Rhode Island Utility Restructuring Legislation
CHAPTER 316
96-H 8124B
Approved Aug. 7, 1996.
AN ACT RELATING TO THE UTILITY RESTRUCTURING ACT OF 1996
It is enacted by the General Assembly as follows:
SECTION 1. The following sections of Title 39 of the General Laws
are amended, added thereto
or deleted as follows:
39-1-1. Declaration of policy -- Purposes. -- (a) The general assembly
finds and therefore
declares that:
(1) The businesses of generating and distributing electrical energy,
producing and transporting manufactured and natural gas, operating
water works and furnishing supplies of water for domestic, industrial,
and commercial use, offering to the public transportation of persons
and property, furnishing and servicing telephonic and wireless audio
and visual communication systems, and operation of community antenna
television systems are affected with a public interest;
(2) Supervision and reasonable regulation by the state of the manner
in which such businesses construct their systems and carry on their
operations within the state are necessary to protect and promote
the convenience, health, comfort, safety, accommodation, and welfare
of the people, and are a proper exercise of the police power of
the state;
(3) Preservation of the state's resources, commerce, and industry
requires the assurance of adequate public transportation and communication
facilities, water supplies, and an abundance of energy, all supplied
to the people with reliability, at economical cost, and with due
regard for the preservation and enhancement of the environment,
the conservation of natural resources, including scenic, historic,
and recreational assets, and the strengthening of long-range, land-use
planning.
(b) It is hereby declared to be the policy of the state to provide
fair regulation of public utilities and carriers in the interest
of the public, to promote availability of adequate, efficient and
economical energy, communication, and transportation services and
water supplies to the inhabitants of the state, to provide just
and reasonable rates and charges for such services and supplies,
without unjust discrimination, undue preferences or advantages,
or unfair or destructive competitive practices, and to co-operate
with other states and agencies of the federal government in promoting
and coordinating efforts to achieve realization of this policy.
(c) To this end, there is hereby vested in the public utilities
commission and the division of public utilities and carriers the
exclusive power and authority to supervise, regulate, and make orders
governing the conduct of companies offering to the public in intrastate
commerce energy, communication, and transportation services and
water supplies for the purpose of increasing and maintaining the
efficiency of the companies, according desirable safeguards and
convenience to their employees and to the public, and protecting
them and the public against improper and unreasonable rates, tolls,
and charges by providing full, fair, and adequate administrative
procedures and remedies, and by securing a judicial review to any
party aggrieved by such an administrative proceeding or ruling.
{ADD (d) The legislature also finds and declares the following:
(1) that lower retail electricity rates would promote the state's
economy and the health and general welfare of the citizens of Rhode
Island;
(2) that current research and experience indicates that greater
competition in the electricity industry would result in a decrease
in electricity rates over time;
(3) that greater competition in the electricity industry would stimulate
economic growth;
(4) that it is in the public interest to promote competition in
the electricity industry and to establish performance based ratemaking
for regulated utilities;
(5) that in connection with the transition to a more competitive
electric utility industry, public utilities should have a reasonable
opportunity to recover transitional costs associated with commitments
prudently incurred in the past pursuant to their legal obligations
to provide reliable electric service at reasonable costs;
(6) that it shall be the policy of the state to encourage, through
all feasible means and measures, states where fossil-fueled electric
generating units producing air emissions affecting Rhode Island
air quality are located to reduce such emissions over time to levels
that enable cost effective attainment of environmental standards
within Rhode Island;
(7) that in a restructured electrical industry the same protections
currently afforded to low income customers shall continue. ADD}
39-1-2. Definitions. -- Terms used in this title shall be construed
as follows, unless another meaning is expressed or is clearly apparent
from the language or context.
(1) "Commission" means the public utilities commission;
(2) "Commissioner" means a member of the public utilities
commission;
(3) "Chairperson" means the chairperson of the public
utilities commission;
(4) "Division" means the division of public utilities
and carriers{ADD . ADD}
(5) "Administrator" means the administrator and chief
executive officer of the division of public utilities and carriers{ADD
. ADD}
(6) "Company" means and includes a person, firm, partnership,
corporation, {ADD quasi-municipal corporation, ADD} association,
joint stock association or company, and his, her, its, or their
lessees, trustees or receivers appointed by any court;
(7) "Public utility" means and includes every company
{ADD that is an electric distribution company and every company
ADD} operating or doing business in intrastate commerce and in this
state as a railroad, street railway, common carrier, gas, liquefied
natural gas, electric, water, telephone, telegraph, and pipeline
company, and every company owning, leasing, maintaining, managing,
or controlling any plant or equipment or any part of any plant or
equipment within this state for generating, manufacturing, producing,
transmitting, distributing, delivering, or furnishing natural or
manufactured gas, steam, electrical or nuclear energy, heat, light
or power, directly or indirectly to or for the public, or any cars
or equipment employed on or in connection with any railroad or street
railway for public or general use within this state, or any pipes,
mains, poles, wires, conduits, fixtures, through, over, across,
under, or along any public highways, parkways or streets, public
lands, waters, or parks for the transmission, transportation, or
distribution of gas or electric current for sale to the public for
light, heat, cooling or power for providing audio or visual telephonic
or telegraphic communication service within this state or any pond,
lake, reservoir, stream, well or distributing plant or system employed
for the distribution of water to the consuming public within this
state including the water supply board of the city of Providence;
provided, that, except as provided in section 39-16-9 and in chapter
2072 of the public laws, 1933, as amended, this definition shall
not be construed to apply to any public waterworks or water service
owned and furnished by any city, town, water district, fire district,
or any other municipal or quasi-municipal corporation, excepting
the water supply board of the city of Providence, unless any city,
town, water district, fire district, municipal or quasi-municipal
corporation obtains water from a source owned or leased by the water
resources board, either directly or indirectly, or obtains a loan
from the board pursuant to the provisions of chapter 15 of title
46, or sells water, on a wholesale or retail basis, inside and outside
the territorial limits of the city or town, water district, fire
district, municipal or quasi-municipal corporation, except, however,
that a public waterworks or water service owned and furnished by
any city, town, water district, fire district, or any other municipal
or quasi-municipal corporation which sells water, on a wholesale
or retail basis, inside and outside its territorial limits shall
not be construed as a public utility if it has fewer than 1500 total
customer service connections and provided outside sales do not exceed
ten (10) percent of the total water service connections or volumetric
sales and provided the price charged to outside
customers, per unit of water, is not greater than the price charged
to inside customers for the same unit of water, nor to the Rhode
Island public transit authority, or to the production and/or distribution
of steam, heat, or water by Rhode Island port authority and economic
development corporation in the town of North Kingstown; and the
term "public utility" shall also mean and include the
Narragansett Bay water quality management district commission; and
provided that the ownership or operation of a facility by a company
which dispenses alternative fuel or energy sources at retail for
use as a motor vehicle fuel or energy source, and the dispensing
of alternative fuel or energy sources at retail from such a facility,
does not make the company a public utility within the meaning of
this title solely because of that ownership, operation, or sale;
and provided further that this exemption shall not apply to presently
regulated public utilities which sell natural gas or are dispensers
of other energy sources; and provided further, that the term "public
utility" shall not include any company;
(i) producing or distributing steam or heat from a fossil fuel fired
cogeneration plant located at the university of Rhode Island in
South Kingstown, Rhode Island, and
(ii) producing and/or distributing thermal energy and/or electricity
to a state owned facility from a plant located on an adjacent site
regardless of whether distribution {ADD steam ADD} lines cross a
public highway.
{ADD (7.1) "Nonregulated power producer" shall mean a
company engaging in the business of producing, manufacturing, generating,
buying, aggregating, marketing or brokering electricity for sale
at wholesale or for retail sale to the public. A nonregulated power
producer shall not be subject to regulation as a public utility
except as specifically provided in the general laws.
(7.2) "Electric transmission company" shall mean a company
engaging in the transmission of electricity or owning, operating,
or controlling transmission facilities. An electric transmission
company shall not be subject to regulation as a public utility except
as specifically provided in the general laws, but shall be regulated
by the Federal Energy Regulatory Commission and shall provide transmission
service to all nonregulated power producers and customers, whether
affiliated or not, on comparable, nondiscriminatory prices and terms.
Electric transmission companies shall have the power of eminent
domain exercisable following a petition to the commission pursuant
to section 39-1-31.
(7.3) "Electric distribution company" shall mean a company
engaging in the distribution of electricity or owning, operating,
or controlling distribution facilities and shall be a public utility
pursuant to section 39-1-2(7).
