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SB 2520

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

2026 Regular Session Introduced by Pete Appollonio and 9 co-sponsors

Rhode Island SB 2520 tightens base-rate advertising rules and paves the way for third-party administration of statewide energy efficiency programs.

04/28/2026 Committee recommended measure be held for further study
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Bill Summary · SB 2520

Summary of Bill SB 2520 (Rhode Island, 2026) – Duties of Utilities and Carriers

Overview

  • Bill: SB 2520
  • Session: 2026
  • Jurisdiction: Rhode Island
  • Introduced: February 13, 2026
  • Referred to: Senate Commerce
  • Purpose: Reform various financial and administrative aspects of public utilities (electric, gas, water) with emphasis on advertising prohibitions, energy efficiency funding, and the potential shift to third-party administration for statewide energy efficiency programs.

Main Purpose and Intent

  • Clarify and tighten how utilities allocate base-rate expenditures, especially prohibiting advertising as a base-rate item.
  • Revisit and potentially reduce or restructure funding mechanisms for demand-side management (DSM) and renewable energy programs.
  • Introduce flexibility for administering statewide energy efficiency programs, including the potential use of a third-party administrator (TPA) to execute these programs.
  • Sunset or modify existing obligations related to funding to the Rhode Island Infrastructure Bank.

Key Provisions and Changes

A. Advertising and Base Rates (Section 39-2-1.2)

  • Prohibition on base-rate recovery for advertising costs:
    • Utilities may not include expenses for advertising that promotes their product, service, or public image in base rates.
    • No base-rate recovery for advertising through subsidiaries, groups, associations, or individuals.
    • Advertising for public safety or conservation information that promotes the utility’s product/service may be recovered if appropriate.
    • Requires the Rhode Island Public Utilities Commission (PUC) to promulgate rules mandating disclosure of all advertising expenses.

B. Demand-Side Management (DSM) and Renewable Energy Program Funding (Electricity)

  • DSM funding charge for electric distribution companies (EDCs):
    • Effective Jan 1, 2008, a DSM charge per kilowatt-hour (kWh) is to fund DSM programs for 20 years.
    • Renewable energy program charge (0.3 mills per kWh) remains through Dec 31, 2028.
  • Establishment of two separate accounts for EDCs:
    • Demand-Side Management Account (funded by the DSM charge)
    • Renewable Energy Programs Account (administered by the Rhode Island Commerce Corporation per §42-64-13.2)
  • Commission oversight:
    • The PUC may adjust DSM and renewable charges after hearings.
    • Office of Energy Resources (OER) and/or Renewable Energy Program Administrator may seek an equitable portion of Renewable Energy Credits (RECs).
  • Definition and scope of “renewable energy resources”:
    • Includes eligible resources under state law, off-grid/on-grid Rhode Island projects, related R&D, and projects to implement these resources.
    • Solar energy tech for heating and hot water can be funded.
    • Fuel cells may be considered energy-efficiency tech within DSM.
  • Special rates for low-income customers may continue; new programs require Commission approval.

C. Administration of Renewable Energy Programs

  • Competitive contracting for administration:
    • The Commerce Corporation may contract for cost-effective administration of renewable energy programs, with competitive bids every three years.
    • The account for renewable energy programs would be maintained by the Commerce Corporation.

D. Gas DSM Funding (Gas DSM Charge)

  • Gas DSM charge:
    • Effective Jan 1, 2007, for 21 years, gas distribution companies must fund DSM through a per-deci-therm charge.
  • Gas DSM Account:
    • Separate account funded by the gas DSM charge; Commission authorization for administration to mirror electric DSM practices.
  • Coordinated administration:
    • Commission may coordinate electric and gas DSM programs, potentially via third-party administration after Mar 1, 2009.

E. Administrative and Financial Reporting

  • Annual reporting:
    • April 15 each year: OER and Energy Efficiency & Resource Management Council provide separate financial/performance reports on DSM programs, including sector contributions and recipients of funds.
    • Reports posted on OER and Council websites.

F. Rhode Island Infrastructure Bank Funding

  • IRA Bank transfers:
    • Beginning Aug 1, 2015, electric and gas DSM charges were to remit 2% of 2014 DSM charges to the RI Infrastructure Bank (except certain districts).
    • From Jan 1, 2022, $5 million per year of DSM funds to be allocated to the Infrastructure Bank for eligible projects (energy efficiency, renewables, clean transportation, etc.). The Bank must report annually on how funds are used.
  • SB 2520 would terminate the requirement to allocate $5 million annually to the Infrastructure Bank.

G. State Energy Efficiency Program Administration (Third-Party Administrator Option)

  • RFP for administrative administration:
    • OER, in coordination with the Energy Efficiency & Resource Management Council, must issue an RFP by Sept 30, 2023 for cost-effective statewide energy efficiency program administration.
    • After Jan 1, 2025, OER may issue additional RFPs for larger programs if the third-party administrator demonstrates potential net benefits.

  • Third-Party Administrator (TPA) framework:

    • If a TPA is recommended, the PUC must docket and rule on the matter.
    • Full cost recovery for the TPA must be provided if the Commission approves.
    • The TPA must comply with all applicable requirements and be subject to oversight akin to utility administration (§39-1-27.7).
    • If the TPA is selected and implements programs, it must develop the annual plan with OER and the Council, with a Council vote prior to filing for PUC approval.
    • The TPA must file annual program plans by Sept 30 of each year.
    • The TPA must provide requested data and be accountable to the same standards as utilities.

  • Contingency:

    • If OER and Council do not recommend a TPA, the electric and gas distribution companies continue to administer statewide energy efficiency programs.

Effective Date

  • The act takes effect upon passage.

Potential Impact

  • Utility Rate Structure:
    • Strengthens restrictions on using base rates to fund advertising; increases transparency about advertising costs.
  • Energy Efficiency and Renewables Funding:
    • Reforms the funding landscape for DSM and Renewable Energy Programs; creates more explicit governance and oversight.
  • Administration Model:
    • Opens the door to third-party administration for statewide energy efficiency programs, potentially shifting cost recovery, oversight, and performance accountability.
  • Infrastructure Bank Funding:
    • Terminates the mandatory annual $5 million transfer to the RI Infrastructure Bank, altering the financing mix for energy projects.
  • Reporting and Oversight:
    • Increases reporting requirements to improve transparency on funding flows and program performance.

Note: The bill is primarily a policy and administrative reform package; it does not specify new tax or ratepayer charges beyond existing DSM/REC funding mechanisms, but it does allow potential adjustments by the PUC and introduces the option of a third-party administrator for efficiency programs.

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

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