Chapter 228

2008 -- H 7806 SUBSTITUTE A

Enacted 07/04/08

 

A N A C T

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

          

     Introduced By: Representatives Rice, Kennedy, Fox, Segal, and Ajello

     Date Introduced: February 26, 2008

 

It is enacted by the General Assembly as follows:

 

     SECTION 1. Section 42-64-13.2 of the General Laws in Chapter 42-64 entitled "Rhode

Island Economic Development Corporation" is hereby amended to read as follows:

 

     42-64-13.2. Renewable energy development fund. -- Renewable energy investment

coordination. -- The Rhode Island economic development corporation shall, in the furtherance of

its responsibilities to promote and encourage economic development, establish and administer a

renewable energy development fund as provided for in section 39-26-7, and may exercise the

powers set forth in this chapter, as necessary or convenient to accomplish this purpose, and shall

provide such administrative support as may be needed for the coordinated administration of the

renewable energy standard as provided for in chapter 26 of title 39 and the renewable energy

program established by section 39-2-1.2. The corporation, upon the request of any person

undertaking a renewable energy facility project, may grant project status to the project, and a

renewable energy facility project which is given project status by the corporation shall be deemed

an energy project of the corporation.

     (a) Intent. To develop an integrated organizational structure to secure for Rhode Island

and its people the full benefits of cost-effective renewable energy development from diverse

sources.

     (b) Definitions. For purposes of this section, the following words and terms shall have the

meanings set forth in RIGL 42-64-3 unless this section provides a different meaning. Within this

section, the following words and terms shall have the following meanings:

      (1) "Corporation" means the Rhode Island economic development corporation.

      (2) "Municipality" means any city or town, or other political subdivision of the state.

     (3) "Office" means the office of energy resources established by chapter 42-140.

     (c) Purpose. The corporation is authorized to integrate the management of public funds to

promote the expansion and sound development of renewable energy resources by providing

coordinated and cost-effective use of funds from:

     (1) The renewable energy program of the demand side management program as set forth

in section 39-2-1.2; and

     (2) The renewable energy development fund of the renewable energy standard, as set

forth in chapter 39-26.

     (3) The office of energy resources from the sale of allowances under the greenhouse gas

initiative act to the extent available for renewable energy, as set forth in chapter 23-82.

     (d) Renewable energy development fund. – The corporation shall, in the furtherance of its

responsibilities to promote and encourage economic development, establish and administer a

renewable energy development fund as provided for in section 39-26-7, may exercise the powers

set forth in this chapter, as necessary or convenient to accomplish this purpose, and shall provide

such administrative support as may be needed for the coordinated administration of the renewable

energy standard as provided for in chapter 39-26 and the renewable energy program established

by section 39-2-1.2. The corporation may upon the request of any person undertaking a renewable

energy facility project, grant project status to the project, and a renewable energy facility project,

which is given project status by the corporation, shall be deemed an energy project of the

corporation.

     (e) Duties. The corporation shall, with regards to renewable energy project investment:

     (1) Establish by rule, in consultation with the office, standards for financing renewable

energy projects from diverse sources.

     (2) Enter into agreements, consistent with this chapter and renewable energy investment

plans adopted by the office, to provide support to renewable energy projects that meet applicable

standards established by the corporation. Said agreements may include contracts with

municipalities and public corporations.

     (f) Conduct of activities. – (1) To the extent reasonable and practical, the conduct of

activities under the provisions of this chapter shall be open and inclusive; the director shall seek,

in addressing the purposes of this chapter, to involve the research and analytic capacities of

institutions of higher education within the state, industry, advocacy groups, and regional entities,

and shall seek input from stakeholders including, but not limited to, residential and commercial

energy users.

     (2) By January 1, 2009, the director shall adopt:

     (A) Goals for renewable energy facility investment which are beneficial, prudent, and from

diverse sources;

     (B) A plan for a period of five (5) years, annually upgraded as appropriate, to meet the

aforementioned goals; and

     (C) Standards and procedures for evaluating proposals for renewable energy projects in

order to determine the consistency of proposed projects with the plan.

     (g) Reporting. On March 1, of each year after the effective date of this chapter, the

corporation shall submit to the governor, the president of the senate, the speaker of the house of

representatives, and the secretary of state, a financial and performance report. These reports shall

be posted electronically on the general assembly and the secretary of state's websites as

prescribed in section 42-20-8.2. The reports shall set forth:

     (1) the corporation's receipts and expenditures in each of the renewable energy program

funds administered in accordance with this section.