(7.4) "Transmission facility" shall mean plant or equipment
used for the transmission of electricity as determined by the Federal
Energy Regulatory Commission pursuant to federal law as of the date
of the property transfers pursuant to section 39-1-27(c).
(7.5) "Distribution facility" shall mean plant or equipment
used for the distribution of electricity and which is not a transmission
facility.
(7.6) "Retail access" shall mean the use of transmission
and distribution facilities owned by an electric transmission company
or an electric distribution company to transport electricity sold
by a nonregulated power producer to retail customers pursuant to
section 39-1-27.3.
(7.7) "Manufacturing customers" shall mean all customers
that have on file with an electric distribution company a valid
certificate of exemption from the Rhode Island sales tax indicating
the customer's status as a manufacturer pursuant to section 44-18-30.
(7.8) "Customer" shall mean a company taking service from
an electric distribution company at a single point of delivery or
meter location. ADD}
(8) "Common carrier", except when used in chapters 12,
13 and 14 of this title, means and includes all carriers for hire
or compensation including railroads, street railways, express, freight
and freight line companies, dining car companies, steam boat, motor
boat, power boat, hydrofoil, and ferry companies and all other companies
operating any agency or facility for public use in this conveyance
over fixed route, or between fixed termini within this state or
persons or property by or by a combination of land, air, or water;
(9) "Charter carrier" means and includes all carriers
for hire or compensation within this state not included in the definition
of common carrier;
(10) "Railroad" means and includes every railroad other
than a street railway, by whatsoever power operated for public use
in the conveyance in this state of persons or property for compensation,
with all bridges, ferries, tunnels, switches, spurs, tracks, stations,
wharves, and terminal facilities of every kind, used, operated,
controlled, leased, or owned by or in connection with any railroad;
(11) "Street railway" means and includes every railway
by whatsoever power operated or any extension or extensions, branch,
or branches thereof, for public use in the conveyance in this state
of persons or property for compensation, being mainly upon, along,
above, or below any street, avenue, road, highway, bridge, or public
place in any city or town, and including all switches, spurs, tracks,
rights of trackage, subways, tunnels, stations, terminals and terminal
facilities of every kind, used, operated, controlled, or owned by
or in connection with any street railway;
(12) "Airport" and "landing field" mean and
include all airports and landing fields other than those owned by
the state;
(13) "Plant" and "equipment" mean and include
all real estate, easements, rights therein and appurtenances thereunto
belonging, buildings, tracks, pipes, mains, poles, wires, and other
fixed or stationary construction and equipment, machinery, apparatus,
devices, rolling stock, and tangible property of whatsoever kind
and nature and wherever located, used, controlled, operated, leased,
or owned by a public utility in the conduct of its business;
(14) "Liquefied natural gas" means a fluid in the liquid
state composed predominantly of methane and which may contain minor
quantities of ethane, propane, nitrogen, or other components normally
found in natural gas;
(15) "Natural gas" means the combustible gaseous mixture
of low-molecular-weight, paraffin hydrocarbons, generated below
the surface of the earth containing mostly methane and ethane with
small amounts of propane, butane, and hydrocarbons, and sometimes
nitrogen, carbon dioxide, hydrogen sulfide, and helium;
(16) "Nonprofit housing development corporation" means
a nonprofit corporation, which has been approved as a section 501(c)(3)
26 U.S.C. section 501(c)(3)! corporation by the Internal Revenue
Service, and which is organized and operated primarily for the purpose
of providing housing for low and moderate income persons;
(17) "Motor carriers" means any carrier regulated by the
administrator pursuant to chapters 3, 11, 12, 13 and 14 of this
title.
{ADD (18) "Purchasing cooperatives" shall mean any association
of electricity consumers which join for the purpose of negotiating
the purchase of power from a nonregulated power producer, provided
however, that purchasing cooperatives shall not be required to be
legal entities and are prohibited from being engaged in the re-sale
of electric power. ADD}
39-1-3. Commission and division established -- Functions of commission
-- Administrator. -- {ADD (a) ADD} To implement the legislative
policy set forth in section 39-1-1 and to serve as the agencies
of the state in effectuating the legislative purpose, there are
hereby established a public utilities commission and a division
of public utilities and carriers. The commission shall serve as
a quasi-judicial tribunal with jurisdiction, powers, and duties
{ADD to implement and enforce the standards of conduct under section
39-1-27.6 and ADD} to hold investigations and hearingss and
accommodations of railroad, gas, electric {ADD distribution ADD}
, water, telephone, telegraph, and pipeline public utilities, the
location of railroad depots and stations, and the control of grade
crossings, the revocation, suspension, or alteration of certificates
issued pursuant to section
39-19-4, appeals under section 39-1-30, petitions under section
39-1-31, and proceedings under
section 39-1-32.
{ADD (b) ADD} The administrator shall {ADD be a person who is not
a commissioner and who
shall ADD} exercise the jurisdiction, supervision, powers, and duties
not specifically assigned to
the commission . {ADD , including the execution of all laws relating
to public utilities and carriers
and all regulations and orders of the commission governing the conduct
and charges of public
utilities and who shall perform such other duties and have such
powers as are hereinafter set forth.
The administrator shall be a person who is appointed by the Governor
for an initial term of six (6)
years. The administrator shall be appointed with the advice and
consent of the senate. The director
of administration, with the approval of the governor, shall allocate
the administrator to one of the
grades established by the pay plan for unclassified employees. ADD}
By virtue of his or her office,
the chairperson of the public utilities commission shall be the
public utilities administrator who shall
supervise and direct the execution of all laws relating to public
utilities and carriers and all
regulations and orders of the commission governing the conduct and
charges of public utilities, and
who shall perform such other duties and have such powers as are
hereinafter set forth. The public
utilities administrator also shall have such powers and duties as
provided in section 46-15.4-15.
39-1-5. Removal of commissioner from office. -- A Commissioner{ADD
s ADD} may at any
time be removed from office by the governor for inefficiency, neglect
of duty, or malfeasance in
office, but no commissioner shall be removed from office without
an opportunity to be heard,
publicly before the governor {ADD and ADD} after being given notice
in writing of the charges
against him or her. A copy of the charges and a transcript of the
record of the hearing shall be filed
with the secretary of state.
39-1-6. Holding over in office. -- When the term of office of a
commissioner shall expire, and he
or she has participated in hearing all or a substantial part of
the evidence in a proceeding pending
before the commission, he shall remain a commissioner for the sole
purpose of completing the
hearing and deciding the matter so pending and signing the findings,
orders and judgments therein.
For such services he or she {ADD the commissioner ADD} shall be
paid reasonable
compensation and necessary expenses as fixed by the commission as
composed following the
expiration of his or her term of office. For this purpose a proceeding
shall be deemed completed
when the commission enters its final order therein regardless of
whether such order is or may be
appealed to the supreme court and the case remanded to the commission
for further proceedings.
39-1-7. Powers of commission -- Seal. -- (a) The commission shall
have the powers of a court
of record in the determination and adjudication of all matters over
which it is given jurisdiction. It
may make orders and render judgments and enforce the same by any
suitable process issuable by
the superior court. The commission shall have an official seal,
which shall have engraved thereon
the words "State of Rhode Island and Providence Plantations.
Public Utilities Commission Seal".
(b) The commission shall have the power to do a complete audit of
the books of all public utilities
doing business in this state including any foreign companies selling
power to electric companies in
this state . The audit shall consider the cost of energy acquisition
and all other aspects which the
commission deems necessary.
39-1-12. Pre-hearing procedure -- Formulating issues -- Copies of
exhibits. -- Prior to the
commencement of any formal hearing, the commission may in its discretion
direct the parties or
their attorneys to appear before it for a conference. At or before
the conference, the commission
may order any party to file a number of copies, not exceeding ten
(10) {ADD as it may specify
ADD} , of all exhibits it intends to use in the hearing, and the
names and addresses of witnesses it
intends to produce in its direct case, together with a short statement
of the purposes of each exhibit
and of the testimony of each witness. After entry of an order, a
party shall not be permitted, except
in the discretion of the commission, to introduce into evidence,
in its direct case, exhibits which are
not filed in accordance with the order. At the conference the commission
may designate a date
before which it requires any party in interest to specify what items
shown by the filed exhibits are
conceded, and further proof of conceded items shall not be required.
The commission may also
require the parties to simplify the issues, to consider admissions
of fact and of documents which
will avoid unnecessary proof, and to limit the number of expert
witnesses. The commission shall
enter an order reciting the concessions and agreements made by the
parties, and unless modified at
the hearing to prevent manifest injustice, the hearing shall be
controlled by the order.
