§ 39-1-27.7 - System reliability and least-cost procurement.
SECTION 39-1-27.7
§ 39-1-27.7 System reliability andleast-cost procurement. – Least-cost procurement shall comprise system reliability and energy efficiencyand conservation procurement as provided for in this section and supplyprocurement as provided for in § 39-1-27.8, as complementary but distinctactivities that have as common purpose meeting electrical energy needs in RhodeIsland, in a manner that is optimally cost-effective, reliable, prudent andenvironmentally responsible.
(a) The commission shall establish not later than June 1,2008, standards for system reliability and energy efficiency and conservationprocurement, which shall include standards and guidelines for:
(1) System reliability procurement, including but not limitedto:
(i) Procurement of energy supply from diverse sources,including, but not limited to, renewable energy resources as defined in chapter26 of this title;
(ii) Distributed generation, including, but not limited to,renewable energy resources and thermally leading combined heat and powersystems, which is reliable and is cost-effective, with measurable, net systembenefits;
(iii) Demand response, including, but not limited to,distributed generation, back-up generation and on-demand usage reduction, whichshall be designed to facilitate electric customer participation in regionaldemand response programs, including those administered by the independentservice operator of New England ("ISO-NE") and/or are designed to provide localsystem reliability benefits through load control or using on-site generatingcapability;
(iv) To effectuate the purposes of this division, thecommission may establish standards and/or rates (A) for qualifying distributedgeneration, demand response, and renewable energy resources, (B) fornet-metering, (C) for back-up power and/or standby rates that reasonablyfacilitate the development of distributed generation, and (D) for such othermatters as the commission may find necessary or appropriate.
(2) Least-cost procurement, which shall include procurementof energy efficiency and energy conservation measures that are prudent andreliable and when such measures are lower cost than acquisition of additionalsupply, including supply for periods of high demand.
(b) The standards and guidelines provided for by subsection(a) shall be subject to periodic review and as appropriate amendment by thecommission, which review will be conducted not less frequently than every three(3) years after the adoption of the standards and guidelines.
(c) To implement the provisions of this section:
(1) The commissioner of the office of energy resources andthe energy efficiency and resources management council, either or jointly orseparately, shall provide the commission findings and recommendations withregard to system reliability and energy efficiency and conservation procurementon or before March 1, 2008, and triennially on or before March 1, thereafterthrough March 1, 2017.
(2) The commission shall issue standards not later than June1, 2008, with regard to plans for system reliability and energy efficiency andconservation procurement, which standards may be amended or revised by thecommission as necessary and/or appropriate.
(3) The energy efficiency and resources management councilshall prepare by July 15, 2008, a reliability and efficiency procurementopportunity report which shall identify opportunities to procure efficiency,distributed generation, demand response and renewables, which report shall besubmitted to the electrical distribution company, the commission, the office ofenergy resources and the joint committee on energy.
(4) Each electrical distribution company shall submit to thecommission on or before September 1, 2008, and triennially on or beforeSeptember 1, thereafter through September 1, 2017, a plan for systemreliability and energy efficiency and conservation procurement. In developingthe plan, the distribution company may seek the advice of the commissioner andthe council. The plan shall include measurable goals and target percentages foreach energy resource, pursuant to standards established by the commission,including efficiency, distributed generation, demand response, combined heatand power, and renewables.
(5) The commission shall issue an order with regard to theplan from the electrical distribution company not greater than sixty (60) daysafter it is filed with the commission.
(6) Each electrical distribution company shall provide astatus report, which shall be public, on the implementation of least costprocurement on or before December 15, 2008, and on or before February 1, 2009,to the commission, the division, the commissioner of the office of energyresources and the energy efficiency and resources management council which mayprovide the distribution company recommendations with regard to effectiveimplementation of least cost procurement. The report shall include the targetsfor each energy resource included in the order approving the plan and theachieved percentage for energy resource, including the achieved percentages forefficiency, distributed generation, demand response, combined heat and power,and renewables.
(d) If the commission shall determine that the implementationof system reliability and energy efficiency and conservation procurement hascaused or is likely to cause under or over-recovery of overhead and fixed costsof the company implementing said procurement, the commission may establish amandatory rate adjustment clause for the company so affected in order toprovide for full recovery of reasonable and prudent overhead and fixed costs.
(e) The commission shall conduct a contested case proceedingto establish a performance based incentive plan which allows for additionalcompensation for each electric distribution company and each company providinggas to end-users and/or retail customers based on the level of its success inmitigating the cost and variability of electric and gas services throughprocurement portfolios.