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Rhode Island House Bill H5576

Rhode Island 2025 Regular Session

Rhode Island House Bill H5576 Compare Versions

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99 S T A T E O F R H O D E I S L A N D
1010 IN GENERAL ASSEMBLY
1111 JANUARY SESSION, A.D. 2025
1212 ____________
1313
1414 A N A C T
1515 RELATING TO PUBLIC UTILITIES AND CARRIERS -- UTILITY THERMAL ENERGY
1616 NETWORK AND JOBS ACT
1717 Introduced By: Representatives Cortvriend, Edwards, Carson, McGaw, Knight, Spears,
1818 Fogarty, Potter, Speakman, and Boylan
1919 Date Introduced: February 26, 2025
2020 Referred To: House Corporations
2121
2222
2323 It is enacted by the General Assembly as follows:
2424 SECTION 1. Title 39 of the General Laws entitled "PUBLIC UTILITIES AND 1
2525 CARRIERS" is hereby amended by adding thereto the following chapter: 2
2626 CHAPTER 36 3
2727 UTILITY THERMAL ENERGY NETWORK AND JOBS ACT 4
2828 39-36-1. Short title. 5
2929 This act shall be known and may be cited as the “Utility Thermal Energy Network and Jobs 6
3030 Act”. 7
3131 39-36-2. Thermal energy networks. 8
3232 (a) The general assembly finds and declares that thermal energy networks are essential 9
3333 infrastructure in meeting the just transition, equity, and decarbonization requirements of chapter 10
3434 6.2 of title 42 ("act on climate") and further finds and declares that: 11
3535 (1) To the extent feasible, the public utility company that provides electric distribution as 12
3636 defined in § 39-1-2(a)(12), as well as natural gas as defined in § 39-1-2(a)(17) shall maximize cost-13
3737 effective investments in thermal energy networks when it is in the public interest; 14
3838 (2) The public utilities commission shall exercise its authority to implement the provisions 15
3939 of this chapter and, to the extent feasible, support the implementation of thermal energy networks, 16
4040 pursuant to chapter 6.2 of title 42 (Act on Climate). 17
4141 (b) Within one year of the effective date of this chapter, the public utilities commission 18
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4545 shall initiate a proceeding to support the development of thermal energy networks for the purpose 1
4646 of meeting the greenhouse gas emissions, just transition, and equity goals of chapter 6.2 of title 42. 2
4747 The matters the commission shall consider in such proceeding shall include, but shall not be limited 3
4848 to, the appropriate ownership, market, cost-effectiveness, and rate structures for thermal energy 4
4949 networks and whether the provision of thermal energy services by gas and/or electric utilities is in 5
5050 the public interest. 6
5151 (1) The commission shall promulgate rules and regulations within two (2) years to: 7
5252 (i) Create fair market access rules for utility-owned thermal energy networks to accept 8
5353 thermal energy that aligns with the climate justice, just transition, and greenhouse gas emissions 9
5454 reductions requirements of chapter 6.2 of title 42 and that does not increase greenhouse gas 10
5555 emissions or co-pollutants; 11
5656 (ii) Exempt small-scale thermal energy networks not owned by utilities from commission 12
5757 regulation; 13
5858 (iii) Promote the training and transition of utility workers impacted by this chapter; 14
5959 (iv) Encourage third party participation and competition where it will maximize benefits 15
6060 to customers; and 16
6161 (v) Establish equitable rules for cost recovery by utilities for thermal energy networks. 17
6262 (2) In establishing rules and regulations for thermal energy networks, the commission shall 18
6363 convene a stakeholder advisory committee composed of technical experts, members with relevant 19
6464 engineering expertise, and public members or entities who will be significantly impacted by the 20
6565 expansion of thermal energy networks. The advisory committee shall be consulted on a range of 21
6666 questions developed by the commission to support the regulation of thermal energy networks. 22
6767 39-36-3. Thermal energy network infrastructure plans. 23
6868 (a) No later than September 1, 2027, and every three (3) years thereafter, the public utility 24
6969 company shall issue a plan over a three (3) year period for cost-effective investments in thermal 25
7070 energy network infrastructure to assist in the just transition to a clean, affordable, and reliable 26
7171 distribution system in a cost-effective manner. To the extent feasible, the plan shall ensure that at 27
7272 least forty- percent (40%) of its investments benefit environmental justice communities. The plan 28
7373 shall be in compliance with the regulations set forth in § 39-36-2 and each decision made within 29
7474 the plan shall be justified by the public utility company. 30
7575 (b) The public utility company shall propose the plan to the public utilities commission in 31
7676 a filing for review and approval within ninety (90) days. The commission shall determine whether 32
7777 it is in the public interest to approve or modify such thermal energy network plans and shall issue 33
7878 an order directing the public utility company to implement such proposed or modified thermal 34
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8282 energy network plans. If the public utility company fails to show justification behind any decisions 1
8383 made within the plan, the commission shall order the public utility company to clarify or modify 2
8484 any outstanding decisions in compliance with the requirements of this chapter. 3
8585 39-36-4. Thermal energy pilot projects. 4
8686 (a) Within three (3) months of the effective date of this chapter, the public utility company 5
8787 that provides electric distribution as defined in § 39-1-2(a)(12), as well as natural gas as defined in 6
8888 § 39-1-2(a)(17), shall initiate a process to support the development of thermal energy networks for 7
8989 the purpose of meeting the greenhouse gas emissions and just transition goals of chapter 6.2 of title 8
9090 42. The matters considered by the public utility company shall be to determine the feasibility of 9
9191 constructing at least three (3) and up to five (5) thermal energy network pilot projects. The public 10
9292 utility company may use outside engineering experts to provide technical expertise on studying 11
9393 feasibility if it deems outside experts will provide expertise beyond the knowledge and capacity of 12
9494 current employees. The public utility company shall not seek recovery through any cost recovery 13
9595 mechanism of the incremental costs associated with studying the feasibility of thermal energy 14
9696 networks, and will hold customers harmless from those incremental costs. 15
9797 (1) Considerations when determining such feasibility shall include, but shall not be limited 16
9898 to: 17
9999 (i) Greenhouse gas emissions reductions; 18
100100 (ii) A cost-effective analysis that includes measures that are projected to generate energy 19
101101 cost savings and avoided social cost of carbon dioxide equal to or greater than overnight capital 20
102102 costs and operations and maintenance costs over the useful life of the equipment; 21
103103 (iii) Engineering and design requirements; 22
104104 (iv) Operations and maintenance requirements; 23
105105 (v) Ownership of buildings receiving benefits from thermal energy networks and/or entities 24
106106 responsible for facilities receiving benefits from thermal energy networks; and 25
107107 (vi) Communities receiving the greatest benefits from reduced air pollution and improved 26
108108 air quality. 27
109109 (2) In meeting the requirements of this section, the public utility company shall develop an 28