39-1-18. Hearings and records -- Certified copies. -- All hearings
and orders of the
commission and of the division, and the records thereof, shall be
public {ADD and as such, any
person shall be permitted to record all or any portion of a hearing
by way of camera, video or tape
recorder of any kind, unless a party to the hearing requests, and
the chairperson or administrator
grants the request, that such recording be prohibited for the protection
of attorney-client privilege,
confidentiality or other interest of the parties ADD} . All reports,
records, files, books, and
accounts in the possession of the commission or the division shall
be open to inspection by the
public at all reasonable times. The division may charge and collect
reasonable fees for copies of
official documents, orders, papers, and records, and for authenticating
or certifying the same;
provided, that no fee shall be charged for single copies of official
documents, orders, papers, and
records, furnished to public officers of the state for use in their
official capacity, nor for the annual
reports in the ordinary course of distribution.
39-1-23. Administrative expenses -- Assessment against utilities.
-- (a) The administrator
shall determine {ADD aggregate ADD} the expenses of the commission
and of the division,
including expenses incurred by the attorney general pursuant to
section 39-1-19, {ADD and
expenses incurred by the commission ADD} for each upcoming fiscal
year and shall apportion and
assess these expenses among the state's regulated utilities . {ADD
based upon approved budgets.
When submitting the budget, the budget office shall clearly indicate
the revenues from assessments.
ADD} Included within this prospective assessment shall be those
expenses expected to be
incurred by the attorney general pursuant to section 39-1-19 for
the upcoming fiscal year. The
expenses anticipated by the attorney general {ADD and the commission
ADD} for each upcoming
fiscal year shall be communicated to the administrator within thirty
(30) days of request by the
administrator. The administrator shall thereupon apportion and assess
one hundred percent
(100%) of such expenses among the several public utility companies
and common carriers located
in this state in the proportion that the gross intrastate utility
operating revenues of each public utility
company and common carrier shall bear to the total gross intrastate
utility operating revenues for
the last preceding fiscal year of all public utility companies and
common carriers; provided,
however, that any public utility or common carrier whose gross intrastate
revenues in any fiscal
year as reported to the administrator do not exceed one hundred
thousand dollars ($100,000),
shall not be subject to the assessment under the provisions hereof;
and, provided further, that all
motor carriers subject to the provisions of chapter 12 of this title
shall not be subject to the
assessment under the provisions hereof. The sum so apportioned and
assessed shall be in addition
to any taxes payable to the state under any other provision of law.
{ADD The assessments shall
be divided between the commission and the division based upon the
approved budgets. ADD}
(b) The administrator shall apply any budgetary balance or shortfalls
remaining from a prior annual
assessment toward the next upcoming fiscal year assessment {ADD
to the division or the
commission as appropriate ADD} .
(c) Upon collection from the several public utility companies and
common carriers operating in this
state, assessments {ADD and any state appropriations ADD} shall
be deposited in a newly
created special fund {ADD an account ADD} to be known as the Public
Utilities Commission
Funding Account , which shall also consist of such sums as the state
may from time to time
appropriate. {ADD . ADD} This fund shall not be a part of the general
fund of the state, {ADD
restricted receipt account and ADD} but shall be kept by the general
treasurer separately and shall
be paid out by the general treasurer only upon receipt of properly
authenticated vouchers signed
by the administrator or his or her designee without the necessity
of appropriation or
reappropriation by the general assembly. {ADD for the division's
share of the account. ADD}
{ADD The same procedure shall be followed for the commission except
that such vouchers shall
be signed by the commission chairperson or his or her designee.
The general treasurer shall
provide for separate accounting of the division and commission budget
and expenses. ADD} The
moneys in said fund shall be expended by the administrator {ADD
or the commission, as
appropriate ADD} for meeting the expenses of the operation of the
commission, the division and
those expenses incurred by the attorney general, pursuant to section
39-1-19.
{ADD (d) The legislature may appropriate from the general fund such
sums as are necessary for
the regulation of public utilities. ADD}
39-1-26. Public utilities reserve fund created -- Appropriations
-- Recovery of expenses
from utility companies. -- (a) There is hereby created a fund to
be known as the public utilities
reserve account, an account within the public utilities commission
in the general fund. Such
account, hereinafter referred to as the "fund", shall
be used for the purpose of providing the
financial means for the commission and division to purchase materials,
and to employ on a contract
or other basis, legal counsel, official stenographers, engineers,
accountants, economists and other
expert witnesses, and for other necessary expenses of the commission
and division in investigations
and hearings related to applications and filings made by public
utilities, or commission or division
initiated investigations into utility operating practices, or appeals
to federal courts. The general
assembly shall annually appropriate to the fund a sum equal to twenty-five
one thousandths of one
percent (.00025%) of the gross annual operating revenues of gas,
electric, and telephone
companies attributable to their conduct of intrastate operations
in this state during the year next
preceding; provided, however, that if at June 30 in any year the
balance in the fund shall be in
excess of one hundred thousand dollars ($100,000), the amount of
the excess shall forthwith be
transferred to the general fund of the state. Prebilled revenue
shall be excluded from an excess
balance to be transferred to the general fund. The state controller
is authorized and directed to
draw his or her orders upon the general treasurer for the payment
from the fund of such sums as
may be required from time to time upon receipt by him or her of
proper vouchers approved by the
administrator or the commission chairperson as appropriate.
(b) The public utility making an application or filing to the commission
or division, or subject to a
commission or division initiated investigation, or any public utility
selling {ADD distributing ADD}
electricity or gas whose retail rates would be affected by a filing
made by the administrator or a
federally regulated electric or gas company before an agency of
the federal government or a
federal court, shall be charged with and shall pay a portion of
the expenses reasonably so incurred
by the commission and by the division for the purchase of materials
and for the employment of
legal counsel, official stenographers, engineers, accountants, and
expert witnesses, and for travel
and other necessary expenses as are reasonably attributable to the
investigation or the hearing of
the proposal by the commission and the division, or to the administrator's
representation of the
state before the agency of the federal government. The administrator
{ADD or the commission
chairperson, as appropriate, ADD} shall ascertain the expenses and
shall determine the amount to
be paid by the public utility company or companies, and bills shall
be rendered therefor either at
the conclusion of the investigation or hearing, or from time to
time during its progress, and the
amount of each bill so rendered shall be paid by the public utility
to the administrator {ADD or the
commission, as appropriate, ADD} within thirty (30) days from the
date of its rendition unless,
within the thirty (30) day time period, the public utility so billed
shall request an opportunity to be
heard by the commission as to the amount thereof. The commission
shall comply with any such
request. Any amount of the bill not paid within thirty (30) days
from the date of service of the
determination upon the hearing, or, if none shall be requested,
within thirty (30) days from the date
of rendition of the bill, shall draw interest at the rate of twelve
percent (12%) per annum. At the
discretion of the administrator, {ADD or the commission chairperson,
as appropriate, ADD}
utility companies may be prebilled for contractual services utilized
by the commission or division.
Any revenue received by public utilities not expended upon the completion
of the case will be
promptly reimbursed to the utility company. The total amount which
may be charged to any public
utility under authority of this section for proceedings before the
commission or division in any
calendar year shall not exceed one hundred sixty thousand dollars
($160,000); in addition, the
total amount which may be charged against any public utility under
authority of this section for the
administrator's representation of the state before agencies of the
federal government in any
calendar year shall not exceed one hundred sixty thousand dollars
($160,000). All moneys
collected by the administrator {ADD or the commission ADD} pursuant
to this section shall be
paid by him or her monthly to the general treasurer to be added
to the public utilities reserve fund.
(c) The division of public utilities shall adopt by regulation,
a fee schedule for all
telecommunications filings, including initial applications and annual
registrations, by
telecommunications providers which are not otherwise subject to
the provisions of sub-paragraphs
(a) or (b). The moneys assessed and paid shall be paid into the
general fund and shall not be part
of the public utilities reserve fund.
{ADD (d) The general assembly shall annually appropriate such sums
as it may deem necessary
for the salaries of the commissioners and their expenses incurred
in the performance of their duties,
and for the operations of the commission and the division and payment
of such office expenses and
assistance as from time to time may be required. The state controller
is authorized and directed to
draw his or her orders upon the general treasurer for the payment
of such sum, or so much thereof,
as may be required from time to time upon receipt by him or her
of vouchers approved by the
administrator or his or her authorized agent. ADD}
39-1-27. Appropriations and disbursements. -- The general assembly
shall annually appropriate
such sums as it may deem necessary for the salaries of the commissioners
and their expenses
incurred in the performance of their duties, and for the operations
of the commission and the
division and payment of such office expenses and assistance as from
time to time may be required.
