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SB 2516

AN ACT RELATING TO PUBLIC UTILITIES AND CARRIERS -- DUTIES OF UTILITIES AND CARRIERS

2026 Regular Session Introduced by Pete Appollonio and 8 co-sponsors

The bill shifts funding and administration of energy efficiency, DSM, and renewable programs from utilities to state oversight or a potential third‑party administrator.

04/28/2026 Committee recommended measure be held for further study
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Bill Summary · SB 2516

Summary of Bill SB 2516 (Rhode Island, 2026)

Title

AN ACT RELATING TO PUBLIC UTILITIES AND CARRIERS -- DUTIES OF UTILITIES AND CARRIERS

Purpose and Intent

  • The bill proposes significant changes to how public utilities (electric, gas, water) fund and administer demand-side management (DSM) and renewable energy programs.
  • It would repeal the existing energy efficiency charge (and related mechanisms) and restructure the administration and funding of energy efficiency, renewable energy, and related programs.
  • The act aims to reallocate control over DSM and renewable energy funding and potentially shift program administration from utilities to a third-party administrator (subject to certain conditions).

Key Provisions and Changes

(a) Advertising prohibitions in base rates

  • Public utilities may not include in their base rates any expenses for advertising that promotes the use of their product or service or the public image of the industry.
  • Public utilities may not fund advertising for subsidiaries, groups, or individuals if included in base rates.
  • Advertising, informational, or educational materials that promote public safety or conservation of the utility’s product are exempt from this prohibition.
  • The Rhode Island Public Utilities Commission (PUC) would promulgate rules requiring full disclosure of all advertising expenses.

(b) Electric DSM and Renewable Energy Charges and Accounts

  • Starting Jan 1, 2008 (for 20 years), each electric distribution company (EDC) must include a charge per kilowatt-hour (kWh) to fund DSM programs.
  • A separate 0.3 mill per kWh charge for renewable energy programs remains in effect until Dec 31, 2028.
  • Two separate accounts must be established and maintained (post-July 1, 2007):
    • A DSM account funded by the electric DSM charge (administered by the distribution company under PUC oversight).
    • A Renewable Energy Program account administered by the Rhode Island Commerce Corporation (RICC) for developing and promoting renewable energy programs.
  • The PUC may, after notice and a public hearing, adjust these charges and determine appropriate rates.
  • The state’s Office of Energy Resources (OER) and/or the Renewable Energy Programs administrator may seek to obtain an equitable portion of Renewable Energy Credits/Certificates from private projects funded by these programs.
  • Renewable energy resources include a broad set of technologies and activities defined and used to promote Rhode Island-based projects; solar heating or hot water technologies may also be funded. Fuel cells may be treated as an energy efficiency technology within DSM.

(i) Coordination and Administration of Funds

  • The OER and the Energy Efficiency and Resources Management Council (EERMC) can seek to hire a third-party administrator for state-wide energy efficiency programs, subject to competitive bidding.
  • If a third-party administrator is chosen, the electric and gas distribution companies would transfer relevant funds to the third party, with cost-recovery aligned to the approved contract and budget.

(j) Allocation for Administrative Costs

  • From the DSM funds, an annual allocation (starting Jan 1, 2007) may be set aside for the Energy Efficiency and Resource Management Council’s administration and related activities (limited to 3% of DSM funds).

(k) Reporting

  • Annual April 15 reporting requirements for the OER and EERMC concerning DSM program funding, recipients, and administrative expenditures.
  • Reports to be posted on the OER and EERMC websites.

(l) Infrastructure Bank Contributions (Electric)

  • From Aug 1, 2015 onward, two percent (2%) of the 2014 electric DSM charges are to be remitted to the Rhode Island Infrastructure Bank (for all electric distribution companies except two named entities).

(m) Infrastructure Bank Contributions (Gas)

  • From Aug 1, 2015 onward, two percent (2%) of the 2014 gas DSM charges are to be remitted to the Rhode Island Infrastructure Bank.

(n) New Funding to Infrastructure Bank (2022)

  • Beginning Jan 1, 2022, the PUC must allocate $5,000,000 annually from DSM funds to the RI Infrastructure Bank.
  • These funds may be used for energy efficiency, renewable energy, clean transportation, clean heating, energy storage, or DSM project financing administered by the Infrastructure Bank.
  • The Infrastructure Bank must report annually on how these funds were used.

(o) State Energy Efficiency Program Administration

  • The OER, in coordination with the EERMC and with input from the PUC and Division of Public Utilities and Carriers, must issue a request for proposals (RFP) for cost-effective statewide energy efficiency program administration no later than Sept 30, 2023.
  • A draft RFP must undergo at least one technical session at the PUC prior to issuance.
  • The OER and EERMC evaluate proposals to determine whether a third-party administrator or the utilities should administer statewide energy efficiency programs.
  • After Jan 1, 2025, additional RFPs may be issued for programs administered by large electric or gas distribution companies with 100,000+ customers.
  • If a third-party administrator is selected:
    • The Commission must approve the arrangement and ensure full cost recovery under the contract.
    • The third-party administrator would be subject to the same requirements as utilities under existing energy efficiency and procurement standards.
    • The third-party administrator would prepare and file the annual state energy efficiency program plan by Sept 30, 2024, and annually thereafter.
    • The third-party administrator must cooperate with the OER, EERMC, DPUC, and PUC, providing data as requested.
    • If the OER does not recommend a third-party administrator, the electric and gas distribution companies shall continue to administer statewide energy efficiency programs.

Effective Date

  • The act takes effect immediately upon passage.

Explanatory Note (Summary)

  • The bill would repeal the energy efficiency charge and significantly rework how energy efficiency, demand-side management, and renewable energy programs are funded and administered in Rhode Island.
  • It emphasizes transparency in advertising expenses and expands the framework for third-party administration of efficiency programs, with ongoing oversight by state agencies and the PUC.

Potential Impacts

  • Utilities: Potentially reduced ability to classify advertising as recoverable base-rate costs; more detailed disclosure required.
  • Ratepayers: DSM and renewable energy charges could be set and adjusted by the PUC; potential changes in bill impacts depending on administration method (utility vs. third-party).
  • Renewable energy programs: Greater emphasis on third-party administration, competitive procurement, and standardized criteria for project ranking.
  • Public authorities: Expanded powers for OER, EERMC, and RI Infrastructure Bank in financing and overseeing efficiency and renewable projects.
  • Transparency: Mandatory public reporting and disclosure of advertising and program expenditures.

Note: This summary reflects the bill text as introduced (SB 2516, 2026) and does not represent final legislative action or amendments.

Compiled from official sources — confirm details with the bill’s official record.

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