

utilities commission shall periodically review the advertising expense passed through in utility

rates to determine, for advertising that is a combination of informational or educational in nature,

that is designed to promote public safety, conservation of the public utility's product or service,

and also promotes the public image of the utility, the percentage of the expense that should be

deemed allowable and the percentage that should be excluded from the utility's rates.

     (b) Effective as of January 1, 2008, and for a period of fifteen (15) years thereafter, each

electric-distribution company shall include a charge per kilowatt-hour delivered to fund demand-

side management programs. The 0.3 mills per kilowatt-hour delivered to fund renewable energy

programs shall remain in effect until December 31, 2022. The electric-distribution company shall

establish and, after July 1, 2007, maintain, two (2) separate accounts, one for demand-side

management programs (the "demand-side account"), which shall be funded by the electric

demand-side charge and administered and implemented by the distribution company, subject to

the regulatory reviewing authority of the commission, and one for renewable-energy programs,

which shall be administered by the Rhode Island commerce corporation pursuant to § 42-64-13.2

and shall be held and disbursed by the distribution company as directed by the Rhode Island

commerce corporation for the purposes of developing, promoting, and supporting renewable

energy programs.

     During the time periods established in this subsection, the commission may, in its

discretion, after notice and public hearing, increase the sums for demand-side management and

renewable resources. In addition, the commission shall, after notice and public hearing, determine

the appropriate charge for these programs. The office of energy resources, and/or the

administrator of the renewable energy programs, may seek to secure for the state an equitable and

reasonable portion of renewable energy credits or certificates created by private projects funded

through those programs. As used in this section, "renewable-energy resources" shall mean: (1)

Power generation technologies, as defined in § 39-26-5, "eligible renewable-energy resources",

including off-grid and on-grid generating technologies located in Rhode Island, as a priority; (2)

Research and development activities in Rhode Island pertaining to eligible renewable-energy

resources and to other renewable-energy technologies for electrical generation; or (3) Projects and

activities directly related to implementing eligible renewable-energy resources projects in Rhode

Island. Technologies for converting solar energy for space heating or generating domestic hot

water may also be funded through the renewable-energy programs. Fuel cells may be considered

an energy efficiency technology to be included in demand-sided management programs. Special

rates for low-income customers in effect as of August 7, 1996, shall be continued, and the costs of

all of these discounts shall be included in the distribution rates charged to all other customers.

Nothing in this section shall be construed as prohibiting an electric-distribution company from

offering any special rates or programs for low-income customers which are not in effect as of

August 7, 1996, subject to the approval by the commission.

     (1) The renewable energy investment programs shall be administered pursuant to rules

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established by the Rhode Island commerce corporation. Said rules shall provide transparent

criteria to rank qualified renewable-energy projects, giving consideration to:

     (i) The feasibility of project completion;

     (ii) The anticipated amount of renewable energy the project will produce;

     (iii) The potential of the project to mitigate energy costs over the life of the project; and

     (iv) The estimated cost per kilowatt hour (kwh) of the energy produced from the project.

     (c) [Deleted by P.L. 2012, ch. 241, art. 4, § 14].

     (d) The chief executive officer of the commerce corporation is authorized and may enter

into a contract with a contractor for the cost-effective administration of the renewable-energy

programs funded by this section. A competitive bid and contract award for administration of the

renewable-energy programs may occur every three (3) years and shall include, as a condition, that

after July 1, 2008, the account for the renewable-energy programs shall be maintained and

administered by the commerce corporation as provided for in subsection (b) of this section.

     (e) Effective January 1, 2007, and for a period of sixteen (16) years thereafter, each gas-

distribution company shall include, with the approval of the commission, a charge per deca therm

delivered to fund demand-side management programs (the "gas demand-side charge"), including,

but not limited to, programs for cost-effective energy efficiency, energy conservation, combined

heat and power systems, and weatherization services for low-income households.

     (f) Each gas company shall establish a separate account for demand-side management

programs (the "gas demand-side account") that shall be funded by the gas demand-side charge

and administered and implemented by the distribution company, subject to the regulatory

reviewing authority of the commission. The commission may establish administrative

mechanisms and procedures that are similar to those for electric demand-side management

programs administered under the jurisdiction of the commission and that are designed to achieve

cost-effectiveness and high, life-time savings of efficiency measures supported by the program.

     (g) The commission may, if reasonable and feasible, except from this demand-side

management charge:

     (i) Gas used for distribution generation; and

     (ii) Gas used for the manufacturing processes, where the customer has established a self-

directed program to invest in and achieve best-effective energy efficiency in accordance with a

plan approved by the commission and subject to periodic review and approval by the

commission, which plan shall require annual reporting of the amount invested and the return on

investments in terms of gas savings.

     (h) The commission may provide for the coordinated and/or integrated administration of

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electric and gas demand-side management programs in order to enhance the effectiveness of the

programs. Such coordinated and/or integrated administration may after March 1, 2009, upon the

recommendation of the office of energy resources, be through one or more third-party entities

designated by the commission pursuant to a competitive selection process.

     (i) Effective January 1, 2007, the commission shall allocate from demand-side

management gas and electric funds authorized pursuant to this section, an amount not to exceed

two percent (2%) of such funds on an annual basis for the retention of expert consultants, and

reasonable administration costs of the energy efficiency and resources management council

associated with planning, management, and evaluation of energy-efficiency programs, renewable-

energy programs, system reliability least-cost procurement, and with regulatory proceedings,

contested cases, and other actions pertaining to the purposes, powers, and duties of the council,

which allocation may by mutual agreement, be used in coordination with the office of energy

resources to support such activities.

     (j) Effective January 1, 2016, the commission shall annually allocate from the

administrative funding amount allocated in (i) from the demand-side management program as

described in subsection (i) as follows: fifty percent (50%) for the purposes identified in

subsection (i) and fifty percent (50%) annually to the office of energy resources for activities

associated with planning, management, and evaluation of energy-efficiency programs, renewable-

energy programs, system reliability, least-cost procurement, and with regulatory proceedings,

contested cases, and other actions pertaining to the purposes, powers, and duties of the office of

energy resources.

     (k) On April 15, of each year, the office and the council shall submit to the governor, the

president of the senate, and the speaker of the house of representatives, separate financial and

performance reports regarding the demand-side management programs, including the specific

level of funds that were contributed by the residential, municipal, and commercial and industrial

sectors to the overall programs; the businesses, vendors, and institutions that received funding

from demand-side management gas and electric funds used for the purposes in this section; and

the businesses, vendors, and institutions that received the administrative funds for the purposes in

subsections (i) and (j). These reports shall be posted electronically on the websites of the office of

energy resources and the energy efficiency and resources management council.

     (l) On or after August 1, 2015, at the request of the Rhode Island infrastructure bank,

each electric-distribution company, except for the Pascoag Utility District and Block Island

Power Company, shall remit two percent (2%) of the amount of the 2014 electric demand-side

charge collections to the Rhode Island infrastructure bank.

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     (m) On or after August 1, 2015, at the request of the Rhode Island infrastructure bank,

each gas-distribution company shall remit two percent (2%) of the amount of the 2014 gas

demand-side charge collections to the Rhode Island infrastructure bank.

     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 -- DUTIES OF UTILITIES AND

CARRIERS

***

     This act would require the public utilities commission to periodically review the

advertising expense, passed through in utility rates, to determine the percentage of the expense

that should be deemed allowable and the percentage that should be excluded from the utility's

rates.

     This act would take effect upon passage.

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