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State Energy Efficiency Policy Database

Rhode Island

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Advances the efficient use of energy in homes, buildings and industry in the northeastern United States.

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Summary

Rhode Island has consistently achieved high levels of energy savings through its energy efficiency programs, and has some of the most aggressive energy savings targets in the country. One investor-owned utility, Narragansett Electric (a National Grid Company), administers and operates a portfolio of energy efficiency programs for its customers, which account for 99% of statewide sales of electricity. A public utility, Pascoag Utility District, also operates programs.  The Rhode Island legislature unanimously passed sweeping legislation in 2006, which, among other things, established the state's energy efficiency resource standard (EERS).  The Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006 requires utilities to acquire all cost-effective energy efficiency. The act also establishes requirements for strategic long-term planning and purchasing of least-cost supply and demand resources, and three-year energy saving targets. Enacted in 2010, House Bill 8082 authorizes revenue decoupling for electric and natural gas utilities and requires utilities to submit proposals to implement these policies.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

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November 8, 2013


Customer Energy Efficiency Programs

Energy efficiency programs are offered by Rhode Island's regulated distribution utilities. The major investor-owned utility operating in the state, Narragansett Electric, is a National Grid Company and offers a comprehensive slate of programs that parallel National Grid's offerings in Massachusetts. Hearings are held once a year before the Rhode Island Public Utilities Commission to review program plans. A collaborative of stakeholders reviews these plans and makes recommendations to the RI PUC on the programs. Program costs are trued up annually each May.

The Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006 greatly increased the role and requirements for acquisition of demand-side resources—requiring utilities to acquire all cost-effective energy efficiency. The act also created a statewide natural gas conservation program.

Utility programs are funded by a "conservation and load adjustment factor"—a rider assessed on all customer rates established as part of Rhode Island's restructuring legislation. There is a minimum floor on this surcharge of 2 mills per kilowatt-hour for energy efficiency paid by customers of regulated distribution utilities as a non-bypassable public benefits fee specifically for energy efficiency programs.  The Rhode Island Public Utilities Commission annually reviews and authorizes utility demand-side management program plans, including budget amounts. The fee to support energy efficiency is a floor; actual spending amounts have exceeded this minimum requirement.

The most recent budgets for energy efficiency programs and electricity and natural gas savings can be found in the State Spending and Savings Tables on the left.

Links:

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November 8, 2013


Energy Efficiency Resource Standards

Summary: Electric: 1.7% in 2012, 2.1% in 2013, and 2.5% in 2014.  Natural Gas: ~0.4% of sales in 2011; 0.6% in 2012, 0.8% in 2013, and 1.0% in 2014.

The Rhode Island legislature unanimously passed The Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006 in June 2006. This act establishes a Least Cost Procurement mandate—requiring utilities to acquire all cost-effective energy efficiency with input and review from the Energy Efficiency and Resource Management Council (EERMC). Under the Least Cost Procurement mandate, National Grid is required to participate in strategic long-term planning and invest in all energy efficiency that is cost-effective and cheaper than supply on behalf of its customers. 

The act also established requirements for strategic long-term planning and purchasing of least-cost supply and demand resources. Utilities must submit 3-year and annual energy efficiency procurement plans, which offer program details, as well as spending and savings goals. Hearings are held once a year before the Rhode Island Public Utilities Commission to review program plans. The current 3-year savings goals for electricity are 1.7% in 2012, 2.1% in 2013, and 2.5% in 2014 (Docket 4284, 4295).

Rhode Island’s EERS policy also includes natural gas targets. Current savings goals are lower than originally proposed at 0.6% in 2012, 0.8% in 2013, and 1.0% in 2014 (Docket 4284, 4295)


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August 9, 2013


Alternative Business Models

In 2011 National Grid proposed a revenue decoupling mechanism which was approved by the Public Utilities Commission in 2012 (Docket No. 4206). Enacted in 2010, House Bill 8082 requires revenue decoupling for electric and natural gas utilities and requires utilities to submit proposals to implement these policies. 


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August 9, 2013


Reward Structures for Successful Energy Efficiency Programs

Rhode Island has had a shareholder incentive for electric and gas since 2005 and 2007, respectively. The Narragansett Electric Company, d/b/a National Grid (NG) can earn incentives for both electric (kWh) and gas (MMBtu) savings. There is a target base incentive rate of 4.4% for both electric and gas in 2010 applied to the eligible spending budget for 2010. The threshold performance level for savings by sectors is set at 60% of the annual energy savings goals for the sector. (Docket No. 3635)


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August 21, 2013


Energy Efficiency as a Resource

Rhode Island has a legislative requirement enacted in 2007 for electric and gas utilities to acquire all cost-effective energy efficiency that costs less than new energy supply as the first priority resource, placing it first in a utility’s resource “loading order” and greatly increasing the role of energy efficiency in long-term planning. The Comprehensive Energy Conservation, Efficiency and Affordability Act of 2006 also establishes new requirements for strategic long-term planning and purchasing of least-cost supply and demand resources. Utilities in Rhode Island file plans that include specific energy savings goals. These plans are reviewed by the Public Utilities Commission.


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August 13, 2013


Evaluation, Measurement & Verification
  • Cost-effectiveness test(s) used: TRC
  • Uses a deemed savings database: no

The evaluation of ratepayer-funded energy efficiency programs in Rhode Island relies on regulatory orders (Standards for Energy Efficiency and Conservation Procurement and System Reliability, Docket 3931 and Amendments to the Standards for Energy Efficiency and Conservation Procurement and System Reliability). Evaluations are mainly administered by the utilities. Rhode Island has formal requirements for evaluation articulated in Standards for Energy Efficiency and Conservation Procurement and System Reliability, Docket 3931 and Amendments to the Standards for Energy Efficiency and Conservation Procurement and System Reliability. Statewide evaluations are conducted.

Rhode Island relies on the Total Resource Cost (TRC) test and considers it to be its primary cost-effectiveness test. The benefit-cost tests are required for total program level screening. The rules for benefit-cost tests are stated in Standards for Energy Efficiency and Conservation Procurement and System Reliability, Docket 3931 and Amendments to the Standards for Energy Efficiency and Conservation Procurement and System Reliability.


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August 21, 2013