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Rhode Island Utility Restructuring Legislation

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) Preservation of environmental and low income programs. -- ADD} {ADD Effective as

of January 1, 1997, and for a period of five (5) years thereafter, each electric distribution company

shall include a charge of 2.3 mills per kilowatt-hour delivered to fund demand side management

programs and renewable energy resources. The allocation of this revenue between demand side

management programs and renewable energy resources shall be determined by the commission.

During the aforementioned five (5) year period the commission may, in its discretion, after notice

and public hearing, increase the sums for demand side management and renewable resources;

thereafter, the commission shall, after notice and public hearing, determine the appropriate charge

for these programs. As used in this section, renewable energy resources shall mean power

generation technologies that produce electricity from wind energy, small scale (less than 100

megawatts) hydropower plants that do not require the construction of new dams, solar energy, and

sustainably managed biomass. Fuel cells may be considered an energy efficiency technology to be

included in demand-side management programs. Special rates for low income customers in effect

as of the effective date of this act shall be continued, and the costs of all such discounts shall be

included in the distribution rates charged to all other customers. Nothing in this section shall be

construed as prohibiting an electric distribution company from offering any special rates or

programs for low income customers which are not in effect as of the effective date of this act,

subject to the approval by the commission. ADD}

39-2-2. Rate discrimination --. (a) If any public utility or any agent or officer of a public utility, as

defined in chapter 1 of this title, shall directly or indirectly by any device whatsoever, or otherwise,

charge, demand, collect, or receive from any person, firm or corporation a greater or less

compensation for any service rendered or to be rendered by it in or, affecting, or relating to the

transportation of persons or property between points within this state, {ADD the distribution of

electricity ADD} or the production, transmission, delivery or furnishing of heat, {ADD or ADD}

light, water, or power, or the conveyance of telegraph or telephone messages, or for any service in

connection therewith, than that prescribed in the published schedules or tariffs then in force or

established as provided herein, or than it charges, demands, collects, or receives from any other

person, firm or corporation for a like and contemporaneous service, under substantially similar

circumstances and conditions, the public utility shall be deemed guilty of unjust discrimination which

is hereby prohibited and declared to be unlawful and, upon conviction thereof, shall be fined not

less than two hundred dollars ($200) nor more than five hundred dollars ($500) for each offense;

and the agent or officer so offending shall be deemed guilty of a misdemeanor and, upon conviction

thereof, shall be fined not less than fifty dollars ($50.00) nor more than five hundred dollars ($500)

for each offense.

(b) Nothing in this section nor any other provision of the law shall be construed to prohibit the

giving by any public utility free or reduced rate service to any elderly person as defined by the

division.

39-2-4. Acceptance of unlawful rebates or advantages. -- It shall be unlawful for any person,

firm, or corporation knowingly to solicit, accept, or receive any rebate, concession, or

discrimination in respect to any service in, affecting, or relating to the transportation of persons or

property, or affecting or relating to the {ADD distribution of electricity or the ADD} production,

transmission, delivery, or furnishing of heat, light, {ADD or ADD} water or power, or the

conveyance of telephone or telegraph messages within this state, or for any service in connection

therewith, whereby the service shall, by any device whatsoever or otherwise, be rendered free, or

at a less rate than that named in the published schedules and tariffs in force as provided therein, or

whereby any service or advantage is received other than is herein specified. Any person, firm, or

corporation violating the provisions of this section shall be deemed guilty of a misdemeanor and,

upon conviction thereof, shall be punished by a fine of not less than fifty dollars ($50.00) nor more

than five hundred dollars ($500) for each offense.

39-2-19. Display of identification cards required. -- Every person employed by a public utility

company {ADD or nonregulated power producer ADD} doing business in this state whose job

requires the person to enter homes or business establishments for the purpose of installing,

repairing, servicing, meter reading, or other related activities, shall be required to display on the

person an identification card bearing the person's photograph during the performance of the

person's duties.

