§ 39-26-6 Duties of the commission. – The commission shall:
(a) Develop and adopt regulations on or before December 31, 2005, for implementing a renewable energy standard, which regulations shall include, but be limited to, provisions for:
(1) Verifying the eligibility of renewable energy generators and the production of energy from such generators, including requirements to notify the commission in the event of a change in a generator's eligibility status.
(2) Standards for contracts and procurement plans for renewable energy resources, to achieve the purposes of this chapter.
(3) Flexibility mechanisms for the purposes of easing compliance burdens, facilitating bringing new renewable resources on-line, and avoiding and/or mitigating conflicts with state level source disclosure requirements and green marketing claims throughout the region; which flexibility mechanisms shall allow obligated entities to: (i) demonstrate compliance over a compliance year; (ii) bank excess compliance for two (2) subsequent compliance years, capped at thirty percent (30%) of the current year's obligation; and (iii) allow renewable energy generated during 2006 to be banked by an obligated entity as early compliance, usable towards meeting an obligated entity's 2007 requirement. Generation used for early compliance must result in the retirement of NE-GIS certificate in a reserved certificate account designated for such purposes.
(4) Annual compliance filings to be made by all obligated entities within one month after NE-GIS reports are available for the fourth (4th) quarter of each calendar year. All electric utility distribution companies shall cooperate with the commission in providing data necessary to assess the magnitude of obligation and verify the compliance of all obligated entities.
(b) Authorize rate recovery by electric utility distribution companies of all prudent incremental costs arising from the implementation of this chapter, including, without limitation, the purchase of NE-GIS certificates, the payment of alternative compliance payments, required payments to support the NE-GIS, assessments made pursuant to § 39-26-7(c) and the incremental costs of complying with energy source disclosure requirements.
(c) Certify eligible renewable energy resources by issuing statements of qualification within ninety (90) days of application. The commission shall provide prospective reviews for applicants seeking to determine whether a facility would be eligible.
(d) Determine, on or before January 1, 2010, the adequacy, or potential adequacy, of renewable energy supplies to meet the increase in the percentage requirement of energy from renewable energy resources to go into effect in 2011 and determine on or before January 1, 2014, the adequacy or potential adequacy, of renewable energy supplies to meet the increase in the percentage requirement of energy from renewable energy resources to go into effect in 2015. In making such determinations the commission shall consider among other factors the historical use of alternative compliance payments in Rhode Island and other states in the NEPOOL region. In the event that the commission determines an inadequacy or potential inadequacy of supplies for scheduled percentage increases, the commission shall delay the implementation of the scheduled percentage increase for a period of one year or recommend to the general assembly a revised schedule of percentage increases, if any, to achieve the purposes of this chapter.
(e) Establish sanctions for those obligated entities that after investigation have been found to fail to reasonably comply with the commission's regulations. No sanction or penalty shall relieve or diminish an obligated entity from liability for fulfilling any shortfall in its compliance obligation; provided, however, that no sanction shall be imposed if compliance is achieved through alternative compliance payments. The commission may suspend or revoke the certification of generation units, certified in accordance with subsection (c) above, that are found to provide false information, or that fail to notify the commission in the event of a change in eligibility status or otherwise comply with its rules. Financial penalties resulting from sanctions from obligated entities shall not be recoverable in rates.
(f) Report, by February 15, 2006, and by February 15 each year thereafter, to the governor, the speaker of the house and the president of the senate on the status of the implementation of the renewable energy standards in Rhode Island and other states, and which report shall include in 2009, and each year thereafter, the level of use of renewable energy certificates by eligible renewable energy resources and the portion of renewable energy standards met through alternative compliance payments, and the amount of rate increases authorized pursuant to subsection (b) above.
(g) Implement the following changes regarding distributed generation from renewable energy systems by June 1, 2009.
