The proposed bill establishes the "Rhode Island Clean Heat Standard Act," which aims to reduce greenhouse gas emissions in the thermal sector by implementing a system of tradeable clean heat credits. The act includes legislative findings and defines key terms such as "clean heat credit," "clean heat measure," and "obligated party." It emphasizes the need for obligated parties to retire clean heat credits to meet emissions reduction targets consistent with existing climate legislation.

The Rhode Island Executive Climate Change Coordinating Council is tasked with overseeing the implementation of the clean heat standard, including the establishment of rules for tradeable clean heat credits and compliance requirements for obligated parties. The council will set the number of clean heat credits each obligated party must retire annually, with a focus on achieving lifecycle carbon dioxide equivalent (CO2e) emission reductions for 2030, 2040, and 2050.

The act mandates that a substantial portion of clean heat credits be sourced from measures delivered to low-income and moderate-income customers, requiring at least twenty percent (20%) from each group. The council will designate a default delivery agent to facilitate the provision of clean heat measures and will maintain a registration system to streamline the process for individuals and businesses seeking to earn clean heat credits.

The council is also granted authority to implement the provisions of the act, including the establishment of a system for recognizing and monitoring clean heat credits, and to ensure compliance through potential noncompliance payments. The act is set to take effect upon passage.