Chapter 356
2008 -- H 7809
SUBSTITUTE A AS AMENDED
Enacted 07/05/08
A N A C T
RELATING
TO PUBLIC UTILITIES AND CARRIERS -- RENEWABLE ENERGY STANDARD
Introduced
By: Representatives Segal, Rice, Lewiss, Kennedy, and Gallison
Date
Introduced: February 26, 2008
It is enacted by the General Assembly as
follows:
SECTION 1.
Sections 39-26-2 and 39-26-6 of the General Laws in Chapter 39-26
entitled "Renewable Energy Standard"
are hereby amended to read as follows:
39-26-2.
Definitions. -- When used in this chapter:
(1)
"Alternative compliance payment" means a payment to the Renewable
Energy
Development Fund of fifty dollars ($50.00) per
megawatt-hour of renewable energy obligation, in
2003 dollars, adjusted annually up or down by
the consumer price index, which may be made in
lieu of standard means of compliance with this
statute;
(2)
"Commission" means the Rhode Island public utilities commission;
(3)
"Compliance year" means a calendar year beginning January 1 and ending
December
31, for which an obligated entity must
demonstrate that it has met the requirements of this statute;
(4)
"Customer-sited generation facility" means a generation unit that is
interconnected on
the end-use customer's side of the retail
electricity meter in such a manner that it displaces all or
part of the metered consumption of the end-use
customer;
(5)
"Educational institution" means any public school, approved private
non-profit
school, or institution of higher education as defined
in 20 USC Chapter 28, Subchapter 1, Part A
section 1001 (a).
(5) (6)
"Electrical energy product" means an electrical energy offering,
including, but not
limited to, last resort and standard offer
service, that can be distinguished by its generation
attributes or other characteristics, and that is
offered for sale by an obligated entity to end-use
customers;
(6) (7)
"Eligible biomass fuel" means fuel sources including brush, stumps,
lumber ends
and trimmings, wood pallets, bark, wood chips,
shavings, slash and other clean wood that is not
mixed with other solid wastes; agricultural
waste, food and vegetative material; energy crops;
landfill methane; biogas; or neat bio-diesel and
other neat liquid fuels that are derived from such
fuel sources;
(7) (8)
"Eligible renewable energy resource" means resources as defined in
section 39-
26-4 39-26-5;
(8) (9)
"End-use customer" means a person or entity in Rhode Island that
purchases
electrical energy at retail from an obligated
entity;
(9) (10)
"Existing renewable energy resources" means generation units using
eligible
renewable energy resources and first going into
commercial operation before December 31, 1997;
(11)
"Farm" shall be defined in accordance with section 44-27-2, except
that all buildings
associated with the farm shall be eligible for
net metering credits as long as: (i) the buildings are
owned by the same entity operating the farm or
persons associated with operating the farm; and
(ii) the buildings are on the same farmland as
the renewable generation on either a tract of land
contiguous with such farmland or across a public
way from such farmland.
(10) (12)
"Generation attributes" means the nonprice characteristics of the
electrical
energy output of a generation unit including,
but not limited to, the unit's fuel type, emissions,
vintage and policy eligibility;
(11) (13)
"Generation unit" means a facility that converts a fuel or an energy
resource
into electrical energy;
(12) (14)
"NE-GIS" means the generation information system operated by NEPOOL,
its
designee or successor entity, which includes a
generation information database and certificate
system, and that accounts for the generation
attributes of electrical energy consumed within
NEPOOL;
(13) (15)
"NE-GIS certificate" means an electronic record produced by the
NE-GIS that
identifies the relevant generation attributes of
each megawatt-hour accounted for in the NE-GIS;
(14) (16)
"NEPOOL" means the New England Power Pool or its successor;
(17) "Net
metering" means the process of measuring the difference between
electricity
delivered by an electrical distribution company
and electricity generated by a solar-net-metering
facility or wind-net-metering facility, and fed
back to the distribution company;
(15) (18)
"New renewable energy resources" means generation units using
eligible
renewable energy resources and first going into
commercial operation after December 31, 1997;
or the incremental output of generation units
using eligible renewable energy resources that have
demonstrably increased generation in excess of
ten percent (10%) using eligible renewable
energy resources through capital investments
made after December 31, 1997; but in no case
involve any new impoundment or diversion of
water with an average salinity of twenty (20) parts
per thousand or less;
(19)
"Non-profit affordable housing" shall mean a housing development or
housing
project as defined by section 42-55-3 undertaken
by a non-profit entity where the residential units
taking electric service are either in the same
building in close proximity to the renewable energy
source or, if not within the same building, are
within one-half (1/2) of a mile radius from the
renewable energy source; provided, however, that
the application has been filed with and
reviewed by the division of public utilities and
carriers and the division has certified the
development or project as eligible. The division
shall promulgate regulations setting forth an
application process and eligibility criteria to
assure that the net metering allowed will benefit low
income residential electric customers only.