The state controller is authorized and directed to draw his or her
orders upon the general treasurer
for the payment of such sum, or so much thereof, as may be required
from time to time upon
receipt by him or her of vouchers approved by the administrator
or his or her authorized agent.
{ADD 39-1-27. Electric distribution companies required to file restructuring
plans. --
ADD} {ADD (a) On or before January 1, 1997, each electric distribution
company shall file with
the commission a plan for transferring ownership of generation,
transmission, and distribution
facilities into separate affiliates of the electric distribution
company. The transmission facilities
owned by the electric distribution company shall be transferred
to an electric transmission
company at a price that shall equal the book value of the transmission
facilities on the electric
distribution company's accounts net of depreciation and deferred
taxes as of the date of transfer.
The generation plant, equipment, and facilities owned by an electric
distribution company shall be
transferred to an affiliate that is a nonregulated power producer
at a price that shall equal the book
value of the generation plant, equipment, and facilities on the
electric distribution company's
accounts net of depreciation and deferred taxes as of the date of
the transfer. Consistent with the
schedule for implementing retail access in section 39-1-27.3, each
electric transmission company
shall file tariffs with the Federal Energy Regulatory Commission
(FERC) and electric distribution
companies shall file tariffs with the commission. The tariffs will
provide the terms, conditions and
rates for nondiscriminatory access to transmission and distribution
facilities to wholesale and retail
customers and to nonregulated power producers. The tariffs shall
(1) conform to the standards,
policies, and requirements of the Federal Energy Regulatory Commission
or the commission as
appropriate with respect to nondiscriminatory access to transmission
and distribution services, (2)
fulfill such standards with respect to both transmission and distribution
services for the benefit of
both wholesale and retail customers and their suppliers, and (3)
provide retail access in
accordance with the schedule set forth in section 39-1-27.3. For
purposes of this section,
nondiscriminatory access shall mean access to transmission and distribution
services on rates,
terms and conditions found to be reasonable by the FERC or the commission
as appropriate and
applied consistently to all customers in a rate class regardless
of their supplier. When establishing
terms and conditions for distribution service, the commission shall
implement standards, policies,
and requirements consistent with those established by the Federal
Energy Regulatory Commission
for transmission service unless it determines that alternative terms
and conditions are in the public
interest.
(b) The commission shall review the plan within six (6) months of
filing and if the plan is in
compliance with chapter 3 of this title, shall authorize the property
transfers, securities issuance's
and affiliate transactions pursuant to this title and shall grant
all necessary regulatory approvals. All
existing state and local rights, authorizations and approvals, including
but not limited to, permits,
licenses, locations, indentures, leases, orders, or similar rights
associated with the ownership and
operation of plant and equipment, and shall be deemed transferred
with the associated plant and
equipment upon the commission's authorization of the transfer effective
as of the date of transfer.
(c) The electric distribution company shall implement the corporate
reorganizations and property
transfers specified in such restructuring plan, terminate its all
requirements contract with its
wholesale power supplier on the terms set forth in 39-1-27.4 and
provide retail access for all
customers in Rhode Island with a standard offer as set forth in
39-1-27.3 no later than three (3)
months after retail access is available to forty percent (40%) or
more of the kilowatt-hour sales in
New England. The commission may extend this time if it determines
that additional time is
necessary to implement the transactions on reasonable terms and
in accordance with a reasonable
schedule; provided however, that nothing in this section shall be
construed to limit the effect of
39-1-27.3 or permit the commission to unduly discriminate in providing
retail access among or
within rate classes.
(d) Following the complete implementation of the restructuring plans,
electric distribution
companies shall be prohibited from selling electricity at retail
and from owning, operating, or
controlling transmission facilities or generating facilities, although
such facilities may be owned by
affiliates of electric distribution companies.
(e) Following the termination of the electric distribution company's
contracts with its wholesale
power supplier, the wholesale power supplier shall become a nonregulated
power producer, and
shall be free, subject to the requirements of the standard offer
set forth in 39-1-27.3(e) and retail
electric licensing commission plan requirements pursuant to 39-1-27.1
to sell electricity generated
from each of its facilities on either the wholesale or retail markets
at market prices, either directly
or through an affiliate, which shall also become a nonregulated
power producer. The former
wholesale power supplier and its affiliates shall be free to apply
to become exempt wholesale
generators pursuant to section 32 of the Public Utility Holding
Company Act of 1935 and other
federal law, rules and regulations, and each and every generating
facility of the former wholesale
power supplier shall become an eligible facility pursuant to that
statute. Accordingly, the legislature
hereby finds and declares that the division has sufficient regulatory
authority, resources, access to
books and records to exercise its duties; and that the full participation
of former wholesale power
suppliers and affiliated nonregulated power producers in the market
and the designation of each of
the former wholesale power supplier's facilities as eligible facilities
will benefit consumers, is
consistent with state law, will not provide any unfair competitive
advantage by virtue of their status
as a former wholesale power supplier or as affiliates of electric
distribution companies, and is in the
public interest.
(f) Although reducing air emissions from power plants is a goal
of electricity industry restructuring,
power plants in Rhode Island already have low emissions relative
to their counterparts in other
states. For this reason, it is unnecessary for the restructuring
plans required by this section to
address in-state air emission reductions. However, to the extent
a wholesale power supplier
receiving contract termination fees pursuant to section 39-1-27.4(b)(iv)
owns and operates as of
December 31, 1995 fossil fired generation in another state which
does not meet air emission
standards applicable as of that date to new electric generating
facilities in that state, such wholesale
power suppliers shall cooperate with the appropriate environmental
officials in the state or states
where such generating facilities are located to develop a plan for
reducing the emissions of nitrogen
oxides, sulfur dioxide, and particulate matter from such plants
on an overall basis through
retirements, replacements, controls or offsets or any combination
of the above toward the air
emissions standards applicable to new electric generating facilities
in effect in the state or states
where the plants are located as of January 1, 1996. Such plans shall
be implemented in connection
with electric industry restructuring in the state or states where
the generating facilities are located.
(g) An electric distribution company, whether public, quasi-municipal
or investor owned, that as of
January 1, 1996 did not purchase power at wholesale from a wholesale
power supplier under an
all requirements contract shall include proposals for recovering
transition costs consistent with the
elements which would be comparable in nature to the elements included
in termination fees
pursuant to Section 39-1-27.4(b) through (g) and for providing a
standard offer consistent with
requirements of Section 39-1-27.3(d) in its plan filed with the
commission pursuant to this section.
The filing by an electric distribution company that is a quasi-municipal
corporation shall also
address any unique circumstances affecting the electric distribution
company including special
contract requirements or charter restrictions and the conditions
that the quasi-municipal
corporation must satisfy in order to participate in retail competition.
In reviewing the filing and
determining the appropriate level of transition cost recovery, the
commission shall apply standards
consistent with those contained in Section 39-1-27.4(b) through
(g) and with this subsection. The
commission shall be authorized to take any action or to grant any
approval necessary to maintain
hydro-electric power purchases from the Niagara and St. Lawrence
power projects by
quasi-municipal corporations. Notwithstanding any other provision
of this section, quasi-municipal
electric distribution companies that purchase hydro-electric power
from the Niagara and St.
Lawrence power projects shall be authorized to continue to resell
such power to residential
customers within their service territories. After notice and public
hearing, the commission may
exempt electric distribution companies subject to this paragraph
from (i) the requirement to transfer
ownership of generation and transmission facilities to affiliated
companies pursuant to paragraph
(a) above, and (ii) the prohibition against selling electricity
at retail pursuant to paragraph (d) above
with respect to sales within the service territory of such electric
distribution company, if it
determines that such exemptions are in the public interest.
(h) With the exception of the requirements of the standard offer
set forth in 39-1-27.3(e) and (h)
and retail electric licensing commission plan requirements pursuant
to 39-1-27.1, nothing in this
section shall be construed or interpreted to constrain the application
of anti-trust laws to
nonregulated power producers, whether affiliated or not with an
electric distribution company.
ADD}
39-1-27.1. Special fund for studies and research. -- There is hereby
created a special program
to be known as the public utilities special program for studies
and research. The monies made
available from general revenue appropriations shall be expended
at the discretion of the
administrator for meeting general expenses of the commission and
the division for studies and
research, consultations and conferences engaging in joint actions
with members of other state and
federal regulatory agencies, and for informational services. The
public utility companies and the
communications carriers located in this state shall annually be
assessed that sum of money which
together with any money remaining unexpended in the special program
on June 30 in any year shall
total twenty thousand dollars ($20,000). The administrator on July
1 in each year shall apportion
and assess the amount of money required to bring the special program
up to twenty thousand
dollars ($20,000) among the several public utility companies and
communications carriers located
in this state in the proportion that the gross intrastate revenues
of each public utility company and
communications carrier shall bear to the total gross intrastate
revenues for the next preceding
calendar year of all public utility companies and communications
carriers. The sum so apportioned
and assessed shall be in addition to any taxes payable to the state
under any revision of law and in
addition to any assessments made pursuant to the provisions of sections
39-1-23 and 39-1-26, as
amended.