110110 initial list of locations to study the feasibility of constructing pilot thermal energy networks. Those 29
111111 locations shall be diverse in geography, customer class, and average annual consumption of thermal 30
112112 energy. The initial list shall include, but not be limited to: 31
113113 (i) The port of Providence and neighboring communities; 32
114114 (ii) Residential buildings, hospitals, and healthcare facilities located in lower South 33
115115 Providence; 34
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119119 (iii) Facilities within the jurisdiction of the Rhode Island Convention Center Authority; 1
120120 (iv) Facilities within the jurisdiction of the Quonset Development Corporation; 2
121121 (v) University of Rhode Island; 3
122122 (vi) Aquidneck Island; and 4
123123 (vii) The port of Galilee. 5
124124 (3) The public utility company is authorized to negotiate directly with relevant entities that 6
125125 oversee facilities under consideration by the public utility company to construct pilot thermal 7
126126 energy networks. Negotiations may include, but not be limited to, contract terms, equitable 8
127127 financing agreements, oversight, design, and engineering. The public utility company is hereby 9
128128 authorized and directed to maximize federal funding and financing opportunities through the 10
129129 Inflation Reduction Act, the Infrastructure Investment and Jobs Act, as well as state funding and 11
130130 financing opportunities. At least one pilot project shall be proposed in an environmental justice 12
131131 focus area, as defined by the department of environmental management. 13
132132 (4) Upon making a final determination of locations that meet the feasibility requirements 14
133133 in § 39-36-2(a)(1), the public utility company shall develop a final list and submit in a public filing 15
134134 to the public utilities commission for review and approval at least three (3) and up to five (5) 16
135135 proposed pilot thermal energy network projects within nine (9) months of the effective date of this 17
136136 chapter. The pilot project proposals shall include specific customer protection plans and shall be 18
137137 made publicly available on the commission's website and shall be subject to a public comment 19
138138 period of no less than thirty (30) days. 20
139139 (b)(1) Upon receiving the filing from the public utility company, the public utility 21
140140 commission shall review and consider for approval the list of proposed pilot thermal energy 22
141141 network projects. The public utility commission is authorized to conditionally approve any pilot 23
142142 thermal energy network projects proposed by the public utility company. If the public utility 24
143143 company determines through its negotiations with relevant entities that it is unable to meet the 25
144144 requirements of this chapter, the commission shall have the authority to evaluate and rule on any 26
145145 outstanding terms in dispute, and order the public utility company to proceed with constructing the 27
146146 pilot thermal energy networks. The commission shall determine whether it is in the public interest 28
147147 to approve or modify such pilot thermal energy network projects and shall issue an order directing 29
148148 the public utility company to implement such proposed or modified pilot thermal energy network 30
149149 projects. 31
150150 (2) In considering whether pilot thermal energy network projects are in the public interest, 32
151151 the commission shall consider whether the pilot project will develop information useful for the 33
152152 commission's promulgation of rules and regulations governing thermal energy networks, whether 34
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156156 the pilot project furthers the climate justice and/or emissions reduction mandates of chapter 6.2 of 1
157157 title 42, whether the pilot project advances financial and technical approaches to equitable and 2
158158 affordable building electrification, and whether the pilot project creates benefits to customers and 3
159159 society at large, including, but not limited to, public health benefits in areas with disproportionate 4
160160 environmental or public health burdens, job retention and creation, reliability, and increased 5
161161 affordability of renewable thermal energy options. 6
162162 (3) The public utility company shall proceed with construction of pilot thermal energy 7
163163 networks within six (6) months of final approval of the public utility commission. 8
164164 (c) The public utility company shall report to the commission, on a quarterly basis, and 9
165165 until completion of the pilot thermal energy network project as determined by the commission, the 10
166166 status of each pilot thermal energy network project. The commission shall post and make publicly 11
167167 available such reports on its website. The report shall include, but not be limited to the: 12
168168 (1) The stage of development of each pilot project; 13
169169 (2) Barriers to development; 14
170170 (3) Number of customers served; 15
171171 (4) Costs of the pilot project; 16
172172 (5) Number of jobs retained or created by the pilot project; and 17
173173 (6) Any other such information the commission deems to be in the public interest. 18
174174 39-36-5. Just transition standards. 19
175175 (a) Any thermal energy network created under this chapter shall demonstrate that the public 20
176176 utility company has entered into a labor peace agreement with a bona fide labor organization of 21
177177 jurisdiction that is actively engaged in representing gas and electric company employees. The labor 22
178178 peace agreement shall apply to the employees necessary for the maintenance and operation of such 23
179179 thermal energy network. The labor peace agreement shall be an ongoing material condition of 24
180180 authorization to maintain and operate such thermal energy networks. The employees eligible for 25
181181 these positions shall first be selected from and offered to a pool of transitioning utility workers who 26
182182 have lost, or are at risk of losing, their employment with a utility downsizing its gas transmission 27
183183 and distribution system. Such a list of potential employees shall be provided by affected unions and 28
184184 provided to the department of labor and training. The department of labor and training shall update 29
185185 and provide such list to the public utility company ninety (90) days prior to purchase, acquisition, 30
186186 and/or construction of any thermal energy network created under this chapter. 31
187187 (b) As part of any agreement with a public entity to construct a thermal energy network 32
188188 project that enters or crosses a public right-of-way, as defined in § 39-1-2, the public utility 33
189189 company shall: 34
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193193 (1) For projects valued over twenty-five million dollars ($25,000,000), the public utility 1
194194 company shall conduct an independent, objective, reasoned study, using reviewable criteria, to 2
195195 determine whether adoption of a project labor agreement on the proposed project or projects will 3
196196 help achieve the goals of the state purchases act. 4
197197 (2) For projects of one million dollars ($1,000,000) or greater, the public utility company 5
198198 shall require contractors on the project to participate in a non-provisionally approved 6
199199 apprenticeship program for all apprenticeable crafts or trades that will be employed on the project, 7
200200 and shall employ registered apprentices to perform fifteen percent (15%) of the total labor hours. 8