     (2) a listing of all private consultants engaged by the corporation on a contract basis and a

statement of the total amount paid to each private consultant from the two (2) renewable energy

funds administered in accordance with this chapter; a listing of any staff supported by these

funds, and a summary of any clerical, administrative or technical support received; and

     (3) a summary of performance during the prior year including accomplishments and

shortcomings; project investments, the cost-effectiveness of renewable energy investments by the

corporation; and recommendations for improvement.

 

     SECTION 2. Sections 42-140-3 and 42-140-7 of the General Laws in Chapter 42-140

entitled "Rhode Island Energy Resources Act" are hereby amended to read as follows:

 

     42-140-3. Purposes. -- The purposes of the office shall be to:

      (1) Develop and put into effect plans and programs to promote, encourage, and assist the

provision of energy resources for Rhode Island in a manner that enhances economic well-being,

social equity, and environmental quality;

      (2) Monitor, forecast, and report on energy use, energy prices, and energy demand and

supply forecasts, and make findings and recommendations with regard to energy supply diversity,

reliability, and procurement, including least-cost procurement;

      (3) Develop and to put into effect plans and programs to promote, encourage and assist

the efficient and productive use of energy resources in Rhode Island, and to coordinate energy

programs for natural gas, electricity, and heating oil to maximize the aggregate benefits of

conservation and efficiency of investments;

      (4) Monitor and report technological developments that may result in new and/or

improved sources of energy supply, increased energy efficiency, and reduced environmental

impacts from energy supply, transmission and distribution;

      (5) Administer the programs, duties, and responsibilities heretofore exercised by the state

energy office, except as these may be assigned by executive order to other departments and

agencies of state government;

      (6) Develop, recommend and, as appropriate, implement integrated and/or

comprehensive strategies, including at regional and federal levels, to secure Rhode Island's

interest in energy resources, their supply and efficient use, and as necessary to interact with

persons, private sector, non-profit, regional, federal entities and departments and agencies of

other states to effectuate this purpose;

      (7) Cooperate with agencies, departments, corporations, and entities of the state and of

political subdivisions of the state in achieving its purposes;

      (8) Cooperate with and assist the state planning council and the division of state planning

in developing, maintaining, and implementing state guide plan elements pertaining to energy and

renewable energy;

      (9) Administer, as appropriate assigned by law or executive order, state and federally

funded or authorized energy programs, which may include, but not be limited to:

      (i) The federal low-income home energy assistance program which provides heating

assistance to eligible low-income persons and any state funded or privately funded heating

assistance program of a similar nature assigned to it for administration;

      (ii) The weatherization assistance program which offers home weatherization grants and

heating system upgrades to eligible persons of low-income;

      (iii) The emergency fuel program which provides oil deliveries to families experiencing

a heating emergency;

      (iv) The energy conservation program, which offers service and programs to all sectors;

and

      (v) The renewable energy program established under Rhode Island general laws chapter

39-2;

      (10) Advise the economic development corporation in the development of standards and

rules for the solicitation and award of renewable energy program investment funds in accordance

with section 42-64-13.2;

      (11)(10) Develop, recommend, and evaluate energy programs for state facilities and

operations in order to achieve and demonstrate the benefits of energy-efficiency, diversification

of energy supplies, energy conservation, and demand management; and

      (12)(11) Advise the governor and the general assembly with regard to energy resources

and all matters relevant to achieving the purposes of the office.

 

     42-140-7. Conduct of activities. -- (a) To the extent reasonable and practical, the

conduct of activities under the provisions of this chapter shall be open and inclusive; the

commissioner and the council shall seek in addressing the purposes of the office to involve the

research and analytic capacities of institutions of higher education within the state, industry,

advocacy groups, and regional entities, and shall seek input from stakeholders including, but not

limited to, residential and commercial energy users.

      (b) The commissioner shall, not later than February 1, 2008, adopt, in the manner as set

forth in section 42-140-9:

      (1) Goals for renewable energy facility investment and/or procurement, which is

beneficial and prudent, from diverse sources;

      (2) A plan for a period of five (5) years, annually upgraded as appropriate, to meet the

aforementioned goals; and

      (3) Investment and/or procurement standards and procedures for evaluating proposals for

renewable energy projects in order to determine the consistency of proposed projects with the

plan.

     The commissioner shall transmit any unencumbered funds from the renewable energy

program under chapter 39-2 to the economic development corporation to be administered in

accordance with a the provisions of section 39-2-1.2.

 

     SECTION 3. 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 section 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, which promotes the use of its product or

service, or is designed to promote the public image of the industry. 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, which 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.

