2022 -- H 7496
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LC003279
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2022
____________
AN ACT
RELATING TO HEALTH AND SAFETY -- ECONOMIC AND CLIMATE RESILIENCE ACT
OF 2022
Introduced By: Representatives Bennett, Cortvriend, Speakman, Carson, Ajello, Kislak,
Donovan, Henries, Hull, and Williams
Date Introduced: February 16, 2022
Referred To: House Finance
It is enacted by the General Assembly as follows:
1 SECTION 1. Legislative Findings. The General Assembly finds and declares that:
2 (1) In order to promote the general welfare of the people of the state, Rhode Island must
3 strengthen its economy and make it more resilient over the long term in order to avoid the economic
4 consequences of climate change, which will require initiatives that encourage the development and
5 use of innovative policies, technologies and practices;
6 (2) Rhode Island is committed to the principles of the Paris Climate Agreement and to the
7 findings of the latest climate science and acknowledges that immediate actions to reduce
8 greenhouse gas emissions, such as those set forth in this legislation, are essential to protect our
9 community, our environment, and our economy;
10 (3) The General Assembly in 2014 enacted the Resilient Rhode Island Act, which set goals
11 for reducing "greenhouse gas emissions" in Rhode Island, and established affirmative obligations
12 to meet these statutory goals;
13 (4) Low-income, people of color, handicapped and elderly residents of Rhode Island suffer
14 most from climate-related disasters;
15 (5) Climate change increases risks to public health, including from health impacts from
16 extreme heat events, storms and floods, decreased air quality, and illnesses transmitted from food,
17 water, and disease carriers, as reported by the Rhode Island department of health;
18 (6) Climate change increases public safety risks and threats to our private property and
 1 public infrastructure, including risks associated with storms, floods, and sea level rise, and these
2 risks have been recognized by several branches of the Rhode Island government as warranting
3 specific attention;
4 (7) Climate change has severe economic consequences, including catastrophic weather
5 events such as Hurricane Sandy or coastal and river flooding that cause widespread damage to
6 communities and businesses and changes to marine ecosystems that cause severe reductions in
7 winter flounder, lobster, and other marine populations, and failing to address these risks will only
8 lead to more severe and persistent impacts upon our local economy;
9 (8) Rhode Island spends over three billion dollars ($3,000,000,000) annually on fossil fuels
10 whereas carbon pricing mechanisms have been shown to be effective in creating jobs and
11 stimulating the local economy;
12 (9) Natural gas, gasoline, diesel and heating oil prices can be highly volatile and create
13 uncertainty and risk for Rhode Island's economy. Reducing energy waste and demand for fossil
14 fuels produced out-of-state can stabilize Rhode Island's economy;
15 (10) Carbon pricing is a cost-effective and efficient market-based means to achieve
16 significant carbon emissions reductions;
17 (11) The clean energy sector has proven to be one of the fastest growing segments of Rhode
18 Island's economy, currently providing over fifteen thousand (15,000) jobs and growing at a rate
19 much higher than the overall state economy; increased investment will provide even more jobs in
20 addition to a higher quality of life;
21 (12) Climate change poses substantial risks to Rhode Island's ecology and natural
22 resources, and pursuant to Article 1, § 17 of the Rhode Island Constitution, it is the responsibility
23 of the state to secure the right of the people "to the use and enjoyment of the natural resources of
24 the state with due regard for the preservation of their values;" and
25 (13) In the absence of international or federal action, states cooperating regionally are
26 effective at reducing emissions and spurring renewable energy initiatives, as demonstrated by the
27 success of the Regional Greenhouse Gas Initiative (RGGI), which has reduced overall emissions
28 and strengthened the economies of participating states.
29 SECTION 2. Legislative intent. It is the intent of the general assembly to:
30 (1) Establish a separate and restricted receipt Rhode Island Economic and Climate
31 Resilience Climate Fund for creating employment and helping workers transition to low carbon
32 industries, improving energy efficiency, advancing adoption of clean energy technology,
33 establishing programs to safeguard low-income residents, and protecting businesses that are high
34 energy users;
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 1 (2) Price carbon as an incentive to reduce carbon (greenhouse gas) emissions from use of
2 carbon based fuels by residents and businesses in Rhode Island;
3 (3) Provide access to energy efficiency, energy conservation, and renewable energy
4 programs for low-income families and small businesses;
5 (4) Reduce public health, public safety, economic, and natural resource impairment risks
6 associated with climate change;
7 (5) Meet or exceed the state emissions goals for 2035 as set by the Resilient Rhode Island
8 Act of 2014; and
9 (6) Promote regional cooperation to reduce emissions, build renewable energy and energy
10 efficiency programs, and strengthen the economy.
11 SECTION 3. Title 23 of the General Laws entitled "HEALTH AND SAFETY" is hereby
12 amended by adding thereto the following chapter:
13 CHAPTER 82.1
14 ECONOMIC AND CLIMATE RESILIENCE ACT OF 2022
15 23-82.1-1. Short title.
