Energy Efficiency Resource Standard

OriginRhode Island enacted legislation in 2006 requiring the state Public Utilities Commission (PUC) to establish standards for system reliability, energy efficiency and conservation procurement, including standards for energy supply diversification, distributed generation, demand response, and "prudent and reliable" energy efficiency and energy conservation measures. Additional legislation enacted in June 2012 (H.B. 8233) requires utilities to support the installation of efficient combined heat and power (CHP) systems at commercial, industrial, institutional and municipal facilities. Each utility must specify in its annual efficiency program plan how it will do so. Proposed plans must be approved by the state's Energy Efficiency and Resource Management Council.Electric Sales and Demand Reduction (and Natural Gas Sales Reduction)The specific standards and guidelines pursuant to legislation must be reviewed at least once every three years. In late 2023, the PUC adopted the following required triennial targets for its rate-regulated electric and gas utilities for the period 2024-2026. Year Electric Energy Savings(Lifetime MWh)Gas Energy Savings(Lifetime MMBtu)Electric Active Demand Response(MW) 2024 1,397,644 MWh 7,058,839 MMBtu 86.7 MW 2025 1,401,610 MWh 7,090,690 MMBtu 89.7 MW 2026 1,413,953 MWh 7,119,585 MMBtu 94.6 MW Each electric and natural gas distribution company must submit to the PUC for review and approval every three years -- beginning September 1, 2008 -- a plan for system reliability, energy efficiency and energy conservation procurement.Program Administrator TypeWhile the recommended standards and programs intended to meet the standard are initially vetted through the Rhode Island Energy Efficiency Council (EEC, formerly the Energy Efficiency and Resource Management Council (EERMC), the seats of which are comprised of a representative range of energy efficiency stakeholders, the programs are administered by Rhode Island's affected utilities.Cost Effectiveness and Program EvaluationRhode Island uses the Total Resource Cost test (TRC), one of the five "California tests" in the California Standard Practice Manual, as the primary test for evaluating the programs intended to meet the standard. Utility Cost Recovery ProvisionsDecoupling and Program Cost RecoveryRhode Island Statute 39-2.1.2 requires each electric distribution company to include a surcharge per kilowatt-hour delivered to fund demand-side management programs, which are implemented by the electric distribution company. The electricity surcharge took effect January 1, 2008, and will remain in place through December 31, 2028. Similarly, each gas distribution company must include a surcharge per decatherm (Dth) delivered to fund demand-side management programs. The gas surcharge took effect January 1, 2007, and will remain in place through December 31, 2028. The PUC determines the surcharge levels, which are not specified by the statute, for electricity and gas delivery.