201201 (3) For projects in excess of ten million dollars ($10,000,000), all construction workers 9
202202 shall be paid in accordance with the wages and benefits required pursuant to chapter 13 of title 37 10
203203 with all contractors and subcontractors required to file certified payrolls, which shall be considered 11
204204 public records, on a monthly basis for all work completed in the preceding month on a uniform 12
205205 form prescribed by the department of labor and training. Failure to follow the requirements pursuant 13
206206 to chapter 13 of title 37 shall constitute a material violation and a material breach of the agreement 14
207207 with the state. 15
208208 (4) The public utility company shall take all necessary actions to ensure that each contractor 16
209209 and subcontractor involved in the construction of the project completes a sworn certification that 17
210210 the prime contractor, general contractor, or subcontractor: 18
211211 (i) Has the necessary resources to perform the portion of the covered project to which the 19
212212 contractor or subcontractor is assigned, including the necessary technical, financial, and personnel 20
213213 resources; 21
214214 (ii) Has all required contractor, specialty contractor or trade licenses, certifications or 22
215215 certificates required of any business entity or individual by applicable state or local law; 23
216216 (iii) May participate in apprenticeship programs pursuant to 29 C.F.R. Part 29 and Part 30 24
217217 for the occupations the contractor will employ for its awarded scope of work on the covered project; 25
218218 (iv) Pursuant to § 39-36-3(b)(2), ensure that no less than fifteen percent (15%) of the labor 26
219219 hours worked on the project shall be performed by registered apprentices for all crafts or trades 27
220220 with approved apprenticeship programs that will be employed on the project; 28
221221 (v) During the previous three (3) years: 29
222222 (A) Has not been debarred by any government agency; 30
223223 (B) Has not defaulted on any project; 31
224224 (C) Has not had any license, certification, or other credential relating to the business 32
225225 revoked or suspended; and 33
226226 (D) Has not been found in violation of any law applicable to the contractor’s or 34
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230230 subcontractor’s business that resulted in the payment of a fine, back pay damages, or any other type 1
231231 of penalty in the amount of five thousand dollars ($5,000) or more; and 2
232232 (5) Piping during new thermal energy network construction shall be undertaken by 3
233233 journeyperson pipefitters or journeyperson pipefitter apprentices, as defined in § 28-27-4.2. 4
234234 (c) The department of labor and training shall promulgate such rules and regulations as are 5
235235 necessary to implement the enforcement of this chapter. 6
236236 39-36-6. Severability. 7
237237 If any provision of this chapter or the application thereof to any person or circumstances is 8
238238 held invalid, such invalidity shall not affect other provisions or applications of the chapter, which 9
239239 can be given effect without the invalid provision or application, and to this end the provisions of 10
240240 this chapter are declared to be severable. 11
241241 SECTION 2. Sections 39-1-1, 39-1-2 and 39-1-3 of the General Laws in Chapter 39-1 12
242242 entitled "Public Utilities Commission" are hereby amended to read as follows: 13
243243 39-1-1. Declaration of policy — Purposes. 14
244244 (a) The general assembly finds and therefore declares that: 15
245245 (1) The businesses of distributing electrical energy, producing and transporting 16
246246 manufactured and natural gas, thermal energy, operating water works and thermal energy networks, 17
247247 furnishing supplies of water for domestic, industrial, and commercial use, offering to the public 18
248248 transportation of persons and property, furnishing and servicing telephonic and wireless audio and 19
249249 visual communication systems, and operation of community antenna television systems are 20
250250 affected with a public interest; 21
251251 (2) Supervision and reasonable regulation by the state of the manner in which the 22
252252 businesses construct their systems and carry on their operations within the state are necessary to 23
253253 protect and promote the convenience, health, comfort, safety, accommodation, and welfare of the 24
254254 people, and are a proper exercise of the police power of the state; and 25
255255 (3) Preservation of the state’s resources, commerce, and industry requires the assurance of 26
256256 adequate public transportation and communication facilities, water supplies, and an abundance of 27
257257 energy, all supplied to the people with reliability, at economical cost, and with due regard for the 28
258258 preservation and enhancement of the environment, the conservation of natural resources, including 29
259259 scenic, historic, and recreational assets, and the strengthening of long-range, land-use planning. 30
260260 (b) It is hereby declared to be the policy of the state to provide fair regulation of public 31
261261 utilities and carriers in the interest of the public, to promote availability of adequate, efficient, and 32
262262 economical energy, communication, and transportation services and water supplies to the 33
263263 inhabitants of the state, to provide just and reasonable rates and charges for such services and 34
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267267 supplies, without unjust discrimination, undue preferences or advantages, or unfair or destructive 1
268268 competitive practices, and to cooperate with other states and agencies of the federal government in 2
269269 promoting and coordinating efforts to achieve realization of this policy. 3
270270 (c) To this end, there is hereby vested in the public utilities commission and the division of 4
271271 public utilities and carriers the exclusive power and authority to supervise, regulate, and make 5
272272 orders governing the conduct of companies offering to the public in intrastate commerce energy, 6
273273 communication, and transportation services and water supplies for the purpose of increasing and 7
274274 maintaining the efficiency of the companies, according desirable safeguards and convenience to 8
275275 their employees and to the public, and protecting them and the public against improper and 9
276276 unreasonable rates, tolls, and charges by providing full, fair, and adequate administrative 10
277277 procedures and remedies, and by securing a judicial review to any party aggrieved by such an 11
278278 administrative proceeding or ruling. 12
279279 (d) The legislature also finds and declares, as of 1996, the following: 13
280280 (1) That lower retail electricity rates would promote the state’s economy and the health and 14
281281 general welfare of the citizens of Rhode Island; 15
282282 (2) That current research and experience indicates that greater competition in the electricity 16
283283 industry would result in a decrease in electricity rates over time; 17
284284 (3) That greater competition in the electricity industry would stimulate economic growth; 18
285285 (4) That it is in the public interest to promote competition in the electricity industry and to 19
286286 establish performance-based ratemaking for regulated utilities; 20
287287 (5) That in connection with the transition to a more competitive electric utility industry, 21
288288 public utilities should have a reasonable opportunity to recover transitional costs associated with 22
289289 commitments prudently incurred in the past pursuant to their legal obligations to provide reliable 23