      (b) Effective as of January 1, 2003, and for a period of ten (10) years thereafter, each

electric distribution company shall include charges of 2.0 mills per kilowatt-hour delivered to

fund demand side management programs and 0.3 mills per kilowatt-hour delivered to fund

renewable energy programs. Existing charges for these purposes and their method of

administration shall continue through December 31, 2002. Thereafter, the electric distribution

company shall establish and after July 1, 2007, maintain two (2) separate accounts, one for

demand side management programs, which shall be 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 office of energy resources

through June 30, 2007 and effective July 1, 2007, economic development corporation pursuant to

section 42-64-13.2 and, shall be held and disbursed by the distribution company as directed by

the economic development corporation commissioner of the office of energy resources, with the

approval, if appropriate, of the trustees of the renewable energy development fund, for the

purposes of developing, promoting and supporting renewable energy programs.

      During the ten (10) year period the commission may, in its discretion, after notice and

public hearing, increase the sums for demand side management and renewable resources;

thereafter, 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 shall 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, and shall develop and execute by July 1, 2007, a plan to make the program self-

sustaining as of January 1, 2013. As used in this section, "renewable energy resources" shall

mean: (1) power generation technologies as defined in section 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, so

long as these technologies are installed on housing projects that have been certified by the

executive director of the Rhode Island housing and mortgage finance corporation as serving low-

income Rhode Island residents. 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.

     (c) On or before November 15, 2008, the economic development corporation shall create

the municipal renewable energy investment program utilizing the lesser of fifty percent (50%) or

one million dollars ($1,000,000) collected annually from the .3 mils per kilo-watt hour charge for

renewable energy programs, to fund qualified municipal renewable energy projects in accordance

with this chapter and the following provisions:

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

to rules established by the economic development corporation. Said rules shall provide

transparent criteria to rank qualified municipal 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 kilo-watt hour (kwh) of the energy produced from the project.

Municipalities that have not previously received financing from this program shall be given

priority over those municipalities that have received funding under this program.

     (2) Beginning on January 1, 2009, the economic development corporation shall solicit

proposals from municipalities for eligible projects and shall award grants, in accordance with the

rules and ranking criteria, of no more than five hundred thousand dollars ($500,000) to each

eligible project.

     (3) Any funds not expended from the municipal renewable energy investment programs

in a given year shall remain in the fund and be added to the balance to be distributed in the next

award cycle. For the purposes of this section, qualified municipal renewable energy projects

means any project that produces renewable energy resources and whose output of power and

other attributes is controlled in its entirety by at least one Rhode Island city or town.

     (d) On or before November 15, 2008, the economic development corporation shall create

the nonprofit affordable housing renewable energy investment program utilizing the lesser of ten

percent (10%) or two hundred thousand dollars ($200,000) collected annually from the .3 mils per

kilo-watt hour charge for renewable energy programs to fund qualified nonprofit affordable

housing renewable energy projects in accordance with this chapter and the following provisions:

     (1) The nonprofit affordable housing renewable energy investment programs shall be

administered pursuant to rules established by the economic development corporation in

consultation with the Rhode Island housing mortgage finance corporation. Said rules shall

provide transparent criteria to rank qualified nonprofit affordable housing 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 kilo-watt hour (kwh) of the energy produced from the project.

Nonprofit affordable housing agencies that have not previously received financing from this

program shall be given priority over those agencies that have received funding under this

program.

     (2) Beginning on January 1, 2009, the economic development corporation, in consultation

with the Rhode Island housing and mortgage finance corporation, shall solicit proposals from

eligible nonprofit housing agencies for renewable energy projects and shall award grants, in

accordance with the rules and ranking criteria. The economic development corporation shall

consult with the Rhode Island housing and mortgage finance corporation in the grant-making

process and shall notify the corporation of the awardees.

     (3) Any funds not expended from the affordable housing renewable energy investment

program in a given year shall remain in the fund and be added to the balance to be distributed in

the next award cycle. For the purposes of this section, “qualified nonprofit affordable housing

renewable energy projects” means any project that produces renewable energy resources and

whose output of power and other attributes is controlled in its entirety by at least one nonprofit

affordable housing development as defined in section 42-55-3 and is restricted to producing

energy for the nonprofit affordable housing development.

      (c) (e) The commissioner of the office of energy resources executive director of the

economic development 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.

The director shall initiate the competitive bid process by the issuance and advertisement of

specifications and request for proposals, on or before September 1, 2002. The contract resulting

from the competitive bid process shall be awarded to become effective for a three (3) year period

commencing no later than January 1, 2003. A competitive bid and contract award for

administration of the renewable energy programs may occur every three (3) years thereafter, and

shall include as a condition that after July 1, 2007 2008 the account for the renewable energy

programs shall be maintained and administered by the distribution company economic

development corporation as provided for in subdivision (b) above. and, with the approval of the

commissioner of the office of energy resources and the trustees of the renewable energy fund,

may be administered by the economic development corporation.