39-2-21. Residential condominiums and associations -- Charges for services, residential

rates. -- Public utilities {ADD distributing electricity or ADD} providing electricity, telephone

service, heat, light, {ADD or ADD} water or power produced, transmitted, delivered or furnished

shall charge residential condominium occupants or residential condominium associations for such

{ADD distribution service, ADD} heat, light, water or power, electricity or telephone service at a

residential rate and not a business, commercial or any other rate.

39-3-1. Services for which certificate of necessity required. -- No public utility {ADD

whether privately owned or a quasi public agency ADD} shall {ADD distribute electricity or

ADD} furnish or sell gas or electricity, except to another public utility or electric power or power

transmission company, in any town or city in which any other public utility is at the time {ADD

distributing electricity or ADD} furnishing or selling gas or electricity to the public generally, unless

the public utility desiring {ADD to distribute electricity or ADD} to furnish or sell gas or electricity

shall first have obtained a certificate from the division of public utilities and carriers certifying that

public convenience and necessity require the same. Nothing herein contained shall be construed to

require a certificate to be obtained as a condition of {ADD distributing electricity or ADD}

furnishing or selling gas or electricity in any town or city by any public utility which was actually

{ADD distributing electricity or ADD} furnishing or selling gas or electricity to the public generally

in the town or city on or prior to March 1, 1926 {ADD January 1, 1996 ADD} or by any

successor to a public utility. {ADD The division shall not grant any such certificate to any electric

distribution company if the electric distribution company that is distributing electricity in the town or

city offers to provide distribution service to all customers served by any nonregulated power

producer, whether affiliated or not, on comparable prices and terms approved pursuant to this title,

including the transition charge pursuant to 39-1-27.4. ADD}

{ADD 39-3-1.1. Purchasing cooperatives. -- ADD} {ADD Purchasing cooperatives may at

any time be organized consisting of any group of electricity consumers for the purpose of

negotiating for electric power from nonregulated power producers. Such purchasing cooperatives

shall be considered to be associations of electricity consumers organized solely for the purpose of

negotiating the purchase of electric power by members of the cooperative. Purchasing

cooperatives are specifically not required to be legal entities and are hereby prohibited from

engaging in resale of electric power. Electricity consumers will maintain individual accounts with the

nonregulated power producer with which a contract is concluded. Electricity consumers may

withdraw from a purchasing cooperative at any time by providing thirty (30) days notice to the

cooperative and to nonregulated power producers with which a purchasing cooperative has

reached an agreement. Nothing in this paragraph shall prevent a cooperative from becoming a legal

entity or utilizing a legal entity to negotiate for rates for the purchasing cooperative. ADD}

39-3-11. Notice of change in rates -- Suspension of change -- Hearings. -- (a) No change

shall be made in the rates, tolls, and charges which have been filed and published by any public

utility in compliance with the requirements of section 39-3-10, except after thirty (30) days notice

to the commission and to the public published as aforesaid, which shall plainly state the changes

proposed to be made in the schedule then in force, and the time when the changed rates, tolls, or

charges will go into effect. Whenever the commission receives notice of any change or changes

proposed to be made in any schedule filed under the provisions of section 39-3-10, the

commission shall hold a public hearing and make investigation as to the propriety of the proposed

change or changes. After notice of any investigation, the commission shall have power, by any

order served upon the public utility affected, to suspend the taking effect of the change or changes

pending the decision thereof, but not for a longer period than five (5) {ADD six (6) ADD} months

beyond the time when the change or changes would otherwise take effect ; provided, however,

that in the event that any hearing and/or investigation shall not have been completed at the

expiration of the five (5) month period, the commission shall have power by an order served upon

the public utility affected to further suspend the taking effect of the change or changes pending the

decision thereon, but not for a longer period than three (3) months beyond the expiration of the

first mentioned five (5) month period . Each hearing and investigation shall be conducted as

expeditiously as may be practicable, and with a minimum of delay. Within ninety (90) days after

the completion of any hearing, the commission shall make such order in reference to any proposed

rate, toll, or charge as may be proper. Notwithstanding the provisions of this section, the

commission shall periodically hold a public hearing and make investigation as to the propriety of

rates when charged by any public utility and shall make such order in reference to the rate, toll, or

charge as may be just. The hearing prescribed by this section may be held simultaneously with the

hearing prescribed by section 39-3-7. In the event of an appeal from an order of the commission

in any hearing under this section, the order shall remain in full force and effect during the pendency

of said appeal.