290290 electric service at reasonable costs; 24
291291 (6) That it shall be the policy of the state to encourage, through all feasible means and 25
292292 measures, states where fossil-fueled, electric-generating units producing air emissions affecting 26
293293 Rhode Island air quality are located to reduce such emissions over time to levels that enable cost-27
294294 effective attainment of environmental standards within Rhode Island; and 28
295295 (7) That in a restructured electrical industry the same protections currently afforded to low-29
296296 income customers shall continue. 30
297297 (e) The legislature further finds and declares as of 2006: 31
298298 (1) That prices of energy, including especially fossil-fuels and electricity, are rising faster 32
299299 than the cost of living and are subject to sharp fluctuations, which conditions create hardships for 33
300300 many households, institutions, organizations, and businesses in the state; 34
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304304 (2) That while utility restructuring has brought some benefits, notably in transmission and 1
305305 distribution costs and more efficient use of generating capacities, it has not resulted in competitive 2
306306 markets for residential and small commercial-industrial customers, lower overall prices, or greater 3
307307 diversification of energy resources used for electrical generation; 4
308308 (3) That the state’s economy and the health and general welfare of the people of Rhode 5
309309 Island benefit when energy supplies are reliable and least-cost; and 6
310310 (4) That it is a necessary move beyond basic utility restructuring in order to secure for 7
311311 Rhode Island, to the maximum extent reasonably feasible, the benefits of reasonable and stable 8
312312 rates, least-cost procurement, and system reliability that includes energy resource diversification, 9
313313 distributed generation, and load management. 10
314314 39-1-2. Definitions. 11
315315 (a) Terms used in this title shall be construed as follows, unless another meaning is 12
316316 expressed or is clearly apparent from the language or context: 13
317317 (1) “Administrator” means the administrator of the division of public utilities and carriers. 14
318318 (2) “Airport” and “landing field” mean and include all airports and landing fields other 15
319319 than those owned by the state. 16
320320 (3) “Chairperson” means the chairperson of the public utilities commission. 17
321321 (4) “Charter carrier” means and includes all carriers for hire or compensation within this 18
322322 state not included in the definition of common carrier. 19
323323 (5) “Commission” means the public utilities commission. 20
324324 (6) “Commissioner” means a member of the public utilities commission. 21
325325 (7) “Common carrier,” except when used in chapters 12, 13, and 14 of this title, means and 22
326326 includes all carriers for hire or compensation, including railroads, street railways, express, freight 23
327327 and freight-line companies, dining-car companies, steam boat, motor boat, power boat, hydrofoil, 24
328328 and ferry companies and all other companies operating any agency or facility for public use in the 25
329329 conveyance over fixed routes, or between fixed termini within this state of persons or property by, 26
330330 or by a combination of, land, air, or water. 27
331331 (8) “Company” means and includes a person, firm, partnership, corporation, quasi-28
332332 municipal corporation, association, joint-stock association or company, and his, her, its, or their 29
333333 lessees, trustees, or receivers appointed by any court. 30
334334 (9) “Customer” means a company taking service from an electric distribution company at 31
335335 a single point of delivery or meter location. 32
336336 (10) “Distribution facility” means plant or equipment used for the distribution of electricity 33
337337 and that is not a transmission facility. 34
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341341 (11) “Division” means the division of public utilities and carriers. 1
342342 (12) “Electric distribution company” means a company engaging in the distribution of 2
343343 electricity or owning, operating, or controlling distribution facilities and shall be a public utility 3
344344 pursuant to subsection (20) of this section. 4
345345 (13) “Electric transmission company” means a company engaging in the transmission of 5
346346 electricity or owning, operating, or controlling transmission facilities. An electric transmission 6
347347 company shall not be subject to regulation as a public utility except as specifically provided in the 7
348348 general laws, but shall be regulated by the Federal Energy Regulatory Commission and shall 8
349349 provide transmission service to all nonregulated power producers and customers, whether affiliated 9
350350 or not, on comparable, nondiscriminatory prices and terms. Electric transmission companies shall 10
351351 have the power of eminent domain exercisable following a petition to the commission pursuant to 11
352352 § 39-1-31. 12
353353 (14) “Liquefied natural gas” means a fluid in the liquid state composed predominantly of 13
354354 methane and that may contain minor quantities of ethane, propane, nitrogen, or other components 14
355355 normally found in natural gas. 15
356356 (15) “Manufacturing customers” means all customers that have on file with an electric 16
357357 distribution company a valid certificate of exemption from the Rhode Island sales tax indicating 17
358358 the customer’s status as a manufacturer pursuant to § 44-18-30. 18
359359 (16) “Motor carriers” means any carrier regulated by the administrator pursuant to chapters 19
360360 3, 11, 12, 13, and 14 of this title. 20
361361 (17) “Natural gas” means the combustible, gaseous mixture of low-molecular-weight, 21
362362 paraffin hydrocarbons, generated below the surface of the earth, containing mostly methane and 22
363363 ethane with small amounts of propane, butane, and hydrocarbons, and sometimes nitrogen, carbon 23
364364 dioxide, hydrogen sulfide, and helium. 24
365365 (18) “Nonprofit housing development corporation” means a nonprofit corporation that has 25
366366 been approved as a 26 U.S.C. § 501(c)(3) corporation by the Internal Revenue Service, and is 26
367367 organized and operated primarily for the purpose of providing housing for low- and moderate-27
368368 income persons. 28
369369 (19) “Nonregulated power producer” means a company engaging in the business of 29
370370 producing, manufacturing, generating, buying, aggregating, marketing, or brokering electricity for 30
371371 sale at wholesale or for retail sale to the public; provided however, that companies that negotiate 31
372372 the purchase of electric generation services on behalf of customers and do not engage in the 32
373373 purchase and resale of electric generation services shall be excluded from this definition. A 33
374374 nonregulated power producer shall not be subject to regulation as a public utility except as 34
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378378 specifically provided in the general laws. 1
379379 (20) "Public right-of-way" means the area on, below, or above any street, avenue, 2
380380 boulevard, road, highway, sidewalk, alley, waterway, land, or easement that is owned, leased, or 3
381381 controlled by a public or quasi-public entity. 4
382382 (20)(21) “Public utility” means and includes every company that is an electric distribution 5
383383 company and every company operating or doing business in intrastate commerce and in this state 6
384384 as a railroad, street railway, common carrier, gas, thermal energy, liquefied natural gas, water, 7
