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 outlines definitions for key terms such as "clean heat credit," "clean heat measure," and "obligated party." It mandates the Rhode Island executive climate change coordinating council to promulgate and enforce rules for the clean heat credit system.

Obligated parties, which include natural gas utilities and entities making the first sale of heating fuel in the state, will be required to retire a specified number of clean heat credits annually. The council will establish the annual requirements based on the thermal sector's lifecycle carbon dioxide equivalent (CO2e) emissions and ensure that a substantial portion of clean heat credits retired by each obligated party is sourced from measures delivered to low-income and moderate-income customers.

The act emphasizes the importance of prioritizing energy efficiency and weatherization before implementing other clean heat measures. The council will designate a default delivery agent to provide clean heat measures and will adopt a cost per clean heat credit to be paid to this agent by obligated parties. Additionally, the council will create a registration system to facilitate the process for individuals and businesses seeking to earn clean heat credits.

The act is set to take effect upon passage.