16 This chapter shall be known and may be cited as the "Economic and Climate Resilience
17 Act of 2022".
18 23-82.1-2. Definitions.
19 As used in this chapter, the following words and terms shall have the following meanings
20 unless the context shall clearly indicate another or different meaning or intent:
21 (1) "Carbon dioxide equivalent" ("CO2e") means a unit of measure used to compare the
22 emissions from various greenhouse gases based upon their global warming potential.
23 (2) "Carbon price" means the fee imposed by this chapter.
24 (3) "Climate resilience" means the ability of a social, ecological, or socio-ecological system
25 and its components to anticipate, reduce, accommodate, or recover from the effects of a hazardous
26 event or trend in a timely and efficient manner. Such economic and social stability in the face of
27 climate-related disasters can be achieved through preparation, soft and hard infrastructure
28 improvements, emergency warning systems, and recovery resources, as well as through quickly
29 decarbonizing the economy to help lead other jurisdictions to do so, to avoid the worst impacts
30 which come with the accumulation of greenhouse gases in the atmosphere and oceans.
31 (4) "Commission" means the public utilities commission, set forth in § 39-1-3(a).
32 (5) "Electricity fuel mix" means the mix of fuels for any one-year period used to create
33 electricity by generators within the control area of ISO-NE.
34 (6) "Employer" means a person, firm, corporation, partnership, association or public body,
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 1 whether for-profit or not-for-profit, that is located in Rhode Island and employs Rhode Island
2 residents.
3 (7) "Economic and climate resilience fund" means the fund established under this chapter.
4 (8) "Fossil fuel" means coal, oil, natural gas, propane, petroleum product, and biomass that
5 is not carbon neutral over its life cycle. Fossil fuels do not include renewable, carbon neutral
6 biomass or waste vegetable oil biodiesel.
7 (9) "Implementation date" means January 1 of the year following initial regional carbon
8 fee enactment.
9 (10) "Independent System Operator-New England" or "ISO-NE" means the regional
10 transmission organization for New England licensed by the federal energy regulatory commission
11 pursuant to the Federal Power Act (16 U.S.C.12).
12 (11) "Initial regional carbon fee enactment" means the enactment of a fee of at least five
13 dollars ($5.00) per metric ton of carbon by the legislatures of at least three (3) states: Rhode Island,
14 Massachusetts, and one or more additional states in the Regional Greenhouse Gas Initiative
15 (RGGI).
16 (12) "Low-income residential property" means a dwelling unit owned or occupied by a
17 household eligible to receive benefits under the low-income energy assistance program (LIHEAP)
18 as set forth in § 39-1-27.12; in instances where a premises contains multiple dwelling units, the
19 entire premises shall be considered a low-income residential property if fifty percent (50%) or more
20 of the dwelling units are occupied by LIHEAP-eligible households.
21 (13) "Person" means any individual, partnership, corporation, company, society, or
22 association, whether created for-profit or nonprofit purposes.
23 (14) "Petroleum product" means all petroleum derivatives, whether in bond or not, which
24 are commonly burned to produce heat, electricity, or motion or which are commonly processed to
25 produce synthetic gas for burning, including propane, gasoline, unleaded gasoline, kerosene,
26 heating oil, diesel fuel, and number 4, number 5 and residual oil for utility and non-utility uses. All
27 aircraft fuels (including kerosene based jet fuel) used by commercial airplanes in Rhode Island and
28 all aircraft fuels brought into Quonset and Rhode Island T.F. Green International airports are
29 exempt from the fee. Fuels brought into Rhode Island in airplane fuel tanks are exempt.
30 (15) "Resident" means a person eighteen (18) years of age or older who is a resident of
31 Rhode Island. All persons registered to vote in Rhode Island or all persons eighteen (18) years of
32 age or older who hold a valid Rhode Island driver's license or photo ID shall be presumptively
33 considered residents for the purposes of this chapter. Persons who do not meet the requirements for
34 presumptive eligibility may establish eligibility by presenting other acceptable documentation.
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 1 (16) "Small business property" means the premises, whether owned or leased, of any
2 employer, other than a public body, that is a small business as defined by the United States Small
3 Business Administration (SBA).
4 23-82.1-3. Carbon pricing.
5 (a) A fee shall be collected on all non-exempt fossil fuels within the state for purposes of
6 distribution or use within the state, at the rate specified in subsection (b) of this section, in the
7 manner specified in subsections (e) through (l) of this section.
8 (b) Commencing on the implementation date, a fee shall be charged at a rate of fifteen
9 dollars ($15.00) per metric ton of CO2e that would be released by burning the fuel sold. In each
10 subsequent fiscal year, the rate shall be the rate of the previous fiscal year plus five (5) dollars
11 ($5.00), until it reaches a rate of fifty dollars ($50.00) per ton. After the rate reaches fifty dollars
12 ($50.00) per ton, in each subsequent fiscal year the rate will increase in accordance with inflation,
13 as measured by Rhode Island's cost-of-living-adjustments calculated using the United States
14 Bureau of Labor Statistics Consumer Price Index or, if that index is not available, another index
15 adopted by the director of revenue.