385385 telephone, telegraph, and pipeline company, and every company owning, leasing, maintaining, 8
386386 managing, or controlling any plant or equipment, or any part of any plant or equipment, within this 9
387387 state for manufacturing, producing, transmitting, distributing, delivering, or furnishing natural or 10
388388 manufactured gas, directly or indirectly, to or for the public, or any cars or equipment employed 11
389389 on, or in connection with, any railroad or street railway for public or general use within this state, 12
390390 or any pipes, mains, poles, wires, conduits, fixtures, through, over, across, under, or along any 13
391391 public highways, parkways, or streets, public lands, waters, or parks for the transmission, 14
392392 transportation, or distribution of gas, or thermal energy networks for sale to the public for light, 15
393393 heat, cooling, or power for providing audio or visual telephonic or telegraphic communication 16
394394 service within this state, or any pond, lake, reservoir, stream, well, or distributing plant or system 17
395395 employed for the distribution of water to the consuming public within this state, including the water 18
396396 supply board of the city of Providence; provided, that, except as provided in § 39-16-9 and in P.L. 19
397397 1933, ch. 2072, as amended, this definition shall not be construed to apply to any public waterworks 20
398398 or water service owned and furnished by any city, town, water district, fire district, or any other 21
399399 municipal or quasi-municipal corporation, excepting the water supply board of the city of 22
400400 Providence, unless any city, town, water district, fire district, municipal or quasi-municipal 23
401401 corporation obtains water from a source owned or leased by the water resources board, either 24
402402 directly or indirectly, or obtains a loan from the board pursuant to the provisions of chapter 15.1 of 25
403403 title 46, or sells water, on a wholesale or retail basis, inside and outside the territorial limits of the 26
404404 city or town, water district, fire district, municipal or quasi-municipal corporation, except, however, 27
405405 that a public waterworks or water service owned and furnished by any city, town, water district, 28
406406 fire district, or any other municipal or quasi-municipal corporation that sells water, on a wholesale 29
407407 or retail basis, inside and outside its territorial limits, shall not be construed as a public utility if it 30
408408 has fewer than one-thousand five hundred (1,500) total customer-service connections and provided 31
409409 outside sales do not exceed ten percent (10%) of the total water service connections or volumetric 32
410410 sales and provided the price charged to outside customers, per unit of water, is not greater than the 33
411411 price charged to inside customers for the same unit of water, nor to the Rhode Island public transit 34
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415415 authority, or to the production and/or distribution of steam, heat, or water by the Rhode Island port 1
416416 authority and economic development corporation in the town of North Kingstown; provided that, 2
417417 production or distribution is not utilized in the functions or operations of thermal energy networks; 3
418418 and the term “public utility” shall also mean and include the Narragansett Bay water quality 4
419419 management district commission; and provided that the ownership or operation of a facility by a 5
420420 company that dispenses alternative fuel or energy sources at retail for use as a motor vehicle fuel 6
421421 or energy source, and the dispensing of alternative fuel or energy sources at retail from such a 7
422422 facility, does not make the company a public utility within the meaning of this title solely because 8
423423 of that ownership, operation, or sale; and provided further that this exemption shall not apply to 9
424424 presently regulated public utilities that sell natural gas or are dispensers of other energy sources; 10
425425 and provided further, that the term “public utility” shall not include any company: 11
426426 (i) Producing or distributing steam or heat from a fossil-fuel-fired cogeneration plant 12
427427 located at the university of Rhode Island South Kingstown, Rhode Island; 13
428428 (ii) Producing and/or distributing thermal energy and/or electricity to a state-owned facility 14
429429 from a plant located on an adjacent site, regardless of whether steam lines cross a public highway; 15
430430 provided that, the steam lines are not utilized in the distribution or operations of thermal energy 16
431431 through thermal energy networks; and 17
432432 (iii) Providing wireless service. 18
433433 (21)(22) “Purchasing cooperatives” shall mean any association of electricity consumers 19
434434 that join for the purpose of negotiating the purchase of power from a nonregulated power producer, 20
435435 provided however, that purchasing cooperatives shall not be required to be legal entities and are 21
436436 prohibited from being engaged in the re-sale of electric power. 22
437437 (22)(23) “Railroad” means and includes every railroad other than a street railway, by 23
438438 whatsoever power, operated for public use in the conveyance in this state of persons or property 24
439439 for compensation, with all bridges, ferries, tunnels, switches, spurs, tracks, stations, wharves, and 25
440440 terminal facilities of every kind, used, operated, controlled, leased, or owned by or in connection 26
441441 with any railroad. 27
442442 (23)(24) “Retail access” means the use of transmission and distribution facilities owned by 28
443443 an electric transmission company or an electric distribution company to transport electricity sold 29
444444 by a nonregulated power producer to retail customers pursuant to § 39-1-27.3. 30
445445 (24)(25) “Street railway” means and includes every railway by whatsoever power operated 31
446446 or any extension or extensions, branch, or branches thereof, for public use in the conveyance in this 32
447447 state of persons or property for compensation, being mainly upon, along, above, or below any street, 33
448448 avenue, road, highway, bridge, or public place in any city or town, and including all switches, spurs, 34
449449
450450
451451 LC000422 - Page 13 of 21
452452 tracks, rights of trackage, subways, tunnels, stations, terminals, and terminal facilities of every kind, 1
453453 used, operated, controlled, or owned by or in connection with any street railway. 2
454454 (26) "Thermal energy", when used in this chapter, means piped non-combustible fluids 3
455455 used for transferring heat into and out of buildings for the purpose of eliminating any resultant on-4
456456 site greenhouse gas emissions of all types of heating and cooling processes, including, but not 5
457457 limited to, comfort heating and cooling, domestic hot water, and refrigeration. 6
458458 (27) "Thermal energy network", when used in this chapter, means all real estate, fixtures 7
459459 and personal property operated, owned, used or to be used for or in connection with or to facilitate 8
460460 a utility-scale distribution infrastructure project that supplies thermal energy. 9
461461 (25)(28) “Transmission facility” means plant or equipment used for the transmission of 10
462462 electricity as determined by the Federal Energy Regulatory Commission pursuant to federal law as 11
463463 of the date of the property transfers pursuant to § 39-1-27(c). 12
464464 (26)(29) “Wireless service” means communication services provided over spectrum 13
465465 licensed by or subject to the jurisdiction of the Federal Communications Commission. 14
