Bill Summary – FastDemocracy

-- S 0634 SUBSTITUTE B
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     LC001726/SUB B
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                       STATE              OF        RHODE                 ISLAND
                                          IN GENERAL ASSEMBLY
                                        JANUARY SESSION, A.D. 2021
                                              ____________
                                                AN ACT
     RELATING TO PUBLIC UTILITIES AND CARRIERS -- PUBLIC UTILITIES COMMISSION
                Introduced By: Senator V. Susan Sosnowski
                Date Introduced: March 18, 2021
                Referred To: Senate Commerce
     It is enacted by the General Assembly as follows:
         SECTION 1. Section 39-1-27.7 of the General Laws in Chapter 39-1 entitled "Public
 Utilities Commission" is hereby amended to read as follows:
         39-1-27.7. System reliability and least-cost procurement.
         (a) Least-cost procurement shall comprise system reliability and energy efficiency and
 conservation procurement, as provided for in this section, and supply procurement, as provided for
 in § 39-1-27.8, as complementary but distinct activities that have as common purpose meeting
 electrical and natural gas energy needs in Rhode Island, in a manner that is optimally cost-effective,
 reliable, prudent, and environmentally responsible.
         (b) The commission shall establish not later than June 1, 2008, standards for system
 reliability and energy efficiency and conservation procurement that shall include standards and
 guidelines for:
         (1) System reliability procurement, including but not limited to:
         (i) Procurement of energy supply from diverse sources, including, but not limited to,
 renewable energy resources as defined in chapter 26 of this title;
         (ii) Distributed generation, including, but not limited to, renewable energy resources and
 thermally leading combined heat and power systems, that is reliable and is cost-effective, with
 measurable, net system benefits;
         (iii) Demand response, including, but not limited to, distributed generation, back-up
 generation, and on-demand usage reduction, that shall be designed to facilitate electric customer
 participation in regional demand response programs, including those administered by the
 independent service operator of New England ("ISO-NE"), and/or are designed to provide local
 system reliability benefits through load control or using on-site generating capability;
         (iv) To effectuate the purposes of this division, the commission may establish standards
 and/or rates (A) For qualifying distributed generation, demand response, and renewable energy
 resources; (B) For net metering; (C) For back-up power and/or standby rates that reasonably
 facilitate the development of distributed generation; and (D) For such other matters as the
 commission may find necessary or appropriate.
         (2) Least-cost procurement, which shall include procurement of energy efficiency and
 energy conservation measures that are prudent and reliable and when such measures are lower cost
 than acquisition of additional supply, including supply for periods of high demand.
         (c) The standards and guidelines provided for by subsection (b) shall be subject to periodic
 review and as appropriate amendment by the commission, which review will be conducted not less
 frequently than every three (3) years after the adoption of the standards and guidelines.
         (d) To implement the provisions of this section:
         (1) The commissioner of the office of energy resources and the energy efficiency and
 resources management council, either jointly or separately, shall provide the commission findings
 and recommendations with regard to system reliability and energy efficiency and conservation
 procurement on or before March 1, 2008, and triennially on or before March 1, thereafter through
 March 1, 2024 March 1, 2028. The report shall be made public and be posted electronically on the
 website of the office of energy resources.
         (2) The commission shall issue standards not later than June 1, 2008, with regard to plans
 for system reliability and energy efficiency and conservation procurement, which standards may
 be amended or revised by the commission as necessary and/or appropriate.
         (3) The energy efficiency and resources management council shall prepare by July 15,
 2008, a reliability and efficiency procurement opportunity report that shall identify opportunities
 to procure efficiency, distributed generation, demand response, and renewables and that shall be
 submitted to the electrical distribution company, the commission, the office of energy resources,
 and the joint committee on energy.
         (4) Each electrical and natural gas distribution company shall submit to the commission on
 or before September 1, 2008, and triennially on or before September 1 thereafter through September
 1, 2024 September 1, 2028, a plan for system reliability and energy efficiency and conservation
 procurement. In developing the plan, the distribution company may seek the advice of the
 commissioner and the council. The plan shall include measurable goals and target percentages for
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 each energy resource, pursuant to standards established by the commission, including efficiency,
 distributed generation, demand response, combined heat and power, and renewables. The plan shall
 be made public and be posted electronically on the website of the office of energy resources, and
 shall also be submitted to the general assembly.
