2021 -- S 0154
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LC000432
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STATE OF RHODE ISLAND
IN GENERAL ASSEMBLY
JANUARY SESSION, A.D. 2021
____________
AN ACT
RELATING TO HEALTH AND SAFETY -- ECONOMIC AND CLIMATE RESILIENCE ACT
OF 2021
Introduced By: Senators Sosnowski, Coyne, Miller, McCaffrey, Gallo, Valverde, Euer,
DiPalma, and Kallman
Date Introduced: February 05, 2021
Referred To: Senate Environment & Agriculture
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) Climate change has a disproportionate impact on low income communities,
14 communities of color and other vulnerable residents of Rhode Island;
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) In the absence of international or federal action, states cooperating regionally are
16 effective at reducing emissions and spurring renewable energy initiatives, as demonstrated by the
17 success of the Regional Greenhouse Gas Initiative (RGGI), which places a cap on emissions and
18 which has reduced overall emissions and strengthened the economies of participating states.
19 (11) Carbon pricing is a cost-effective and when used in conjunction with the emissions
20 cap set forth in RGGI, is an efficient market-based means to achieve significant carbon emissions
21 reductions;
22 (12) The clean energy sector has proven to be one of the fastest growing segments of Rhode
23 Island's economy, currently providing over fifteen thousand (15,000) jobs and growing at a rate
24 much higher than the overall state economy; increased investment will provide even more jobs in
25 addition to a higher quality of life;
26 (13) Climate change poses substantial risks to Rhode Island's ecology and natural
27 resources, and pursuant to Article 1, § 17 of the Rhode Island Constitution, it is the responsibility
28 of the state to secure the right of the people "to the use and enjoyment of the natural resources of
29 the state with due regard for the preservation of their values;" and
30 SECTION 2. Legislative intent. It is the intent of the general assembly to:
31 (1) Establish a separate restricted receipt account called the Rhode Island Economic and
32 Climate Resilience Climate Fund for creating employment and helping workers transition to low
33 carbon industries, improving energy efficiency, advancing adoption of clean energy technology,
34 establishing programs to safeguard low-income residents, and protecting businesses that are high
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 1 energy users;
2 (2) Price carbon as an incentive to reduce carbon (greenhouse gas) emissions from use of
3 carbon based fuels by residents and businesses in Rhode Island;
4 (3) Provide access to energy efficiency, energy conservation, and renewable energy
5 programs for low-income families and small businesses;
6 (4) Reduce public health, public safety, economic, and natural resource impairment risks
7 associated with climate change;
8 (5) Meet or exceed the state emissions goals for 2035 as set by the Resilient Rhode Island
9 Act of 2014; and
10 (6) Promote regional cooperation to reduce emissions, build renewable energy and energy
11 efficiency programs, and strengthen the economy.
12 SECTION 3. Title 23 of the General Laws entitled "HEALTH AND SAFETY" is hereby
13 amended by adding thereto the following chapter:
14 CHAPTER 82.1
15 ECONOMIC AND CLIMATE RESILIENCE ACT OF 2021
16 23-82.1-1. Short title.
17 This chapter shall be known and may be cited as the "Economic and Climate Resilience
18 Act of 2021".
19 23-82.1-2. Definitions.
20 As used in this chapter, the following words and terms shall have the following meanings
21 unless the context shall clearly indicate another or different meaning or intent:
22 (1) "Carbon dioxide equivalent" ("CO2e") means a unit of measure used to compare the
23 emissions from various greenhouse gases based upon their global warming potential.
24 (2) "Carbon price" means the fee imposed by this chapter.
25 (3) "Climate resilience" means the ability of a social, ecological, or socio-ecological system
26 and its components to anticipate, reduce, accommodate, or recover from the effects of a hazardous
27 event or trend in a timely and efficient manner. Such economic and social stability in the face of
28 climate-related disasters can be achieved through preparation, soft and hard infrastructure
29 improvements, emergency warning systems, and recovery resources, as well as through quickly
30 decarbonizing the economy to help lead other jurisdictions to do so, to avoid the worst impacts
31 which come with the accumulation of greenhouse gases in the atmosphere and oceans.
32 (4) "Commission" means the public utilities commission, set forth in § 39-1-3(a).