{ADD 39-1-27.1. Retail Electric Licensing Commission Plan Requirements
and
Nonregulated Power Producer Registration Requirements. -- ADD} {ADD
(a) The retail
electric licensing commission shall by January 1, 1997 submit a
plan to the legislature which shall
include, but not be limited to, the following: (i) a recommendation
for taxing and/or assessing
electric distribution companies, electric transmission companies
and nonregulated power
producers; (ii) recommendations regarding changes to the regional
power pool that would facilitate
the creation of an independent system operator and voluntary power
exchange; and (iii) proposals
for consumer protections, access to books and records, and other
requirements the retail electric
licensing commission determines to be reasonable, necessary and
in the public interest.
(b) On or before January 1, 1997, the public utilities commission
shall establish regulations
applicable to nonregulated power producers that are selling electricity
in this state that are
necessary to meet (directly or through contract) the operating and
reliability standards of the
regional power pool.
In addition, the public utilities commission shall participate in
all proceedings before the federal
energy regulatory commission with respect to the modification and/or
termination of wholesale all
requirements contracts in place as of January 1, 1996, between electric
distribution companies
operating in this state and their affiliated power suppliers. The
purpose of such participation is to
ensure that termination fees payable by ultimate customers in this
state are determined in
accordance with the provisions of section 39-1-27.4. To facilitate
such participation, the public
utilities commission is authorized to assess electric distribution
companies under its jurisdiction for
its reasonable expenses incurred in connection with its participation
in those proceedings, up to a
maximum of one hundred thousand dollars ($100,000) per year, which
assessments shall be in
addition to all other assessments authorized by this title.
On January 1, 1998, and annually for the next four (4) years thereafter,
the public utilities
commission shall transmit to the governor and the speaker of the
house and the majority leader of
the senate, a report detailing: developments in the competitive
power supply market in this state;
estimated savings realized by customers as a result of the introduction
of retail competition in the
power supply market; progress towards implementation of a regional
transmission agreement for
New England and other reforms implemented by the regional power
pool; and the status of electric
industry restructuring activities in the other New England states
and any recommendations for
statutory changes.
(c) All nonregulated power producers seeking to do business in this
state must file with the division
of public utilities and carriers a notarized registration application
that includes the information
identified below and any additional information required by the
division of public utilities and
carriers pursuant to regulations issued to protect the public interest
in connection with the
registration of entities seeking to sell electricity at retail.
(i) Legal name;
(ii) Business address;
(iii) The name of the state where organized; the date of organization;
a copy of the articles of
incorporation, association, partnership agreement, or other similar
document regarding legal
organization;
(iv) Name and business address of all officers and directors, partners;
or other similar officials;
(v) Name, title, and telephone number of customer service contact
person;
(vi) Name, title, and telephone number of regulatory contact person;
(vii) Name, title and address of registered agent for service of
process;
(viii) Brief description of the nature of business being conducted;
and
(ix) Evidence of financial soundness such as surety bonds, a recent
financial statement, or other
mechanism as specified by the division.
(d) Copies of all filings pursuant to paragraph (c) above, shall
be served upon the commission and
all electric distribution companies. Updated information shall be
filed within ten (10) days of any
change to the information included in a registration application,
as filed or previously updated.
Registration applications filed pursuant to paragraph (c) above,
shall become effective thirty (30)
days after filing with the division, unless rejected during such
period. If the division should reject a
registration application, it shall specify the applicable reasons
in writing and, if practicable, identify
alternative ways to overcome any deficiencies. After an opportunity
of a hearing, the division may
rescind a nonregulated power producer's registration for cause.
Nonregulated power producers
shall be authorized to do business in this state after their registration
becomes effective and while it
remains in good standing. ADD}
{ADD 39-1-27.3. Electric distribution companies required to provide
retail access and
standard offer. -- ADD} {ADD (a) To promote economic development
and the creation and
preservation of employment opportunities within the state, on July
1, 1997, each electric
distribution company shall offer retail access from nonregulated
power producers to:
(i) All new commercial and industrial customers, including new manufacturing
customers,
commencing service on or after July 1, 1997, with an anticipated
average annual demand of two
hundred (200) kilowatts or greater;
(ii) All existing manufacturing customers with an average annual
demand of fifteen hundred (1500)
kilowatts or greater; and
(iii) All accounts in the name of the State of Rhode Island, provided,
however, no electric
distribution company shall be required to release more than ten
percent (10%) of its total
kilowatt-hour sales to retail access pursuant to this paragraph
(a).
(b) On January 1, 1998, all electric distribution companies shall
expand their offer of retail access
to include existing manufacturing customers with an average annual
demand of two hundred (200)
kilowatts or greater and all accounts in the name of the cities
and towns in Rhode Island, provided,
however, no electric distribution company shall be required to release
a total of more than twenty
percent (20%) of its total kilowatt-hour sales to retail access
pursuant to paragraphs (a) and (b) of
this section.
(c) Retail access shall be implemented for all customers in Rhode
Island within three (3) months
after retail access is available to forty percent (40%) or more
of the kilowatt-hour sales in New
England including the total kilowatt-hour sales in Rhode Island;
provided however, that if such
retail access in New England has not occurred by July 1, 1998, then
each electric distribution
company shall expand its offer of retail access to all of the electric
distribution company's remaining
customers. The commission may extend this deadline for up to six
(6) months for some or all
customers if it determines that additional time is necessary to
ensure that retail access can be
extended to all customers on reasonable terms. Each electric distribution
company shall notify all
customers in its service territory of the options available to them
to procure electric service at least
ninety (90) days before such customers become eligible for retail
access. Upon request from any
nonregulated power producer, an electric distribution company shall
make available a list of the
names and addresses of its customers that are, or within sixty (60)
days are expected to become,
eligible for retail access; provided, however, such lists shall
not include customers that have
submitted written requests to the electric distribution company
that they be excluded from such
lists.
(d) Within three (3) months after retail access is available to
forty percent (40%) or more of the
kilowatt-hour sales in New England and extending through year 2009,
each electric distribution
company shall arrange with its wholesale power supplier for a standard
power supply offer
("Standard Offer") to customers that have not elected
to enter into power supply arrangements
with other nonregulated power suppliers. The standard offer shall
be priced such that the average
revenue per kilowatt-hour received from the customer for such power
together with approved
distribution, transmission and transition charges shall equal the
price that would have been paid
under rates in effect during the twelve (12) month period ending
September 30, 1996 adjusted
annually for eighty percent (80%) of the change in the consumer
price index for the immediately
preceding twelve (12) month period, and also for other factors reasonably
beyond the control of
the electric distribution company and its former wholesale power
supplier including but not limited
to changes in federal, state or local taxes or extraordinary fuel
costs; provided, however, that
adjustments to the standard offer for factors other than inflation
must be approved by the
commission. The standard offer is to be a price cap and may, after
notice to the commission, be
less than the maximum allowed at anytime for the generation component
of the standard offer.
Once a customer has elected to enter into a power supply arrangement
with a nonregulated power
producer, the electric distribution company shall not be required
to arrange for the standard offer
to such customer. No customer who initially elects the standard
offer and then chooses an
alternative supplier shall be required to pay any withdrawal fee
or penalty to the provider of the
standard offer unless such a penalty or withdrawal fee was agreed
to as part of a contract;
however, no residential customer shall be required to pay a penalty
or withdrawal fee for choosing
an alternative supplier. Nothing in this paragraph shall be construed
to restrict the right of any
nonregulated power producer to offer to sell power to customers
at a price comparable to that of
the standard offer specified pursuant to this paragraph.
(e) On or before January 1, 1997, each retail distribution company
shall file with the commission
unbundled rates which separately identify charges for use of transmission
and distribution facilities
and provide for retail access in accordance with the schedule set
forth in section 39-1-27.3. Such
unbundled rates shall also include transition charges calculated
in accordance with 39-1-27.4 and
shall become effective on July 1, 1997. Such unbundled rates shall
also include just and reasonable
terms, conditions, and procedures for interconnection with small
scale generating units located on
the distribution system. If the Federal Energy Regulatory Commission
(FERC) also requires such
filings, then the retail distribution or transmission company may
submit to the commission the same
filing as provided to FERC to meet the intent of this paragraph.