         (5) The commission shall issue an order approving all energy-efficiency measures that are
 cost-effective and lower cost than acquisition of additional supply, with regard to the plan from the
 electrical and natural gas distribution company, and reviewed and approved by the energy
 efficiency and resources management council, and any related annual plans, and shall approve a
 fully reconciling funding mechanism to fund investments in all efficiency measures that are cost-
 effective and lower cost than acquisition of additional supply, not greater than sixty (60) days after
 it is filed with the commission.
         (6)(i) Each electrical and natural gas distribution company shall provide a status report,
 which shall be public, on the implementation of least-cost procurement on or before December 15,
 2008, and on or before February 1, 2009, to the commission, the division, the commissioner of the
 office of energy resources, and the energy efficiency and resources management council which
 may provide the distribution company recommendations with regard to effective implementation
 of least-cost procurement. The report shall include the targets for each energy resource included in
 the order approving the plan and the achieved percentage for energy resource, including the
 achieved percentages for efficiency, distributed generation, demand response, combined heat and
 power, and renewables, as well as the current funding allocations for each eligible energy resource
 and the businesses and vendors in Rhode Island participating in the programs. The report shall be
 posted electronically on the website of the office of energy resources.
         (ii) Beginning on November 1, 2012, or before, each electric distribution company shall
 support the installation and investment in clean and efficient combined heat and power installations
 at commercial, institutional, municipal, and industrial facilities. This support shall be documented
 annually in the electric distribution company's energy-efficiency program plans. In order to
 effectuate this provision, the energy efficiency and resource management council shall seek input
 from the public, the gas and electric distribution company, the commerce corporation, and
 commercial and industrial users, and make recommendations regarding services to support the
 development of combined heat and power installations in the electric distribution company's annual
 and triennial energy-efficiency program plans.
         (iii) The energy-efficiency annual plan shall include, but not be limited to, a plan for
 identifying and recruiting qualified combined heat and power projects, incentive levels, contract
 terms and guidelines, and achievable megawatt targets for investments in combined heat and power
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 systems. In the development of the plan, the energy efficiency and resource management council
 and the electric distribution company shall factor into the combined heat and power plan and
 program, the following criteria: (A) Economic development benefits in Rhode Island, including
 direct and indirect job creation and retention from investments in combined heat and power
 systems; (B) Energy and cost savings for customers; (C) Energy supply costs; (D) Greenhouse gas
 emissions standards and air quality benefits; and (E) System reliability benefits.
         (iv) The energy efficiency and resource management council shall conduct at least one
 public review meeting annually, to discuss and review the combined heat and power program, with
 at least seven (7) business days' notice, prior to the electric and gas distribution utility submitting
 the plan to the commission. The commission shall evaluate the submitted combined heat and power
 program as part of the annual energy-efficiency plan. The commission shall issue an order
 approving the energy-efficiency plan and programs within sixty (60) days of the filing.
         (e) If the commission shall determine that the implementation of system reliability and
 energy efficiency and conservation procurement has caused, or is likely to cause, under or over-
 recovery of overhead and fixed costs of the company implementing the procurement, the
 commission may establish a mandatory rate-adjustment clause for the company so affected in order
 to provide for full recovery of reasonable and prudent overhead and fixed costs.
         (f) The commission shall conduct a contested case proceeding to establish a performance-
 based incentive plan that allows for additional compensation for each electric distribution company
 and each company providing gas to end-users and/or retail customers based on the level of its
 success in mitigating the cost and variability of electric and gas services through procurement
 portfolios.
         (g)(1) The office of energy resources shall conduct a study and analysis of the electric and
 gas distribution company's state energy efficiency programs that will examine implemented
 program and planned conservation measures and review and confirm the claimed energy savings.
 In carrying out this study, the office shall utilize a representative sample of different customer
 classes and measures that have and/or will be participating in the state energy efficiency programs.
 At a minimum, the study performed by the office of energy resources shall include the following
 in its scope of work:
         (i) Independently review and summarize the electric and gas distribution company process
 for incorporating results from completed evaluation studies into ongoing energy efficiency program
 reporting and implementation.
         (ii) Conduct an independent review of gas and electricity efficiency programs, which may
 include billing analysis techniques. The scope and subjects of this analysis will be decided by the
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 working group with input and advice from an independent consultant. The analysis will be
 conducted by a qualified independent consultant using industry accepted methods.
         (iii) Review the data-collection practices, including metering equipment used; sampling
 frequency; sample sizes; and data validation procedures, and the methods for data analysis
 employed, as deemed appropriate by the independent evaluator.