466466 (b) Notwithstanding any provision of this section or any provision of the act entitled, “An 15
467467 Act Relating to the Utility Restructuring Act of 1996” (hereinafter “utility restructuring act”), upon 16
468468 request by the affected electric utility, the commission may exempt from the utility restructuring 17
469469 act or any provision(s) thereof, an electric utility that meets the following requirements: 18
470470 (1) The utility is not selling or distributing electricity outside of the service territory in 19
471471 effect for that utility on the date of passage of the utility restructuring act; and 20
472472 (2) The number of kilowatt hours sold or distributed annually by the utility to the public is 21
473473 less than five percent (5%) of the total kilowatt hours consumed annually by the state. Provided, 22
474474 however, that nothing contained in this section shall prevent the commission from allowing 23
475475 competition in the generation of electricity in service territories of utilities exempted in whole or in 24
476476 part from the utility restructuring act pursuant to this section, as long as such allowance of 25
477477 competition is conditioned upon payment to the exempted electric utility of a nonbypassable 26
478478 transition charge calculated to recover the elements comparable in nature to the elements in § 39-27
479479 1-27.4(b) and (c) taking into consideration any unique circumstances applicable to the exempted 28
480480 electric utility. 29
481481 39-1-3. Commission and division established — Functions of commission — 30
482482 Administrator. 31
483483 (a) To implement the legislative policy set forth in § 39-1-1 and to serve as the agencies of 32
484484 the state in effectuating the legislative purpose, there are hereby established a public utilities 33
485485 commission and a division of public utilities and carriers. The commission shall serve as a quasi-34
486486
487487
488488 LC000422 - Page 14 of 21
489489 judicial tribunal with jurisdiction, powers, and duties to implement and enforce the standards of 1
490490 conduct under § 39-1-27.6 and to hold investigations and hearings involving the rates, tariffs, tolls, 2
491491 and charges, and the sufficiency and reasonableness of facilities and accommodations of railroad, 3
492492 gas, electric distribution, thermal energy, thermal energy networks, water, telephone, telegraph, and 4
493493 pipeline public utilities; the location of railroad depots and stations, and the control of grade 5
494494 crossings; the revocation, suspension, or alteration of certificates issued pursuant to § 39-19-4; 6
495495 appeals under § 39-1-30; petitions under § 39-1-31; and proceedings under § 39-1-32. 7
496496 (b) The administrator shall be a person who is not a commissioner and who shall exercise 8
497497 the jurisdiction, supervision, powers, and duties not specifically assigned to the commission, 9
498498 including the execution of all laws relating to public utilities and carriers and all regulations and 10
499499 orders of the commission governing the conduct and charges of public utilities and who shall 11
500500 perform other duties and have powers as are hereinafter set forth. The administrator shall be a 12
501501 person who is appointed by the governor for an initial term of six (6) years. The administrator shall 13
502502 be appointed with the advice and consent of the senate. The director of administration, with the 14
503503 approval of the governor, shall allocate the administrator to one of the grades established by the 15
504504 pay plan for unclassified employees. The public utilities administrator also shall have powers and 16
505505 duties as provided in § 46-15.3-20. 17
506506 SECTION 3. Section 39-2-1.2 of the General Laws in Chapter 39-2 entitled "Duties of 18
507507 Utilities and Carriers" is hereby amended to read as follows: 19
508508 39-2-1.2. Utility base rate — Advertising, demand-side management, and renewables. 20
509509 (a) In addition to costs prohibited in § 39-1-27.4(b), no public utility distributing or 21
510510 providing heat, electricity, or water to or for the public shall include as part of its base rate any 22
511511 expenses for advertising, either direct or indirect, that promotes the use of its product or service, or 23
512512 is designed to promote the public image of the industry. No public utility may furnish support of 24
513513 any kind, direct or indirect, to any subsidiary, group, association, or individual for advertising and 25
514514 include the expense as part of its base rate. Nothing contained in this section shall be deemed as 26
515515 prohibiting the inclusion in the base rate of expenses incurred for advertising, informational or 27
516516 educational in nature, that is designed to promote public safety conservation of the public utility’s 28
517517 product or service. The public utilities commission shall promulgate such rules and regulations as 29
518518 are necessary to require public disclosure of all advertising expenses of any kind, direct or indirect, 30
519519 and to otherwise effectuate the provisions of this section. 31
520520 (b) Effective as of January 1, 2008, and for a period of twenty (20) years thereafter, each 32
521521 electric distribution company shall include a charge per kilowatt-hour delivered to fund demand-33
522522 side management programs. The 0.3 mills per kilowatt-hour delivered to fund renewable energy 34
523523
524524
525525 LC000422 - Page 15 of 21
526526 programs shall remain in effect until December 31, 2028. The electric distribution company shall 1
527527 establish and, after July 1, 2007, maintain, two (2) separate accounts, one for demand-side 2
528528 management programs (the “demand-side account”), which shall be funded by the electric demand-3
529529 side charge and administered and implemented by the distribution company, subject to the 4
530530 regulatory reviewing authority of the commission, and one for renewable energy programs, which 5
531531 shall be administered by the Rhode Island commerce corporation pursuant to § 42-64-13.2 and shall 6
532532 be held and disbursed by the distribution company as directed by the Rhode Island commerce 7
533533 corporation for the purposes of developing, promoting, and supporting renewable energy programs. 8
534534 During the time periods established in this subsection, the commission may, in its 9
535535 discretion, after notice and public hearing, increase the sums for demand-side management and 10
536536 renewable resources. In addition, the commission shall, after notice and public hearing, determine 11
537537 the appropriate charge for these programs. The office of energy resources, and/or the administrator 12
538538 of the renewable energy programs, may seek to secure for the state an equitable and reasonable 13
539539 portion of renewable energy credits or certificates created by private projects funded through those 14
540540 programs. As used in this section, “renewable energy resources” shall mean: (1) Power generation 15
541541 technologies, as defined in § 39-26-5, “eligible renewable energy resources,” including off-grid 16
542542 and on-grid generating technologies located in Rhode Island, as a priority; (2) Research and 17
543543 development activities in Rhode Island pertaining to eligible renewable energy resources and to 18
544544 other renewable energy technologies for electrical generation; or (3) Projects and activities directly 19
545545 related to implementing eligible renewable energy resources projects in Rhode Island. 20
546546 Technologies for converting solar energy for space heating or generating domestic hot water may 21
547547 also be funded through the renewable energy programs. Fuel cells may be considered an energy 22