(f) In recognition that electricity is an essential service, each
electric distribution company shall,
within three (3) months after retail access is available to forty
percent (40%) or more of the
kilowatt-hour sales in New England, arrange for a last resort power
supply for customers who are
no longer eligible to receive service under the standard offer and
not adequately supplied by the
market because they are unable to obtain or retain electric service
from nonregulated power
producers. The electric distribution company shall periodically
solicit bids from nonregulated
power producers for such service at market prices plus a fixed contribution
from the electric
distribution company. Acceptance of bids by the electric distribution
company and the terms and
conditions for such last resort service shall be subject to approval
by the commission. The bids
requiring the lowest fixed contribution from the electric distribution
company shall be accepted.
Nothing in this section shall be construed to prohibit an electric
distribution company or
nonregulated power producer from terminating service provided hereunder
in accordance with
commission rules and regulations in the event of nonpayment of such
service. All fixed
contributions and any reasonable costs incurred by the electric
distribution company in arranging
this service shall be included in the distribution rates charged
to all other customers. The
commission may promulgate regulations to implement this section.
ADD}
{ADD 39-1-27.4. Transition Charges Authorized. -- ADD} {ADD (a)
An electric distribution
company that purchases power at wholesale from a wholesale power
supplier under an all
requirements contract shall be authorized to execute an agreement
terminating, in whole or in part,
such all requirements contract on terms that require payment of
a contract termination fee
complying with the requirements in section (b) and notwithstanding
any other provisions of this title,
shall be allowed to recover such payment through a nonbypassable
transition charge paid by all
customers of the electric distribution company. Any nonregulated
power producer may pay all or a
part of its customers' transition charges.
(b) The contract termination fee paid by the electric distribution
company to its wholesale power
supplier shall include the electric distribution company's share
of its wholesale supplier's costs
associated with the following:
(i) regulatory assets related to the generation business which include
costs for which recovery has
been deferred to the future in accordance with prior rate cases
or settlements approved by
regulators, or consistent with regulatory precedent; regulatory
assets of affiliated fuel suppliers; and
transition obligations for post-retirement health care costs of
the wholesale supplier; and
(ii) nuclear obligations including decommissioning costs and nuclear
costs independent of
operation. Transition costs attributable to nuclear decommissioning
must be deposited in unit
specific decommissioning trust funds or returned to customers if
not needed. Nuclear costs
independent of operation shall mean estimated nuclear operation
and maintenance expenses that
would be incurred assuming the nuclear units were to permanently
cease operating on December
31, 1997; and
(iii) above market payments to power suppliers for purchased power
contracts of the wholesale
power supplier in place as of December 31, 1995 together with reasonable
payments of the
wholesale power supplier to buy out of these contracts or to reduce
payments pursuant to them;
and
(iv) the net unrecovered commitments and capital costs of all generating
plants owned directly or
indirectly by the electric distribution company and its wholesale
power supplier as of December
31, 1995, whether or not such generating plants are operating, including
natural gas conversion
costs and above market pipeline demand charges. Except as provided
above, no operation or
maintenance expenses associated with existing fossil fired or hydroelectric
generating facilities may
be included in contract termination fees to be recovered by electric
distribution companies from
customers through transition charges.
(c) Because of the uncertainty associated with the timing and amounts
to be paid pursuant to (b)(ii)
(with the exception of nuclear costs independent of operation) and
(iii) above, the termination fee
to the wholesale supplier and the related transition charge to the
electric distribution company's
customers shall continue until these liabilities have been satisfied
with an annual reconciliation of
estimated to actual expenses. Because the items specified in (b)(i)
and (iv) can be determined with
certainty or reasonably estimated and the nuclear costs independent
of operation can be
reasonably estimated, no annual reconciliation is necessary for
these items. However, to moderate
the rate impact of these items, recovery through the transition
charge will be spread over the
period from July 1, 1997 through December 31, 2009, with a return
on the unamortized balance
as specified in section (d) below; effective January 1, 2010, there
shall be no allowance for these
items in the transition charges billed by electric distribution
companies.
(d) In recognition of the potential for a positive residual value
of existing generating facilities at the
conclusion of the amortization period in the year 2010, the return
on equity allowed on the
unamortized balance of items (b)(i) and (iv) paid to the wholesale
supplier and recoverable from
customers of the electric distribution company shall be limited
to one percentage point plus the
average rate of return on BBB rated long term utility bonds issued
during the six (6) month period
July through December, 1996.
(e) Notwithstanding any other provisions of this section, other
than paragraph (g), for the period
July 1, 1997 to December 31, 2000 the nonbypassable transition charge
implemented by such
electric distribution company shall recover an amount equal to two
and eight-tenths of a cent
(2.8%) per kilowatt-hour transmitted or distributed. After the year
2000, the transition charge
recoverable from customers shall be established by the commission
in an amount sufficient to
recover the costs authorized in this section with an adjustment
for any over or under recoveries of
the contract termination fees occurring during the period July 1,
1997 to December 31, 2000. The
aforesaid adjustment shall be made in a manner the commission determines
appropriate.
(f) Any wholesale power supplier receiving contract termination
fees with respect to power
purchase contracts pursuant to section 39-1-27.4(b)(iii) shall offer
to sell, buy down, or assign to
others, through either public bid or private negotiation, at least
the portion of such contracts
attributable to its affiliated electric distribution company. To
the extent that bids received or terms
negotiated would, on an expected value basis, lower the transition
charges paid by ultimate
customers in Rhode Island, the wholesaler power supplier shall use
all reasonable means to
consummate such sale, buydown, or assignment and upon completion
shall promptly file
appropriate adjustments to the contract termination fees in place
at that time. To provide an
incentive for wholesale power suppliers to obtain the best possible
terms for any such sale,
buydown, or assignment, they shall be allowed to retain ten percent
(10%) of the savings expected
to be realized by customers as a result of such sale, buydown, or
assignment. The amount of any
such incentive payment shall be fixed at the time of the sale, buydown,
or assignment based on
estimated data and recovered in equal payments over the remaining
term of the related power
purchase contract with appropriate adjustments for the time value
of money.
(g) Every wholesale power supplier receiving contract termination
fees pursuant to this section
shall, subject to receipt of all necessary regulatory approvals,
subject its electric generating
facilities, other than nuclear units or entitlements, as of January
1, 1996, to a form of market
valuation through lease, sale, spin-off or other method. The wholesale
power supplier shall select
the valuation methodology utilized which may be for all the generating
facilities as a group, groups
of generating facilities, or individual generating facilities. The
wholesale power supplier shall meet
its obligations under this section by leasing, selling, spinning
off or otherwise disposing of at least a
fifteen percent (15%) interest in its electrical generating facilities,
other than nuclear units or
entitlements provided, however, if, pursuant to a requirement in
connection with electric industry
restructuring in another state prior to completion of the valuation
pursuant to this paragraph, a
wholesale power supplier subject to this paragraph is required to
sell, spin-off, or otherwise
dispose of more than a fifteen percent (15%) ownership interest
in its electric generating facilities,
other than nuclear units or entitlements, then the same requirement,
including related timing
requirements, shall apply in the state of Rhode Island and the market
valuation resulting from
fulfilling that requirement shall be used in determining the adjustment
to the contract termination fee
required by this paragraph. Once the wholesale power supplier determines
the percentage interest
in its electrical generating facilities that it will lease, sell,
spin-off or otherwise submit to market
valuation to meet its obligation under this paragraph, the company
shall develop an implementation
methodology to accomplish the lease, sale, spin-off or other disposition
of interest that is
reasonably likely to approximate the market value of the generation
assets. The implementation
methodology shall be filed with the commission on or before July
1, 1997 for the commission to
review and approve or reject no later than 90 days after submittal.
The commission shall approve
such implementation methodology unless the commission finds, after
public hearing, the
methodology is not reasonably likely to approximate the market value
of the company's generating
assets taking into consideration the restrictions included in mortgage
indentures and the need to
satisfy the requirements of regulatory authorities outside the state.
