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 defines "clean heat credits" as tradeable commodities representing the amount of greenhouse gas reduction achieved through clean heat measures. Obligated parties, including 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 each year to meet emissions reduction targets set for 2030, 2040, and 2050.

The Rhode Island executive climate change coordinating council will oversee the implementation of the clean heat standard, including the establishment of rules and regulations for credit generation and compliance. The council will prioritize energy efficiency and weatherization before implementing other clean heat measures. A substantial portion of clean heat credits retired by each obligated party must be sourced from measures delivered to low-income and moderate-income customers, with at least 20% of credits coming from each demographic.

The act also outlines the responsibilities of the council in designating a default delivery agent to provide clean heat measures, establishing a system for recognizing clean heat credits, and maintaining a registration system for entities seeking to earn credits. The council will have the authority to adjust annual requirements based on market conditions and to ensure compliance through noncompliance payments. The act is designed to enhance energy efficiency and promote the use of clean heat technologies while ensuring equitable access for all customers. The act will take effect upon passage.