(b) Upon receipt from a common carrier of persons and/or property upon water of a notice of any

change proposed to be made in any schedule filed pursuant to section 39-3-10 , the commission

shall give notice as it may prescribe of the pendency of the proposal and of the time and place of

hearing thereon to the mayor and also any city manager of each city, and to the president of the

town council and also any town manager of each town in which the carrier picks up or discharges

passengers. The commission shall also publish a notice of the hearing at least ten (10) days prior to

the date thereof in a newspaper of general circulation in each city or town in which the carrier

picks up or discharges passengers. In all other respects, hearings and investigations with respect to

the proposals by the carriers shall be governed by the provisions of subsection (a) of this section.

(c) The Kent County water authority shall provide notice by certified mail of rate increase requests

to the several fire districts which purchase water from the authority.

{ADD (d) Costs incurred by electric distribution companies for filing rates, tolls and charges, for

participating in hearings and investigations prior to December 31, 2000 or for appealing

commission decisions rendered prior to December 31, 2000 pursuant to this section shall not be

included in the rates, tolls or charges established by the commission pursuant to this section.

ADD}

39-3-16. Security issues necessary to comply with municipal contracts. -- It shall be the duty

of the division to authorize on the best terms obtainable such issues of stocks, bonds, and other

evidences of indebtedness as shall be necessary to enable any public utility to comply with the

provisions of any contract made before April 30, 1936, between the public utility and any

municipality.

39-3-33. Rules of division. -- The division shall have power to make such reasonable rules as

will aid it in the administration and enforcement of chapters 1 to 5, inclusive, of this title.

{ADD 39-3-37.3. Informational notice on electric bills. -- ADD} {ADD Every electric

distribution company who shall charge for the distribution of electricity to any house, building,

tenement or estate shall conspicuously display upon the bill or statement for any customer the

following information:

(a) The total number of kilowatt hours consumed;

(b) the total cost of distributing the consumer power to the customer;

(c) transition charges;

(d) conservation costs;

(e) the total cost of transmitting the consumed power to the appropriate distribution site;

(f) all applicable credits;

(g) applicable street light rental costs;

(h) applicable taxes;

(i) the cost of power delivered; and

(j) all other costs, charges or fees added to the bill or statement. ADD}

39-20-4. Powers of foreign electric utilities. -- (a) Notwithstanding the provisions of sections

7-1.1-99 and 7-1.1-100, and any other provision of any general or special law relating to the

rights of foreign corporations to transact business in this state and to produce a certificate of

authority under chapter 1.1 of title 7 to transact business, limiting the powers, rights, and privileges

of a foreign corporation procuring a certificate, and establishing the duties, restrictions, penalties,

and liabilities imposed on a foreign corporation, but subject to the provisions of this chapter, a

foreign electric utility:

(1) Shall have the right to transact business in this state to the extent necessary or desirable to

exercise the powers set forth in section 39-20-3 in connection with electric generating facilities or

portions thereof located within this state or the product or service therefrom or securities issued in

connection with the financing of the facilities or portions thereof;

(2) Shall be entitled to procure a certificate of authority under chapter 1.1 of title 7 to transact

business; and

(3) Shall have within this state the powers set forth in section 39-20-3 in connection with electric

generating facilities or portions thereof located within this state or the product or service therefrom

or securities issued in connection with the financing of facilities or portions thereof{ADD . ADD} ;

provided, however, that the electric generating facility or portion thereof in connection with which

powers are exercised is owned, entirely or in part, by at least one domestic electric utility. If the

electric generating facility in connection with which the powers are exercised is principally owned

by a foreign electric utility which has as an affiliate a domestic electric utility, the affiliated domestic

electric utility shall participate in the ownership of the facility.