(1) Increase the maximum allowable distributed generation capacity for eligible net-metered energy systems to 1.65 megawatts (MW); except that for eligible net-metered renewable energy systems developed but not owned by cities and towns, located on city or town owned land, and providing power solely to the city or town that the project is located in, increase said maximum to 2.25 megawatts; and except that for eligible net-metered renewable energy systems owned by cities and towns of Rhode Island, the Narragansett Bay Commission and state agencies, increase said maximum to 3.5 megawatts (MW).
(2) Increase the aggregate amount of net metering to a maximum of two percent (2%) of peak load, provided that at least one megawatt is reserved for projects less than twenty-five (25) kW.
(3) With the exception of those customers described in subsection (ii), if the electricity generated by the renewable generation facility during a billing period exceeds the customer's kilowatt-hour usage during the billing period, the customer shall upon a request of the customer be billed for zero kilowatt-hour usage and the excess renewable generation credits shall be credited to the customer's account for the following billing period. Unless otherwise requested by the customer, the customer shall be compensated monthly by a check from the electric distribution company for the excess renewable generation credits pursuant to the rate specified in subdivision 39-26-2(22).
(ii) If the electricity generated by the renewable generation facility owned by a Rhode Island city or town, educational institution, nonprofit affordable housing, farm, the state or the Narragansett Bay Commission, during a billing period exceeds the customer's kilowatt-hour usage during the billing period, the customer shall be billed for zero-kilowatt-hour usage, and:
(A) Upon request of the customer, the excess renewable generation credits shall be credited to the customer's account for the following billing period; or
(B) Upon request of the customer, the excess renewable generation credits shall be applied to no more than ten (10) other accounts owned by the customer during the billing period; or
(C) Unless otherwise requested by the customer, the customer shall be compensated monthly by a check from the distribution company for the excess renewable generation credits pursuant to the rates specified in subdivisions 39-26-2(19) and 39-26-2(22).
(iii) Nonprofit affordable housing shall use said compensation, pursuant to paragraph (ii), to benefit the residents of the housing development.
(4) If the customer's kilowatt-hour usage exceeds the electricity generated by the renewable generation facility during the billing period, the customer shall be billed for the net kilowatt-hour usage at the applicable rate. Any excess credits may be carried forward month to month for twelve (12) month periods as established by the commission. At the end of the applicable twelve (12) month period, if there are unused excess credits on the net metering customer accounts, such credits shall be used to offset recoverable utility costs. Where compensation has been provided for excess renewable generation credits, no further charge may be made to the customer against said credits.
(h) Any prudent and reasonable costs incurred by the electric distribution company pursuant to achieving compliance with subsection (g) and the annual amount of the distribution component of any renewable generation credits provided to net metering customers shall be aggregated by the distribution company and billed to all customers on an annual basis through a uniform per kilowatt-hour surcharge embedded in the distribution component of the rates reflected on customer bills.
(i) Report, by July 1, 2010 to the governor, the speaker of the house and the president of the senate on the status of the implementation of subsection (g) and (h), including if said provisions are optimally cost-effective, reliable, prudent and environmentally responsible.
(j) Consistent with the public policy objective of developing renewable generation as an option in Rhode Island, the electric distribution company is authorized to propose and implement pilot programs to own and operate no more than fifteen megawatts (15MW) of renewable generation demonstration projects in Rhode Island and include the costs and benefits in rates to distribution customers. At least two (2) demonstration projects shall include renewable generation installed at or in the vicinity of nonprofit affordable housing projects where energy savings benefits are provided to reduce electric bills of the customers at the nonprofit affordable housing projects. Any renewable generation proposals shall be subject to the review and approval of the commission. The commission shall annually make an adjustment to the minimum amounts required under the renewable energy standard under chapter 39-26 in an amount equal to the kilowatt hours generated by such units owned by the electric distribution company. The electric and gas distribution company shall also be authorized to propose and implement smart metering and smart grid demonstration projects in Rhode Island, subject to the review and approval of the commission, in order to determine the effectiveness of such new technologies for reducing and managing energy consumption, and include the costs of such demonstration projects in distribution rates to electric customers to the extent the project pertains to electricity usage and in distribution rates to gas customers to the extent the project pertains to gas usage.