33 (5) "Electricity fuel mix" means the mix of fuels for any one-year period used to create
34 electricity by generators within the control area of ISO-NE.
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 1 (6) "Employer" means a person, firm, corporation, partnership, association or public body,
2 whether for-profit or not-for-profit, that is located in Rhode Island and employs Rhode Island
3 residents.
4 (7) "Economic and climate resilience fund" means the fund established under this chapter.
5 (8) "Fossil fuel" means coal, oil, natural gas, propane, petroleum product, and biomass that
6 is not carbon neutral over its life cycle. Fossil fuels do not include renewable, carbon neutral
7 biomass or waste vegetable oil biodiesel.
8 (9) "Implementation date" means January 1 of the year following initial regional carbon
9 fee enactment.
10 (10) "Independent System Operator-New England" or "ISO-NE" means the regional
11 transmission organization for New England licensed by the federal energy regulatory commission
12 pursuant to the Federal Power Act (16 U.S.C.12).
13 (11) "Initial regional carbon fee enactment" means the enactment of a fee of at least five
14 dollars ($5.00) per metric ton of carbon by the legislatures of at least three (3) states: Rhode Island,
15 Massachusetts, and one or more additional states in the Regional Greenhouse Gas Initiative
16 (RGGI).
17 (12) "Low-income residential property" means a dwelling unit owned or occupied by a
18 household eligible to receive benefits under the low-income energy assistance program (LIHEAP)
19 as set forth in § 39-1-27.12; in instances where a premises contains multiple dwelling units, the
20 entire premises shall be considered a low-income residential property if fifty percent (50%) or more
21 of the dwelling units are occupied by LIHEAP-eligible households.
22 (13) "Person" means any individual, partnership, corporation, company, society, or
23 association, whether created for-profit or nonprofit purposes.
24 (14) "Petroleum product" means all petroleum derivatives, whether in bond or not, which
25 are commonly burned to produce heat, electricity, or motion or which are commonly processed to
26 produce synthetic gas for burning, including propane, gasoline, unleaded gasoline, kerosene,
27 heating oil, diesel fuel, and number 4, number 5 and residual oil for utility and non-utility uses. All
28 aircraft fuels (including kerosene based jet fuel) used by commercial airplanes in Rhode Island and
29 all aircraft fuels brought into Quonset and T.F. Green airports are exempt from the fee. Fuels
30 brought into Rhode Island in airplane fuel tanks are exempt.
31 (15) "Resident" means a person eighteen (18) years of age or older who is a resident of
32 Rhode Island. All persons registered to vote in Rhode Island or all persons eighteen (18) years of
33 age or older who hold a valid Rhode Island driver's license or photo ID shall be presumptively
34 considered residents for the purposes of this chapter. Persons who do not meet the requirements for
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 1 presumptive eligibility may establish eligibility by presenting other acceptable documentation.
2 (16) "Small business property" means the premises, whether owned or leased, of any
3 employer, other than a public body, that is a small business as defined by the United States Small
4 Business Administration (SBA).
5 23-82.1-3. Carbon pricing.
6 (a) A fee shall be collected on all non-exempt fossil fuels within the state for purposes of
7 distribution or use within the state, at the rate specified in subsection (b) of this section, in the
8 manner specified in subsections (e) through (l) of this section.
9 (b) Commencing on the implementation date, a fee shall be charged at a rate of fifteen
10 dollars ($15.00) per metric ton of CO2e that would be released by burning the fuel sold. In each
11 subsequent fiscal year, the rate shall be the rate of the previous fiscal year plus five dollars ($5.00),
12 until it reaches a rate of fifty dollars ($50.00) per ton. After the rate reaches fifty dollars ($50.00)
13 per ton, in each subsequent fiscal year the rate will increase in accordance with inflation, as
14 measured by Rhode Island's cost-of-living-adjustments calculated using the United States Bureau
15 of Labor Statistics Consumer Price Index or, if that index is not available, another index adopted
16 by the director of revenue.
17 (c) The director of revenue shall calculate and publish the rate in current dollars for each
18 year, by December 1.
19 (d) In sales where greenhouse gas emissions from the fossil fuels are to be permanently
20 sequestered and not released into the atmosphere, charges on the fossil fuels shall be reduced by
21 the director of revenue in proportion to the amount of CO2e that is to be sequestered. The office of
22 energy resources shall ensure that in such cases, the emissions are actually sequestered and not
23 released into the atmosphere.