(16) (20)
"Obligated entity" means a person or entity that sells electrical
energy to end-
use customers in Rhode Island, including, but
not limited to: nonregulated power producers and
electric utility distribution companies, as
defined in section 39-1-2, supplying standard offer
service, last resort service, or any successor service
to end-use customers; including Narragansett
Electric, but not to include Block Island Power
Company as described in section 39-26-7 or
Pascoag Utility District;
(17) (21)
"Off-grid generation facility" means a generation unit that is not connected
to a
utility transmission or distribution system;
(22)
"Renewable generation credit" means credit equal to the excess kWhs
by the time of
use billing period (if applicable) multiplied by
the sum of the distribution company's:
(i) standard
offer service kWh charge for the rate class applicable to the net metering
customer;
(ii)
distribution kWh charge;
(iii)
transmission kWh charge; and
(iv) transition
kWh charge. This does not include any charges relating to conservation
and load management, demand side management, and
renewable energy.
(18) (23)
"Reserved certificate" means a NE-GIS certificate sold independent of
a
transaction involving electrical energy,
pursuant to Rule 3.4 or a successor rule of the operating
rules of the NE-GIS;
(19) (24)
"Reserved certificate account" means a specially designated account
established by an obligated entity, pursuant to
Rule 3.4 or a successor rule of the operating rules
of the NE-GIS, for transfer and retirement of reserved
certificated from the NE-GIS;
(20) (25)
"Self-generator" means an end-use customer in Rhode Island that
displaces all
or part of its retail electricity consumption,
as metered by the distribution utility to which it
interconnects, through the use of a
customer-sited generation facility;
(21) (26)
"Small hydro facility" means a facility employing one or more
hydroelectric
turbine generators and with an aggregate
capacity not exceeding thirty (30) megawatts. For
purposes of this definition,
"facility" shall be defined in a manner consistent with Title 18 of
the
Code of Federal Regulations, section 92.201 et
seq.; provided, however, that the size of the
facility is limited to thirty (30) megawatts,
rather than eighty (80) megawatts.
39-26-6.
Duties of the commission. -- The commission shall:
(a) Develop and
adopt regulations on or before December 31, 2005, for implementing a
renewable energy standard, which regulations
shall include, but be limited to, provisions for:
(1) Verifying the
eligibility of renewable energy generators and the production of energy
from such generators, including requirements to
notify the commission in the event of a change in
a generator's eligibility status.
(2) Standards for
contracts and procurement plans for renewable energy resources, to
achieve the purposes of this chapter.
(3) Flexibility
mechanisms for the purposes of easing compliance burdens, facilitating
bringing new renewable resources on-line, and
avoiding and/or mitigating conflicts with state
level source disclosure requirements and green
marketing claims throughout the region; which
flexibility mechanisms shall allow obligated
entities to: (i) demonstrate compliance over a
compliance year; (ii) bank excess compliance for
two (2) subsequent compliance years, capped at
thirty percent (30%) of the current year's
obligation; and (iii) allow renewable energy generated
during 2006 to be banked by an obligated entity
as early compliance, usable towards meeting an
obligated entity's 2007 requirement. Generation
used for early compliance must result in the
retirement of NE-GIS certificate in a reserved
certificate account designated for such purposes.
(4) Annual
compliance filings to be made by all obligated entities within one month after
NE-GIS reports are available for the fourth
(4th) quarter of each calendar year. All electric utility
distribution companies shall cooperate with the
commission in providing data necessary to assess
the magnitude of obligation and verify the
compliance of all obligated entities.
(b) Authorize
rate recovery by electric utility distribution companies of all prudent
incremental costs arising from the
implementation of this chapter, including, without limitation,
the purchase of NE-GIS certificates, the payment
of alternative compliance payments, required
payments to support the NE-GIS, assessments made
pursuant to section 39-26-7(c) and the
incremental costs of complying with energy
source disclosure requirements.
(c) Certify
eligible renewable energy resources by issuing statements of qualification
within ninety (90) days of application. The
commission shall provide prospective reviews for
applicants seeking to determine whether a
facility would be eligible.
(d) Determine, on
or before January 1, 2010, the adequacy, or potential adequacy, of
renewable energy supplies to meet the increase
in the percentage requirement of energy from
renewable energy resources to go into effect in 2011
and determine on or before January 1, 2014,
the adequacy or potential adequacy, of renewable
energy supplies to meet the increase in the
percentage requirement of energy from renewable
energy resources to go into effect in 2015. In
making such determinations the commission shall
consider among other factors the historical use
of alternative compliance payments in Rhode
Island and other states in the NEPOOL region. In
the event that the commission determines an
inadequacy or potential inadequacy of supplies for
scheduled percentage increases, the commission
shall delay the implementation of the scheduled
percentage increase for a period of one year or
recommend to the general assembly a revised
schedule of percentage increases, if any, to
achieve the purposes of this chapter.
(e) Establish
sanctions for those obligated entities that after investigation have been
found to fail to reasonably comply with the
commission's regulations. No sanction or penalty
shall relieve or diminish an obligated entity
from liability for fulfilling any shortfall in its
compliance obligation; provided, however, that
no sanction shall be imposed if compliance is
achieved through alternative compliance
payments. The commission may suspend or revoke the
certification of generation units, certified in
accordance with subsection (c) above, that are found
to provide false information, or that fail to
notify the commission in the event of a change in
eligibility status or otherwise comply with its
rules. Financial penalties resulting from sanctions
from obligated entities shall not be recoverable
in rates.