548548 efficiency technology to be included in demand-side management programs. Special rates for low-23
549549 income customers in effect as of August 7, 1996, shall be continued, and the costs of all of these 24
550550 discounts shall be included in the distribution rates charged to all other customers. Nothing in this 25
551551 section shall be construed as prohibiting an electric distribution company from offering any special 26
552552 rates or programs for low-income customers which are not in effect as of August 7, 1996, subject 27
553553 to the approval by the commission. 28
554554 (1) The renewable energy investment programs shall be administered pursuant to rules 29
555555 established by the Rhode Island commerce corporation. Said rules shall provide transparent criteria 30
556556 to rank qualified renewable energy projects, giving consideration to: 31
557557 (i) The feasibility of project completion; 32
558558 (ii) The anticipated amount of renewable energy the project will produce; 33
559559 (iii) The potential of the project to mitigate energy costs over the life of the project; and 34
560560
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562562 LC000422 - Page 16 of 21
563563 (iv) The estimated cost per kilowatt-hour (KWh) of the energy produced from the project. 1
564564 (c) [Deleted by P.L. 2012, ch. 241, art. 4, § 14.] 2
565565 (d) The chief executive officer of the commerce corporation is authorized and may enter 3
566566 into a contract with a contractor for the cost-effective administration of the renewable energy 4
567567 programs funded by this section. A competitive bid and contract award for administration of the 5
568568 renewable energy programs may occur every three (3) years and shall include, as a condition, that 6
569569 after July 1, 2008, the account for the renewable energy programs shall be maintained and 7
570570 administered by the commerce corporation as provided for in subsection (b) of this section. 8
571571 (e) Effective January 1, 2007, and for a period of twenty-one (21) years thereafter, each 9
572572 gas distribution company shall include, with the approval of the commission, a charge per deca 10
573573 therm delivered to fund demand-side management programs (the “gas demand-side charge”), 11
574574 including, but not limited to, programs for cost-effective energy efficiency, energy conservation, 12
575575 combined heat and power systems, and weatherization services for low-income households. 13
576576 (f) Each gas company shall establish a separate account for demand-side management 14
577577 programs (the “gas demand-side account”) that shall be funded by the gas demand-side charge and 15
578578 administered and implemented by the distribution company, subject to the regulatory reviewing 16
579579 authority of the commission. The commission may establish administrative mechanisms and 17
580580 procedures that are similar to those for electric demand-side management programs administered 18
581581 under the jurisdiction of the commission and that are designed to achieve cost-effectiveness and 19
582582 high, life-time savings of efficiency measures supported by the program. 20
583583 (g) The commission may, if reasonable and feasible, except from this demand-side 21
584584 management charge: 22
585585 (1) Gas used for distribution generation; and 23
586586 (2) Gas used for the manufacturing processes, where the customer has established a self-24
587587 directed program to invest in and achieve best-effective energy efficiency in accordance with a plan 25
588588 approved by the commission and subject to periodic review and approval by the commission, which 26
589589 plan shall require annual reporting of the amount invested and the return on investments in terms 27
590590 of gas savings. 28
591591 (h) The commission may provide for the coordinated and/or integrated administration of 29
592592 electric and gas demand-side management programs in order to enhance the effectiveness of the 30
593593 programs. Such coordinated and/or integrated administration may after March 1, 2009, upon the 31
594594 recommendation of the office of energy resources, be through one or more third-party entities 32
595595 designated by the commission pursuant to a competitive selection process. 33
596596 (i) Effective January 1, 2007, the commission shall allocate, from demand-side 34
597597
598598
599599 LC000422 - Page 17 of 21
600600 management gas and electric funds authorized pursuant to this section, an amount not to exceed 1
601601 three percent (3%) of such funds on an annual basis for the retention of expert consultants, and 2
602602 reasonable administration costs of the energy efficiency and resource management council 3
603603 associated with planning, management, and evaluation of energy-efficiency programs, renewable 4
604604 energy programs, system reliability, least-cost procurement, and with regulatory proceedings, 5
605605 contested cases, and other actions pertaining to the purposes, powers, and duties of the council, 6
606606 which allocation may by mutual agreement, be used in coordination with the office of energy 7
607607 resources to support such activities. 8
608608 (j) Effective January 1, 2016, the commission shall annually allocate from the 9
609609 administrative funding amount allocated in subsection (i) from the demand-side management 10
610610 program as described in subsection (i) as follows: (1) for the energy efficiency and resource 11
611611 management council, no more than forty percent (40%) for the purposes identified in subsection (i) 12
612612 and (2) sixty percent (60%) of three percent (3%) from the demand-side management gas and 13
613613 electric funds annually to the office of energy resources for activities associated with planning, 14
614614 management, and evaluation of energy-efficiency programs, renewable energy programs, system 15
615615 reliability, least-cost procurement, and with regulatory proceedings, contested cases, and other 16
616616 actions pertaining to the purposes, powers, and duties of the office of energy resources and shall 17
617617 have exclusive authority to direct the use of the office administrative and programmatic funds. 18
618618 (k) On April 15, of each year, the office and the council shall submit to the governor, the 19
619619 president of the senate, and the speaker of the house of representatives, separate financial and 20
620620 performance reports regarding the demand-side management programs, including the specific level 21
621621 of funds that were contributed by the residential, municipal, and commercial and industrial sectors 22
622622 to the overall programs; the businesses, vendors, and institutions that received funding from 23
623623 demand-side management gas and electric funds used for the purposes in this section; and the 24
624624 businesses, vendors, and institutions that received the administrative funds for the purposes in 25
625625 subsections (i) and (j). These reports shall be posted electronically on the websites of the office of 26
626626 energy resources and the energy efficiency and resources management council. 27
627627 (l) On or after August 1, 2015, at the request of the Rhode Island infrastructure bank, each 28
628628 electric distribution company, except for the Pascoag Utility District and Block Island Power 29
629629 Company, shall remit two percent (2%) of the amount of the 2014 electric demand-side charge 30
630630 collections to the Rhode Island infrastructure bank. 31
631631 (m) On or after August 1, 2015, at the request of the Rhode Island infrastructure bank, each 32
632632 gas distribution company shall remit two percent (2%) of the amount of the 2014 gas demand-side 33