16 (c) The director of revenue shall calculate and publish the rate in current dollars for each
17 year, by December 1.
18 (d) In sales where greenhouse gas emissions from the fossil fuels are to be permanently
19 sequestered and not released into the atmosphere, charges on the fossil fuels shall be reduced by
20 the director of revenue in proportion to the amount of CO2e that is to be sequestered. The office of
21 energy resources shall ensure that in such cases, the emissions are actually sequestered and not
22 released into the atmosphere.
23 (e) The fee shall be collected on all petroleum products at their first point of sale within the
24 state for consumption or distribution within the state.
25 (f) All suppliers of electricity, including all electric distribution companies operating in the
26 state and all competitive suppliers of electricity to end users, shall pay the fee on behalf of all of
27 their electricity customers on the basis of each kilowatt hour of electricity used by each distribution
28 customer. The per kilowatt hour fee to be paid by the supplier of electricity will be calculated in
29 the following manner:
30 (1) The fee shall be calculated on an annual basis, based on the electricity fuel mix as
31 defined in § 23-82.1-2.
32 (2) The CO2e of every kilowatt hour of electricity shall be determined by taking the
33 weighted average of the natural gas, coal, and oil portions of the fuel mix and multiplying each of
34 those portions separately by the amount of CO2e emissions created per kilowatt hour of electricity
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 1 produced by each such fuel, as those carbon intensity levels are from time to time determined by
2 the United States Energy Information Administration (EIA).
3 (3) The supplier of electricity shall deduct from the fee calculated by subsection (f)(1) and
4 (f)(2) of this section an amount equal to the amount it paid for the same year on account of regional
5 greenhouse gas initiative (RGGI) clearing auctions; provided, however, that the amount so
6 deducted may be no greater than the total amount of the fee as calculated in subsections (f)(1) and
7 (f)(2) of this section. The electricity supplier shall also deduct from the fee calculated an amount
8 equal to the amount it may have paid for GIS certificates as defined in § 39-26-2.
9 (g) On April 1 of each year, each supplier of electricity shall file with the commission the
10 result of its proposed calculation for the year beginning the following July 1. The filing will include
11 sufficient supporting data to enable the commission to determine whether the calculation by the
12 supplier of electricity was made fully in accordance with subsection (f) of this section. Upon receipt
13 of the calculation by the supplier of electricity, the commission shall open a docket. The sole
14 purpose of the docket shall be for the commission to determine whether the calculation by the
15 supplier of electricity was made fully in accordance with subsection (f) of this section. If the
16 commission determines that the calculation by the supplier of electricity was made fully in
17 accordance with subsection (f) of this section, the commission shall, no later than May 15 of the
18 same year, issue its order approving the calculation. If the commission determines that the
19 calculation by the supplier of electricity did not fully comply with subsection (f) of this section, the
20 commission shall issue an order stating clearly the errors that were made by the supplier of
21 electricity. In that event, the supplier of electricity shall have twenty-one (21) days to make a
22 compliance filing with the commission, correcting the errors identified in the commission's order.
23 (h) Any entity which generates more than twenty-five thousand kilowatt hours (25,000
24 kwh) of electricity for on-site use using any combination of one or more fossil fuels shall be
25 obligated to pay the carbon price, which shall be calculated by multiplying the quantity of each
26 separate fossil fuel combusted to produce electricity by the CO2e emissions of each separate fuel
27 so combusted. Within one year following the date of enactment of this chapter, the director of
28 revenue shall issue rules, pursuant to chapter 35 of title 42, for the regular and efficient calculation,
29 assessment, and collection of these carbon price amounts. Any fee already paid on said fuel
30 pursuant to § 23-82.1-3 shall be deducted from the fee that would otherwise be due under this
31 subsection.
32 (i) The local distribution company for natural gas shall pay the fee on behalf of all of its
33 distribution customers. The fee shall be calculated by multiplying the number of cubic feet of
34 natural gas used by each customer by the amount of CO2e released by burning one cubic foot of
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 1 natural gas, as that value is from time to time determined by the United States Energy Information
2 Administration (EIA).
3 (j) The office of energy resources shall determine the amount of CO2e released in the form
4 of escaped methane due to the extraction, transport, or distribution of natural gas before the point
5 of consumption in Rhode Island, and shall add an additional charge to the carbon price for all
6 natural gas or natural-gas-based electricity, based on the rate specified in subsection (b) of this
7 section. This fee shall be published no later than December 10 of each year.
8 (k) In the event that a separate fee on the greenhouse gas content of transportation fuels is
9 established, this fee shall be deducted from the fee imposed by this chapter; provided, however,
10 that the amount so deducted may be no gre