         (iv) Study results and recommendations will be presented to the public utilities commission
 and the energy efficiency and resource management council.
         (2) The office of energy resources shall consult with the working group in development of
 the request for proposals (RFP), and during the course of the study, including the preliminary study
 results. The working group shall be comprised of one representative from each of the following
 groups chosen by the office of energy resources:
         (i) Large commercial and industrial energy users;
         (ii) Small business energy users;
         (iii) Residential energy users;
         (iv) Municipal and state energy users;
         (v) Low-income energy users;
         (vi) Electric and gas distribution company; and
         (vii) Energy efficiency and resource management council.
         (3) The office of energy resources, in consultation with the electric and gas distribution
 company and representatives referenced in subsection (g)(2), shall be authorized to hire an energy
 consulting company or firm to carry out the energy efficiency verification study. The costs
 associated with this study, including, but not limited to, those associated with the consultant or firm
 contract and reasonable administrative costs incurred by the office in the execution of subsection
 (g) of this section, shall be recoverable through the system benefit charge subject to commission
 approval. Funding shall be transferred from the electric and gas distribution utility to the office of
 energy resources upon request by the office.
         (4) The office of energy resources shall submit this report on or before October 30, 2019,
 to the governor, the president of the senate, and the speaker of the house. The office and its selected
 energy consulting company or firm shall host two (2) public presentations on the preliminary and
 final results of the study.
         SECTION 2. Section 39-2-1.2 of the General Laws in Chapter 39-2 entitled "Duties of
 Utilities and Carriers" is hereby amended to read as follows:
         39-2-1.2. Utility base rate -- Advertising, demand-side management, and renewables.
         (a) In addition to costs prohibited in § 39-1-27.4(b), no public utility distributing or
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 providing heat, electricity, or water to or for the public shall include as part of its base rate any
 expenses for advertising, either direct or indirect, that promotes the use of its product or service, or
 is designed to promote the public image of the industry. No public utility may furnish support of
 any kind, direct or indirect, to any subsidiary, group, association, or individual for advertising and
 include the expense as part of its base rate. Nothing contained in this section shall be deemed as
 prohibiting the inclusion in the base rate of expenses incurred for advertising, informational or
 educational in nature, that is designed to promote public safety conservation of the public utility's
 product or service. The public utilities commission shall promulgate such rules and regulations as
 are necessary to require public disclosure of all advertising expenses of any kind, direct or indirect,
 and to otherwise effectuate the provisions of this section.
         (b) Effective as of January 1, 2008, and for a period of fifteen (15) twenty (20) years
 thereafter, each electric distribution company shall include a charge per kilowatt-hour delivered to
 fund demand-side management programs. The 0.3 mills per kilowatt-hour delivered to fund
 renewable energy programs shall remain in effect until December 31, 2022 2028. The electric
 distribution company shall establish and, after July 1, 2007, maintain, two (2) separate accounts,
 one for demand-side management programs (the "demand-side account"), which shall be funded
 by the electric demand-side charge and administered and implemented by the distribution company,
 subject to the regulatory reviewing authority of the commission, and one for renewable energy
 programs, which shall be administered by the Rhode Island commerce corporation pursuant to §
 42-64-13.2 and shall be held and disbursed by the distribution company as directed by the Rhode
 Island commerce corporation for the purposes of developing, promoting, and supporting renewable
 energy programs. During the time periods established in this subsection, the commission may, in
 its discretion, after notice and public hearing, increase the sums for demand-side management and
 renewable resources. In addition, the commission shall, after notice and public hearing, determine
 the appropriate charge for these programs. The office of energy resources, and/or the administrator
 of the renewable energy programs, may seek to secure for the state an equitable and reasonable
 portion of renewable energy credits or certificates created by private projects funded through those
 programs. As used in this section, "renewable energy resources" shall mean: (1) Power generation
 technologies, as defined in § 39-26-5, "eligible renewable energy resources," including off-grid and
 on-grid generating technologies located in Rhode Island, as a priority; (2) Research and
 development activities in Rhode Island pertaining to eligible renewable energy resources and to
 other renewable energy technologies for electrical generation; or (3) Projects and activities directly
 related to implementing eligible renewable energy resources projects in Rhode Island.
 Technologies for converting solar energy for space heating or generating domestic hot water may
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 also be funded through the renewable energy programs. Fuel cells may be considered an energy
 efficiency technology to be included in demand-side manage