633633 charge collections to the Rhode Island infrastructure bank. 34
634634
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636636 LC000422 - Page 18 of 21
637637 (n) Effective January 1, 2022, the commission shall allocate, from demand-side 1
638638 management gas and electric funds authorized pursuant to this section, five million dollars 2
639639 ($5,000,000) of such funds on an annual basis to the Rhode Island infrastructure bank. Gas and 3
640640 electric demand-side funds transferred to the Rhode Island infrastructure bank pursuant to this 4
641641 section shall be eligible to be used in any energy efficiency, renewable energy, clean transportation, 5
642642 clean heating, energy storage, or demand-side management project financing program administered 6
643643 by the Rhode Island infrastructure bank notwithstanding any other restrictions on the use of such 7
644644 collections set forth in this chapter. The infrastructure bank shall report annually to the commission 8
645645 within ninety (90) days of the end of each calendar year how collections transferred under this 9
646646 section were utilized. 10
647647 (o) The Rhode Island office of energy resources, in coordination with the energy efficiency 11
648648 and resource management council, and following consultation with the public utilities commission 12
649649 and division of public utilities and carriers, shall issue a request for proposals for the cost-effective 13
650650 administration and implementation of statewide energy efficiency programs funded by this section 14
651651 no later than September 30, 2023. The draft request for proposals shall be reviewed through at least 15
652652 one technical session at the public utilities commission prior to issuance. Public utilities 16
653653 commission approval shall not be required. The Rhode Island office of energy resources, in 17
654654 coordination with the energy efficiency and resource management council, shall evaluate proposals 18
655655 and determine whether energy efficiency administration and implementation by the electric and gas 19
656656 distribution company or a third party is likely to achieve the most net benefits for electric and gas 20
657657 customers in Rhode Island. After January 1, 2025, the office of energy resources may, periodically, 21
658658 and at its discretion, issue additional requests for proposals for the administration and 22
659659 implementation of statewide energy efficiency programs funded through this chapter of an electric 23
660660 distribution company as defined in § 39-1-2(a)(12) or gas distribution company included as a 24
661661 public utility in § 39-1-2(a)(20) that has greater than one hundred thousand (100,000) customers. 25
662662 (1) Nothing in this chapter shall prohibit the electric and/or gas distribution company from 26
663663 submitting a proposal to administer and implement the state energy efficiency programs. 27
664664 (2) If the office of energy resources, in coordination with the energy efficiency and resource 28
665665 management council, determines that the use of a third-party administrator is likely to achieve the 29
666666 most net benefits for electric and gas customers in Rhode Island, it shall file its recommendation 30
667667 with the public utilities commission, which shall docket and rule on the matter pursuant to its 31
668668 general statutory authorization. 32
669669 (3) If the commission determines that the recommended third-party administrator is in the 33
670670 interest of Rhode Island utility customers, it shall provide for the full cost recovery for the third-34
671671
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673673 LC000422 - Page 19 of 21
674674 party administrator consistent with the terms of the approved contract, and which shall reflect the 1
675675 overall annual budget approved by the commission. The third-party administrator shall be subject 2
676676 to all the requirements set forth for the electric and gas distribution company per § 39-1-27.7. 3
677677 (4) If the commission determines that a third-party administrator will administer the state 4
678678 energy efficiency programs on or after June 1, 2024, the commission shall direct the gas and electric 5
679679 distribution company to collect and transfer the gas and electric energy efficiency funds to the third-6
680680 party administrator for the annual state energy efficiency program beginning with the program year 7
681681 and thereafter for the remaining program years. The gas and electric distribution company shall 8
682682 transfer the annual administrative funds to the office of energy resources and energy efficiency and 9
683683 resource management council. 10
684684 (5) If a third-party administrator implements the annual energy efficiency programs then 11
685685 they shall be required to develop and design the annual state energy efficiency program with the 12
686686 office of energy resources and energy efficiency and resource management council, including a 13
687687 vote by the energy efficiency and resource management council prior to the third-party 14
688688 administrator filing the annual program plan to the public utilities commission for review and a 15
689689 decision. 16
690690 (6) The third-party administrator shall file the annual state energy efficiency program plan 17
691691 to the public utilities commission for review and approval no later than September 30, 2024, and 18
692692 annually thereafter on such date. 19
693693 (7) The third-party administrator shall provide all information requested by the office of 20
694694 energy resources, energy efficiency and resource management council, division of public utilities 21
695695 and carriers, and the public utilities commission, including responses to data requests, which are 22
696696 necessary for the agencies to carry out their respective oversight roles, and shall be accountable to 23
697697 the same standards as the utility with administering and implementing energy efficiency, system 24
698698 reliability, and least-cost procurement standards and goals in accordance with § 39-1-27.7 and this 25
699699 section. 26
700700 (8) If the office does not recommend advancement of a third-party administrator, the 27
701701 electric and gas distribution company shall continue to administer statewide energy efficiency 28
702702 programs. 29
703703 (p) Effective January 1, 2026, the commission shall allocate from demand-side 30
704704 management gas funds authorized pursuant to this section sufficient funds for the purposes of 31
705705 constructing and maintaining thermal energy networks, as defined in § 39-1-2. 32
706706
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708708 LC000422 - Page 20 of 21
709709 SECTION 4. This act shall take effect upon passage. 1
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713713
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715715 LC000422 - Page 21 of 21
716716 EXPLANATION
717717 BY THE LEGISLATIVE COUNCIL
718718 OF
719719 A N A C T
720720 RELATING TO PUBLIC UTILITIES AND CARRIERS -- UTILITY THERMAL ENERGY
721721 NETWORK AND JOBS ACT
722722 ***
723723 This act would establish thermal energy networks for the purpose of creating thermal 1
724724 energy network infrastructure within this state by any public utility company that provides electric 2
725725 and natural gas distribution, in an effort to maximize cost-effective investments in thermal energy 3
726726 networks when deemed in the public interest by the public utilities commission (PUC). 4
727727 This act would take effect upon passage. 5
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729729 LC000422
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