24 (e) The fee shall be collected on all petroleum products at their first point of sale within the
25 state for consumption or distribution within the state.
26 (f) All suppliers of electricity, including all electric distribution companies operating in the
27 state and all competitive suppliers of electricity to end users, shall pay the fee on behalf of all of
28 their electricity customers on the basis of each kilowatt hour of electricity used by each distribution
29 customer. The per kilowatt hour fee to be paid by the supplier of electricity will be calculated in
30 the following manner:
31 (1) The fee shall be calculated on an annual basis, based on the electricity fuel mix as
32 defined above.
33 (2) The CO2e of every kilowatt hour of electricity shall be determined by taking the
34 weighted average of the natural gas, coal, and oil portions of the fuel mix and multiplying each of
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 1 those portions separately by the amount of CO2e emissions created per kilowatt hour of electricity
2 produced by each such fuel, as those carbon intensity levels are from time to time determined by
3 the United States Energy Information Administration (EIA).
4 (3) The supplier of electricity shall deduct from the fee calculated by subsections (f)(1) and
5 (f)(2) of this section an amount equal to the amount it paid for the same year on account of regional
6 greenhouse gas initiative (RGGI) clearing auctions; provided, however, that the amount so
7 deducted may be no greater than the total amount of the fee as calculated in subsections (f)(1) and
8 (f)(2) of this section. The electricity supplier shall also deduct from the fee calculated an amount
9 equal to the amount it may have paid for NE-GIS certificates as defined in § 39-26-2.
10 (g) On April 1 of each year, each supplier of electricity shall file with the commission the
11 result of its proposed calculation for the year beginning the following July 1. The filing will include
12 sufficient supporting data to enable the commission to determine whether the calculation by the
13 supplier of electricity was made fully in accordance with subsection (f) of this section. Upon receipt
14 of the calculation by the supplier of electricity, the commission shall open a docket. The sole
15 purpose of the docket shall be for the commission to determine whether the calculation by the
16 supplier of electricity was made fully in accordance with subsection (f) of this section. If the
17 commission determines that the calculation by the supplier of electricity was made fully in
18 accordance with subsection (f) of this section, the commission shall, no later than May 15 of the
19 same year, issue its order approving the calculation. If the commission determines that the
20 calculation by the supplier of electricity did not fully comply with subsection (f) of this section, the
21 commission shall issue an order stating clearly the errors that were made by the supplier of
22 electricity. In that event, the supplier of electricity shall have twenty-one (21) days to make a
23 compliance filing with the commission, correcting the errors identified in the commission's order.
24 (h) Any entity which generates more than twenty-five thousand kilowatt hours (25,000
25 kwh) of electricity for on-site use using any combination of one or more fossil fuels shall be
26 obligated to pay the carbon price, which shall be calculated by multiplying the quantity of each
27 separate fossil fuel combusted to produce electricity by the CO2e emissions of each separate fuel
28 so combusted. Within one year following the date of enactment of this chapter, the director of
29 revenue shall issue rules, pursuant to chapter 35 of title 42, for the regular and efficient calculation,
30 assessment, and collection of these carbon price amounts. Any fee already paid on said fuel
31 pursuant to this section shall be deducted from the fee that would otherwise be due under this
32 subsection.
33 (i) The local distribution company for natural gas shall pay the fee on behalf of all of its
34 distribution customers. The fee shall be calculated by multiplying the number of cubic feet of
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 1 natural gas used by each customer by the amount of CO2e released by burning one cubic foot of
2 natural gas, as that value is from time to time determined by the United States Energy Information
3 Administration (EIA).
4 (j) The office of energy resources shall determine the amount of CO2e released in the form
5 of escaped methane due to the extraction, transport, or distribution of natural gas before the point
6 of consumption in Rhode Island, and shall add an additional charge to the carbon price for all
7 natural gas or natural-gas-based electricity, based on the rate specified in subsection (b) of this
8 section. This fee shall be published no later than December 10 of each year.
9 (k) In the event that a separate fee on the greenhouse gas content of transportation fuels is
10 established, this fee shall be deduct