(b) Nothing in this section shall be construed to authorize a foreign electric utility to sell electricity

at wholesale or retail within this state unless:

(1) The sale is authorized under its charter or the general or special laws of this state other than by

this chapter; or

(2) The sale constitutes a sale of capacity and related energy from a specifically identified electric

generating facility within this state or a sale of economy, backup, or other energy therefrom. {ADD

Nonregulated power producers shall not be subject to this subsection (b). ADD}

39-22-1. Title. -- This chapter may be cited and referred to as the "R.I. Base Load Renewable

Resource Facilities Electricity Purchase Act".

39-22-2. Findings, purposes, and policy. -- The general assembly finds that it is in the best

interest of the state to reduce the state's dependence upon fossil fuel for its energy needs; and that

it is advisable to diversify energy producing systems and energy sources to ensure an adequate and

reliable source of energy for Rhode Island. The general assembly further finds that development of

reliable energy production facilities using renewable resources will have a beneficial impact upon

this state. The general assembly intends through this legislation to encourage the development of

base load renewable resource facilities.

39-22-3. Definitions. -- (a) Renewable resources. "Renewable resources" means resources that

are capable of being reproduced, replenished, or restored and shall include biomass, wood, water,

solid waste, solar, and wind but shall exclude nuclear fuel sources, coal, and oil.

(b) Base load renewable resource. "Base load renewable resource" means a facility or

combination of facilities at one site whose overall power production capacity is not below two (2)

megawatts and does not exceed eighty (80) megawatts of electricity, and which depends upon

renewable resources for its primary source of energy, and which guarantees an on-line time

reliability of eighty percent (80%) or greater. A base load renewable resource does not include

any facility owned by a public utility or a subsidiary of a public utility that owns or operates power

production facilities that generate power from renewable resources.

39-22-4. Public utilities study of conditions and rates. -- The public utilities commission shall

accomplish a study to determine appropriate conditions and rates for which each utility shall

purchase any electric energy or capacity produced within its service area by a base load

renewable resource facility. The findings of the study along with appropriate recommendations

shall be submitted to the general assembly by the chairperson of the public utilities commission not

later than February 28, 1985.

39-24-1. Filing by electric companies. -- Every electric company whose total annual sales of

electric energy in the preceding calendar year exceeds twenty (20) million kilowatt hours shall

submit every two (2) years to the public utilities commission a long-range energy plan for the ten

(10) year period subsequent to the date the plan is submit, and shall apprise the commission in the

interim of any changes which substantially affect the plan. The plan shall include the company's

annual peak-load forecasts, annual energy forecasts, proposed generating facilities, and proposed

major transmission lines (69 kilovolts or over). The plan shall include information on

demand-reduction measures, conservation and load management programs, cogeneration, and

small power production based on renewable resources. The filing shall include assumptions and

methodologies used by the company in formulating the plan.

SECTION 2. Section 42-98-9.1 of the General Laws in Chapter 42-98 entitled "Energy Facility

Siting Act" is hereby amended to read as follows:

42-98-9.1. Public notice and hearings on construction projects in cities and towns affected.

-- (a) Upon receiving a utility company application the board shall immediately notify in writing the

councils of the towns and cities affected by the construction.

(b) The board shall have at least one public hearing in each town or city affected prior to holding

its own hearings and prior to taking final action on the application. All details of acceptance for

filing in subsections 1 through 6 of section 42-98-8 shall be presented at town or city hearings for

public comment. {ADD When the subject of the application is a facility for the generation of

electricity, the town or city where the proposed facility would be located may request funding from

the applicant to perform studies of the local environmental effects of the proposed facility. The

expense of such studies shall not exceed the lesser of $100,000 or (.1%) of the estimated capital

cost of the proposed facility. If the applicant contests the relevance of the requested study, or

believes it to be redundant with studies already performed, the applicant may request a ruling from

the board whether such study is necessary and reasonably expected to produce relevant

information. The Board's ruling shall be conclusive and final, and shall not be the basis for an

interlocutory appeal, injunction or otherwise delay the board's processing of the application.

ADD}

(c) The applicant shall notify the citizens in towns and cities affected thirty (30) days prior to the

hearings, by certified mail, postage prepaid.

(d) The applicant shall notify abutting land owners individually in writing thirty (30) days prior to

the hearings, by certified mail, postage prepaid.

SECTION 3. This act shall take effect upon passage.