Promptly after commission
approval of the implementation methodology companies subject to
this section must submit for
regulatory review, applications for the approvals necessary to commence
such valuation. In
addition, companies subject to this section shall also provide the
commission with quarterly status
reports on the progress of proceedings before other regulatory agencies
associated with the
implementation of this section. The valuation required by this section
shall be completed within six
(6) months after: (1) retail access is available to forty percent
(40%) or more of the kilowatt-hour
sales in New England or (2) the receipt of all necessary regulatory
approval for such valuation,
whichever occurs later, provided, however, the commission may extend
the deadline for
completing such valuation by no more than six (6) months if it determines
that such an extension is
in the public interest. Upon completion of such valuation, the wholesale
power supplier, together
with its affiliated electric distribution company shall file to
adjust the contract termination fees in
place at the time such valuation is complete as necessary to reflect
the electric distribution
company's share of such market valuation in the transition charge
paid by ultimate customers in
Rhode Island. Any such adjustment shall be net of the estimated
revenue lost by the wholesale
power supplier as a result of retail access during the period prior
to completion of such valuation,
the electric distribution company's share of prudently incurred
capital investments made after
December 31, 1995, which were reasonably necessary to (i) enable
the electrical generating
facilities to operate safely and in compliance with applicable laws
and regulations, (ii) improve
environmental performance or to increase fuel diversity or flexibility,
with regulatory authorization,
reasonable transaction costs, (including the cost of refinancing),
and revenue lost as a result of the
reduced return on equity specified in section (d) above. For purposes
of this section, the
unreduced return on equity that will be used prospectively and to
value the revenue lost prior to
such adjustment shall be the return on equity allowed to the wholesale
power supplier's affiliated
electric distribution company as of December 31, 1995, and shall
be included in the wholesale
power supplier's overall capital structure following such valuation.
Any adjustment to the contract
termination fee pursuant to this paragraph shall be reflected in
the termination fee otherwise
calculated in accordance with paragraph (b) above as a uniform adjustment
spread equally over
the period beginning with the date such adjustment is made and ending
December 31, 2009.
ADD}
{ADD 39-1-27.5. Performance Based Rates (PBR) for Electric Distribution
Companies.
-- ADD} {ADD To prevent residential customers from paying higher
rates as a result of the
phased introduction of competition to commercial and industrial
customers pursuant to 39-1-27.3,
and to hold overall rate increases to the level of inflation, for
the period beginning January 1, 1997
and ending on December 31, 1998, electric distribution companies
shall implement a performance
based rate plan. Electric distribution companies shall be precluded
from filing to increase their rates
pursuant to 39-3-11 or from seeking increases in their purchased
power adjustment clause for non
fuel increases in purchased power expense under contracts with wholesale
power suppliers when
those increases would become effective after a full suspension during
the period defined above
("the PBR period"), and during the PBR period only performance
based rate increases as
provided in this section shall be implemented. Performance based
increases calculated in
accordance with this section shall take effect for usage on and
after January 1 of each year during
the PBR period and shall be determined in accordance with the following
procedure. On or before
November 15 of 1996 and 1997, each electric distribution company
shall file a report with the
commission detailing the earned return on common equity from intrastate
operations for the twelve
(12) months ended as of the preceding September 30. Electric distribution
companies shall be
authorized to increase their base rates by a per kilowatt-hour factor
equal to the average revenue
per kilowatt-hour received by the electric distribution company
during the prior twelve (12) month
period ending September 30, excluding the costs of fuel and demand
side management programs
multiplied by the rate of inflation as measured by the change in
the consumer price index over the
most recent twelve (12) months for which data is available. Electric
distribution companies having
earned returns on equity greater than the return allowed as of July
1, 1996 by the commission
(currently allowed rate) shall be required to credit to or for the
benefit of customers one hundred
percent (100%) of all earnings in excess of one and one-half percent
(1.5%) above the currently
allowed rate and fifty percent (50%) of all earnings between the
currently allowed rate and one
and one-half percent (1.5%) above the currently allowed rate of
return on common equity by
refunding revenues associated with such earnings through a refund
factor implemented over a
twelve (12) month period. Electric distribution companies that earned
less than six percent (6%)
return on common equity shall be authorized to increase their base
rates by inflation as measured
above and to implement a surcharge to collect over twelve (12) months
the revenue necessary to
make up the difference between the return on common equity earned
during the historic period and
six percent (6%). During the PBR period, electric distribution companies
shall also be authorized,
with commission approval, to change their base rates to reflect
factors reasonably beyond their
control including, but not limited to, changes in federal, state
and local taxes and environmental
remediation costs. On or before July 1, 1997, the commission shall
establish performance
standards to ensure that historic levels of safety, reliability
and customer service do not deteriorate
during the PBR period. Specifically, the commission shall establish
symmetric performance
standards in these areas that provide the company the opportunity
to incur in aggregate an annual
penalty or reward equal to one percentage point return on common
equity that shall not be
considered in determining any other returns on common equity within
this section. Notwithstanding
the foregoing, rates applicable to low income customers shall not
be increased for any rate
increases authorized pursuant to this paragraph. Nothing in this
paragraph shall be deemed to
preclude an electric distribution company from seeking approval
from the commission for:
(i) changes in the fully reconciling adjustment clauses in place
to reflect changes in the cost of fuel
and demand side management programs;
(ii) reconciling adjustments pursuant to purchase power clauses
that do not reflect increases in level
of wholesale rates;
(iii) revenue neutral rate design changes; and
(iv) accounting changes.
Nothing in this paragraph shall preclude the commission from considering
the interests of
ratepayers in the interpretation of this paragraph. This section
shall not apply to a quasi-municipal
corporation. ADD}
{ADD 39-1-27.6. Standards of Conduct. -- ADD} {ADD (a) An electric
distribution company
must conduct its business to conform with the standards of conduct
specified in paragraphs (b)
through (e) of this section.
(b)(i) Except as provided in paragraph (ii) of this section and
as authorized by the commission
pursuant to section 39-1-27(g), the employees of the electric distribution
company engaged in
distribution system operations must function independently of its
employees, or the employees of
any of its affiliates, who are engaged in the business of a nonregulated
power producer.
(ii) Notwithstanding any other provisions in this section, in emergency
circumstances affecting
system reliability, electric distribution companies may take whatever
steps are necessary to keep
the system in operation. Electric distribution companies must report
to the commission each
emergency that resulted in any deviation from the standards of conduct,
within twenty-four (24)
hours of such deviation.
(c)(i) Any employee of any affiliate of an electric distribution
company who is engaged in the
business of a nonregulated power producer is prohibited from: conducting
distribution system
operations or reliability functions; and having access to the system
control center or similar facilities
used for distribution operations or reliability functions that differs
in any way from the access
available to other nonregulated power producers.
(ii) Employees engaged in either an affiliated nonregulated power
producer function or an electric
distribution function are not precluded from transferring between
such functions as long as such
transfer is not used as a means to circumvent the standards of conduct
of this section. Notices of
any employee transfer to or from electric distribution company operation
or reliability functions
must be reported to the commission. The information to be reported
must include: the name of the
transferring employee, the respective titles held while performing
each function (i.e. on behalf of the
electric distribution company and the nonregulated power producer),
and the effective date of the
transfer.
(iii) Any employee of any affiliate of an electric distribution
company who is engaged in the
nonregulated power producer function must not have preferential
access to any information about
the electric distribution company's distribution system that is
not available to all nonregulated
power producers.
(iv) An electric distribution company is responsible for ensuring
that any employee of the electric
distribution company may not disclose to employees of any affiliate
engaged in a nonregulated
power producer function any information concerning the distribution
system of the electric
distribution company or the distribution system of another (including
information received from
non-affiliates or information about distribution system operations,
capability, price, curtailments,
auxiliary services, and the like) through non-public communications
that is not at the same time
available to all nonregulated power producers without restriction.
If an employee of the electric
distribution company engaged in distribution system operations or
reliability functions discloses
information in a manner contrary to the requirements of the standards
of conduct, the electric
distribution company must immediately report such information to
the commission. An electric
distribution company may not share any market information, acquired
from nonaffiliated,
nonregulated power producers or developed in the course of responding
to requests for
distribution service, with any employee of an affiliate engaged
in a nonregulated power producer
function.
(v) Employees of the electric distribution company engaged in distribution
system operations or
reliability functions must strictly enforce all tariff provisions
relating to the sale or purchase of retail
access distribution service, if these provisions do not provide
for the use of discretion. Employees
of the electric distribution company engaged in distribution system
operations must apply all tariff
provisions relating to the sale or purchase of retail access distribution
service in a fair and impartial
manner that treats all customers (including the electric distribution
company and any affiliate) in a
non-discriminatory manner, if these provisions involve discretion.
The electric distribution company
must keep a log, available for commission audit, detailing the circumstances
and manner in which it
exercised its discretion under any terms of its tariffs. The electric
distribution company may not,
through its tariffs or otherwise, give preference to purchases or
sales made on behalf of its own
power customers, or those of an affiliate, over the interests of
any other customer in matters
relating to the sale or purchase of distribution service (including
issues of price, curtailments,
scheduling, priority, ancillary services, and the like). If the
electric distribution company offers a
discount on purchases of distribution service made on behalf of
its own power customers or those
of any affiliate, then, at the same time, it must offer to provide
the same discount to all similarly
situated distribution service customers.