      (d) (f) Effective January 1, 2007, and for a period of seven (7) years thereafter, each gas

distribution company shall include, with the approval of the commission, a charge of up to fifteen

cents ($0.15) per deca therm delivered to demand side management programs, 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.

      (e) (g) The gas company shall establish a separate account for demand side management

programs, which shall be 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 commissions and that are

designed to achieve cost-effectiveness and high life-time savings of efficiency measures

supported by the program.

      (f) (h) The commission may, if reasonable and feasible, except from this demand side

management change:

      (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.

      (g) (i) The commission may provide for the coordinated and/or integrated administration

of 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.

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

management gas and electric funds authorized pursuant to this section 39-2-1.2, an amount not to

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

and reasonable administrations costs of the energy efficiency and resources management council

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

energy programs and 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.

 

     SECTION 4. Section 39-26-7 of the General Laws in Chapter 39-26 entitled "Renewable

Energy Standard" is hereby amended to read as follows:

 

     39-26-7. Renewable energy development fund. -- (a) There is hereby authorized and

created within the economic development corporation a renewable energy development fund for

the purpose of increasing the supply of NE-GIS certificates available for compliance in future

years by obligated entities with renewable energy standard requirements, as established in this

chapter. The fund shall be located at and administered by the Rhode Island economic

development corporation in accordance with section 42-64-13.2. and shall have a board of

trustees of five (5) members as follows: the executive director of the economic development

corporation, who shall be chairperson; the director of the department of administration or a

designee of the director; the administrator of the division of public utilities; and two (2) public

members appointed by the governor with advice and consent of the senate, who shall serve terms

of three (3) years; provided, however, that no public members may serve more than two (2)

consecutive (3) three year terms. One of the public members shall be a representative of an

organization that advocates for renewable energy development. Each member shall hold office

for the term appointed and until the member's successor shall have been duly appointed and

qualified, or until the member's earlier death, resignation or removal. Members of the board of

trustees of the fund shall receive no compensation for the performance of their duties, but may be

reimbursed for reasonable expenses incurred in carrying out those duties. The board of trustees

shall recommend to the economic development corporation: shall:

      (1) Plans Adopt plans and guidelines for the management and use of the fund in

accordance with section 42-64-13.2, and

      (2) Its evaluation of proposals and/or actions to obligate, use and/or sell, dispose, trade or

exchange assets held by the fund. The board of trustees shall have the power to adopt, with the

approval of the economic development corporation, such by-laws as may be necessary or

convenient for the conduct of its affairs.

      (b) The economic development corporation shall enter into agreements with obligated

entities to accept alternative compliance payments, consistent with rules of the commission and

the purposes set forth in this section; and alternative compliance payments received pursuant to

this section shall be trust funds to be held and applied solely for the purposes set forth in this

section.

      (c) The uses of the fund shall include but not be limited to:

      (1) Stimulating investment in renewable energy development by entering into

agreements, including multi-year agreements, for renewable energy certificates;

      (2) Issuing assurances and/or guarantees to support the acquisition of renewable energy

certificates and/or the development of new renewable energy sources for Rhode Island;

      (3) Establishing escrows, reserves, and/or acquiring insurance for the obligations of the

fund;

      (4) Paying administrative costs of the fund incurred by the economic development

corporation or the board of trustees, not to exceed ten percent (10%) of the income of the fund,

including, but not limited to, alternative compliance payments.

      (d) NE-GIS certificates acquired through the fund may be conveyed to obligated entities

or may be credited against the renewable energy standard for the year of the certificate provided

that the commission assesses the cost of the certificates to the obligated entity, or entities,

benefiting from the credit against the renewable energy standard, which assessment shall be

reduced by previously made alternative compliance payments and shall be paid to the fund.

      (e) The trustees, in cooperation and concurrence with the commissioner of the office of

energy resources, consistent with rules as may be adopted by the commission, develop an

integrated plan and strategy, by July 1, 2007, for stimulating the development of and financing

eligible renewable energy resources.

 

     SECTION 5. Chapter 42-55 of the General Laws entitled "Rhode Island Housing and

Mortgage Finance Corporation" is hereby amended by adding thereto the following section:

 

     42-55-5.4. Renewable energy in housing developments. -- On or before July 1, 2009,

the corporation shall establish, in appropriate housing development programs it administers,

criteria for priority consideration of housing development proposals which include renewable

energy features which are demonstrated to be cost-effective and can be implemented in a

reasonable period of time.

 

     SECTION 6. This act shall take effect upon passage.

     

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LC01582/SUB A

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