(f) Report, by
February 15, 2006, and by February 15 each year thereafter, to the
governor, the speaker of the house and the
president of the senate on the status of the
implementation of the renewable energy standards
in Rhode Island and other states, and which
report shall include in 2009, and each year
thereafter, the level of use of renewable energy
certificates by eligible renewable energy
resources and the portion of renewable energy standards
met through alternative compliance payments, and
the amount of rate increases authorized
pursuant to subsection (b) above.
(g) Implement the
following changes regarding distributed generation from renewable
energy systems by January 1, 2008 and until
January 1, 2010 2009.
(1) Increase the
maximum allowable distributed generation capacity for eligible net-
metered energy systems to one 1.65
megawatts (MW); except that for eligible net-metered
renewable energy systems developed but not owned
by cities and towns, located on city or town
owned land, and providing power solely to the
city or town that the project is located in, increase
said maximum to 2.25 megawatts; and except that for
eligible net-metered renewable energy
systems owned by cities and towns of Rhode
Island and the Narragansett Bay Commission,
increase said maximum to 1.65 MW 3.5
megawatts (MW).
(2) Increase the
aggregate amount of net metering to a minimum maximum of five
(5)
megawatts two percent (2%) of peak load, provided
that at least one megawatt is reserved for
projects less than twenty-five (25) kW.
(3) If the
electricity generated by the renewable generation facility during a billing
period
exceeds the customer's kilowatt-hour usage
during the billing period, the customer shall be billed
for zero kilowatt-hour usage and the excess
renewable generation credits shall be credited to the
customer's account for the following billing
period. Any Rhode Island city or town, educational
institution, farm, or the Narragansett Bay
Commission may elect to apply any such credits earned
to another account owned by it. Non-profit
affordable housing may elect to apply any such credits
earned to other accounts within the eligible
affordable housing development.
(4) If the
customer's kilowatt-hour usage exceeds the electricity generated by the
renewable generation facility during the billing
period, the customer shall be billed for the net
kilowatt-hour usage at the applicable rate. Any
excess credits may be carried forward month to
month for twelve (12) month periods as
established by the commission. At the end of the
applicable twelve (12) month period, if there
are unused excess credits on the net metering
customer accounts, such credits shall be
transferred to the renewable energy low income fund set
forth in subsection 39-26-6(j).
(h) The
distribution portion of any small or large renewable credits and the
distribution
portion of any distribution company delivery
charges displaced by renewable energy systems
subject to subsection (g) above Any prudent and
reasonable costs incurred by the electric
distribution company pursuant to achieving
compliance with subsection (g) and the annual
amount of the distribution component of any
renewable generation credits provided to net
metering customers shall be aggregated by
the distribution company and billed to all customers
on an annual basis through either a
uniform per kilowatt-hour surcharge embedded in the
distribution component of the rates reflected on
customer bills
or surcharges .
(i) Report, by
July 1, 2010 to the governor, the speaker of the house and the president of
the senate on the status of the implementation
of subsection (g) above and (h), including if said
provisions are optimally cost-effective,
reliable, prudent and environmentally responsible.
(j) The
commission shall establish a renewable energy low income fund to which unused
excess renewable credits shall be transferred,
as provided in subdivision 39-26-6(g)(4). The
commission shall direct the electrical
distribution utility to apply the credits to reduce the electric
bills of customers in the low income rate class,
by such method as determined by the commission.
The electric distribution company shall file an
annual report disclosing the amount of unused
credits and propose a method of allocating the
credits to the low income rate class. The
commission shall, after conducting a public
hearing, retain discretion to accept the proposal,
modify it, or direct a different method of
allocating the credits to the low income rate class.
(k) Consistent
with the public policy objective of developing renewable generation as an
option in Rhode Island, the electric
distribution company is authorized to propose and implement
pilot programs to own and operate no more than
fifteen megawatts (15MW) of renewable
generation demonstration projects in Rhode
Island and include the costs and benefits in rates to
distribution customers. At least two (2)
demonstration projects shall include renewable generation
installed at or in the vicinity of nonprofit
affordable housing projects where energy savings
benefits are provided to reduce electric bills
of the customers at the nonprofit affordable housing
projects. Any renewable generation proposals
shall be subject to the review and approval of the
commission. The commission shall annually make
an adjustment to the minimum amounts
required under the renewable energy standard
under chapter 39-26 in an amount equal to the
kilowatt hours generated by such units owned by
the electric distribution company. The electric
and gas distribution company shall also be
authorized to propose and implement smart metering
and smart grid demonstration projects in Rhode
Island, subject to the review and approval of the
commission, in order to determine the
effectiveness of such new technologies for reducing and
managing energy consumption, and include the
costs of such demonstration projects in
distribution rates to electric customers to the
extent the project pertains to electricity usage and in
distribution rates to gas customers to the
extent the project pertains to gas usage.
SECTION 2. This
act shall take effect upon passage.
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