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<title>July 2006: Rhode Island Enacts Comprehensive Energy Legislation</title>
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<p align="left"><strong><small><font face="Arial">About The Author:</font></small></strong></p>
<p align="left"><font face="Arial" style="font-size: 9pt">Robert A. Olson is a partner in the law firm of
Brown, Olson & Gould, P.C. which maintains a nationwide practice in energy law,
public utility law and related commercial transactions.</font></p>
<p><small><font face="Arial"><font style="font-size: 9pt">He can be reached at:</font><br>
<br>
<b><font color="#0000FF">Brown, Olson & Gould, PC</font></b><br>
2 Delta Drive<br>
Suite 301<br>
Concord, NH 03301<br>
<a href="mailto:[email protected]">[email protected]</a><br>
(603) 225-9716<br>
<a href="mailto:[email protected]"></a></font></small></p>
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<p ALIGN="left"><b><u><br>
<br>
July 2006</u></b><font size="6"><b><br>
</b></font></p><font size="6"><b>
<p align="left">Rhode Island Enacts Comprehensive Energy Legislation</p>
</b></font><center>
<p ALIGN="left"><font size="6"><b><br>
</b></font><strong>by Robert Olson and
</strong><b>David J. Shulock</b><strong> -- Brown, Olson and Wilson, P.C.<br>
</strong><font face="Arial" size="2">(<em>originally published by PMA OnLine Magazine:
2006</em>/10/27)<br>
</font></p>
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<p ALIGN="LEFT">On June 24, 2006, the Rhode Island General Assembly approved
a bill to comprehensively address the state’s energy needs and to reduce
consumer costs. “The Comprehensive Energy Conservation, Efficiency &
Affordability Act of 2006” is an amalgamation of eight separate pieces of
legislation introduced during the 2006 legislative session. The Act was
signed into law by Governor Donald Carcieri on June 29, 2006.</p>
<p ALIGN="LEFT">The Act addresses capacity, purchasing, energy efficiency,
and expanding assistance programs for low-income residents. It also creates
the Office of Energy Resources to implement and oversee the various
provisions of the new law. Among the goals of the Act is the creation of
stability in energy pricing through diversification of energy resources,
energy conservation, efficiency, demand management and prudent procurement
and the development of renewable energy resources. Some noted features of
the Act include the following.</p>
<p ALIGN="LEFT">The Act establishes “least cost procurement” as a principle
for meeting electrical demand and a demand side management program for
natural gas. To implement these goals, the Act charges the Rhode Island
Public Utilities Commission (the “commission”) with establishing standards
and guidelines no later than June 1, 2008 for system reliability
procurement, distributed generation, and demand response. The commission may
establish standards and/or rates for (A) qualifying distributed generation,
demand response, and renewable energy resources; (B) net metering; (C)
back-up power and/or standby rates that reasonably facilitate the
development of distributed generation; and (D) such other matters as the
commission may find necessary or appropriate. The standards and guidelines
adopted by the commission are subject to review not less frequent than every
three years.</p>
<p ALIGN="LEFT">The Act requires each electrical distribution company to
submit a plan for system reliability, energy efficiency and conservation
procurement to the commission on or before September 1, 2008, and
triennially on or before September 1, thereafter through September 1, 2017.
In addition, each electrical distribution company must also provide a status
report on the implementation of least cost procurement on or before December
15, 2008 and on or before February 1, 2009. The report must include the
targets for each energy resource, including the achieved percentages for
efficiency, distributed generation, demand response, combined heat and
power, and renewables.</p>
<p ALIGN="LEFT">No later than March 1, 2009, and each March 1 thereafter
though March 1, 2018, each electric distribution company must also submit a
proposed procurement plan or plans to the commission consistent with the
purposes of least-cost procurement. The supply procurement plan(s) must
include the acquisition procedure, the pricing options sought, and a
proposed term of service for which standard offer service will be acquired.
The term of service may be of various, staggered term lengths and
acquisitions may occur from time to time. There also may be separate
procurement plans for residential and non-residential classes or separate
plans among 2 nonresidential classes. All the components of the procurement
plans will be subject to commission review and approval.</p>
<p ALIGN="LEFT">The Act encourages electrical system reliability by
promoting diversification of fuel sources, distributed generation, and
demand response usage reductions and/or deployment of distributed generation
capacity. According to a statement by the general assembly, this is to guard
against brownouts and rolling blackouts.</p>
<p ALIGN="LEFT">The Act also establishes a renewable energy development fund
for the purpose of increasing the supply of NE-GIS certificates. This fund
is to be administered by the Rhode Island Economic Development Corporation
and is to have a board of trustees to oversee the program. The board of
trustees is charged with (1) developing plans and guidelines for the
management and use of the fund; and (2) evaluating proposals and/or actions
to obligate, use and/or sell, dispose,trade or exchange assets held by the
fund.</p>
<p ALIGN="LEFT">The uses of the fund include: (1) stimulating investment in
renewable energy, including multi-year agreements for renewable energy
certificates; and (2) issuing assurances and/ or guarantees to support the
acquisition of renewable energy certificates and/or the development of
renewable energy sources for the state. NE-GIS certificates acquired through
the fund may be conveyed to obligated entities or may be credited against
the renewable energy standard for the year of the certificate provided that
the commission assesses the cost of the certificates to the entities
benefiting from the credit.</p>
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<blockquote>
<p align="left"><font face="Arial">
<small>Robert A. Olson is a partner in the law firm of Brown, Olson &
Gould P.C.
which maintains a nationwide practice in energy law, public utility law and related
commercial transactions. He can be reached at:</small></font><p align="center">
<font face="Arial"><small><font color="#0000FF"><b>Brown, Olson & Gould, PC</b></font><br>
2 Delta Drive, Suite 301<br>
Concord, NH 03301 <br>
<br>
<a href="mailto:[email protected]">[email protected]</a> | (603) 225-9716<a href="mailto:[email protected]"></a></small></font>
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