(d) An electric distribution company must maintain its books of
account and records separately
from those of its affiliates and these must be available for commission
inspection.
(e) The electric distribution company must maintain in a public
place, and file with the commission,
current written procedures implementing the standards of conduct
in such detail as will enable
customers and the commission to determine that the electric distribution
company is in compliance
with the requirements of this section. ADD}
39-1-28. Acceptance of grants. -- The commission and the division
are authorized and
empowered to apply for and receive and accept in the name of the
state grants, of property,
money and services and other assistance offered or made available
to them by any person, any
political subdivision or entity, or any other agency, governmental
or private, including the United
States or any of its agencies and instrumentality's, which they
may use for any purpose in
furtherance of their powers and duties; provided, however, that
acceptance of any grant shall not
make the state in any manner legally or equitably liable to the
donor relative to the use of the grant.
The grants received shall not be covered into the general fund of
the state, but shall be kept by the
general treasurer in a separate fund for the commission and division
and shall be paid out by him or
her only upon receipt of properly authenticated vouchers signed
by the chairperson of the
commission {ADD or the administrator as appropriate, ADD} without
the necessity of
appropriation or reappropriation by the general assembly.
39-1-30.2. Possession of land adverse to a utility. -- No interest
in real property of an electric
{ADD distribution company, electric transmission company, ADD} gas,
telephone or water utility
may be defeated or otherwise adversely affected by the use, possession
or occupancy of said real
property by any person.
39-1-33. Reports. -- The commission and division shall make annual
reports {ADD due on the
first (1st) day of June and the first (1st) day of December ADD}
to the governor for transmittal to
the general assembly, which shall contain summaries of the major
decisions, and events activities
every rate case hearing, and/or order of the commission and {ADD
division occurring in the
period immediately preceding the aforenamed deadlines ADD} .
39-1-35. Conflict of interest. -- A person, {ADD or his/her or dependent
child, spouse, of any
person, who is, or has been in the past one (1) year, ADD} in the
employ of or holding any official
relation to any company subject to the supervision of the commission,
or engaged in the
management of the company, or owning stock, bonds, or other securities
thereof, or who is,
{ADD or has been in the past one (1) year, ADD} in any manner, connected
with the operation of
the company in this state, shall not be a commissioner or clerk
of the commission; nor shall any
commissioner or clerk of the commission, personally or in connection
with a partner or agent,
render professional service for or against or make or perform any
business contract with any
company subject to the supervision, relating to the business of
the company, except contracts
made with them as common carriers, or in regular course of public
service.
39-1-36. Offices of commission and division. -- The department of
administration shall furnish
the commission with suitable offices, quarters in which to hold
its meetings and transact its business
and a properly appointed hearing room adequate to accommodate the
public, witnesses,
stenographers and the commissioners and their clerks. Said department
{ADD The department of
administration ADD} shall furnish the division with offices suitably
located for the convenience of
the public and properly equipped for keeping its records, maps and
documents and for the efficient
use of its library.
39-1-37. Public utility administrator defined -- Continuity of functions.
-- Wherever in any
general or public law the words "public utility administrator"
shall appear, the same words be
deemed to refer to and mean the public utilities commission or the
administrator of the division of
public utilities and carriers as the context shall require. The
commission shall be deemed and held
to constitute a continuation of the former public utility administrator,
and any proceeding, hearing,
or matter undertaken or commenced prior to May 16, 1969 and pending
on that date, shall be
conducted to completion by the administrator or by the commission
as the chairperson thereof
shall determine best serves the ends of justice . The governor is
authorized to transfer or reallocate
by executive order, the whole or any part of the appropriations
for the former division, public utility
administrator {ADD or commission ADD} , the former division of public
utilities, and carriers
within the department of business regulation, and the public utility
hearing board to the commission
and {ADD or ADD} the division.
39-1-39. Purchase of power from out-of-state. -- (a) Upon consent
and approval of the
governor, the commission shall be designated as the agency of the
state to negotiate, bargain, with
and otherwise arrange with any out-of-state electrical energy producer
in the public or private
sector for the procurement of power capacity and power output from
the electrical energy
producer, with the exclusive right on behalf of the state to contract
for the purchase of power from
any producer outside of the state, including the Dominion of Canada
and/or any of its provinces
and any other state in the United States.
(b) Upon the consent and approval of the governor, the commission
shall act as the agent for the
state for the resale of any power purchased from any public or private
out-of-state producer to
any Rhode Island electric energy producer, whether publicly or privately
owned. Any resale by
the commission to a Rhode Island electric energy producer shall
be made on a non-profit basis
without preference or discrimination for distribution within the
state.
(c) The commission, with the consent of the governor, is authorized
and empowered to enter into
contracts for the transmission of power from the place of purchase
to a point or points within the
state.
39-1-40. Toll-free telephone for complaints. -- The division shall
maintain a toll-free telephone
service whereby any consumer in Rhode Island may register an initial
complaint against any public
utility {ADD or nonregulated power producer ADD} . This tool free
telephone service may also
be used by cable television subscribers for the purpose stated above.
39-1-41. Distribution and sale of electrical energy purchased from
power projects. -- The
public utilities commission, in addition to the powers conferred
upon it by section 39-1-39,
notwithstanding any limitations on that authority imposed by that
section or by any other law of this
state, is hereby authorized to distribute and sell, at retail, electrical
energy purchased from the
Niagara and St. Lawrence power projects directly to all rural and
domestic consumers of
electricity in Rhode Island by entering into agreements with Rhode
Island electric utilities that
include, without limitation, the leasing of facilities and the providing
of services to the commission to
distribute electrical energy.
39-1.1-1. Compliance with rules prior to termination. -- No public
utility which {ADD
distributes electricity or ADD} supplies natural or manufactured
gas, electric, or water service shall
terminate service to any household in which all adult residents
are sixty-five (65) years of age or
older, or where any resident is handicapped or seriously ill, for
failure to pay an outstanding
indebtedness for service, without first complying with all rules
and regulations for such terminations
issued by the commission.
39-2-1. Reasonable and adequate services -- Reasonable and just
charges. -- {ADD (a)
ADD} Every public utility is required to furnish safe, reasonable,
and adequate services and
facilities. The rate, toll, or charge, or any joint rate made, exacted,
demanded, or collected by any
public utility for the conveyance or transportation of any persons
or property, including sewage,
between points within the state, or for any heat, light, water,
or power produced, transmitted,
{ADD distributed, ADD} delivered, or furnished, or for any telephone
or telegraph message
conveyed or for any service rendered or to be rendered in connection
therewith, shall be
reasonable and just, and every unjust or unreasonable charge for
the service is prohibited and
declared unlawful, and no public utility providing heat, light,
water, or power produced,
transmitted, {ADD distributed, ADD} delivered or furnished shall
terminate such service or
deprive any home or building, or whatsoever, of service if the reason
therefor is nonpayment of the
service without first notifying the user of the service, or the
owner or owners of the building as
recorded with the utility of the impending service termination by
written notice at least ten (10)
days prior to the effective date of the proposed termination of
service.
{ADD (b) Any existing rules and regulations dealing with the termination
of utility service and
establishing reasonable methods of debt collection promulgated by
the commission pursuant to this
chapter and the provisions of section 39-1.1-3, including but not
limited to, any rules and
regulations dealing with deposit and deferred payment arrangements,
winter moratorium and
medical emergency protections, and customer dispute resolution procedures,
shall be applicable to
any public utility which distributes electricity.
(c) The commission shall promulgate such further rules and regulations
as are necessary to protect
consumers following the introduction of competition in the electric
industry and which are
consistent with this chapter and the provisions of section 39-1.1-3.
ADD}
39-2-1.2. Utility base rate -- Prohibition of inclusion of advertising
in base rate. -- {ADD
(a) In addition to costs prohibited in section 39-1-27(b) ADD} no
public utility {ADD distributing
or ADD} providing heat, light, {ADD electricity or ADD} water, or
power produced,
transmitted, delivered, or furnished {ADD to or for the public ADD}
shall include as part of its
base rate any expenses for advertising, either direct or indirect,
which promotes the use of its
product or service or is designed to promote the public image of
the regulated industry. No {ADD
public ADD} utility so regulated 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. Notwithstanding the foregoing, 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 which is designed to promote {ADD public safety
ADD} conservation of the
{ADD public ADD} 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.
{ADD (b) Pres
