Bill
HB 7889
Separates generation ownership from distribution, enabling retail access and market-based pricing while regulators oversee transfers and create nondiscriminatory transmission and d
HB 7889 (Rhode Island, 2026) — Summary
Purpose and intent
- This act establishes a comprehensive restructuring framework for electric utilities in Rhode Island, with the central goal of separating ownership of generation from distribution, expanding retail access to nonregulated power producers, and facilitating an eventual transition away from traditional all-requirements wholesale arrangements. It aims to position the state for retail competition and market-based pricing while maintaining regulatory oversight.
Key provisions and changes
1) Electric distribution companies must file restructuring plans
- Each electric distribution company is required to file a plan with the Public Utilities Commission (PUC) to transfer ownership of generation facilities to an affiliated nonregulated power producer (affiliate). Transmission facilities may also be moved to an affiliated electric transmission company at book value (net of depreciation and deferred taxes), but transfers are not mandatory.
- Generation assets transferred to nonregulated affiliates must be priced at their book value (net of depreciation and deferred taxes) as of the transfer date.
- Tariffs: Transmission and distribution tariffs must be filed with the appropriate regulators (FERC for transmission, the Rhode Island PUC for distribution) and must ensure nondiscriminatory access for wholesale and retail customers and nonregulated producers. Terms must align with FERC standards where applicable.
2) PUC review and approvals
- The PUC has six months to review the restructuring plan. If compliant, it will authorize transfers, securities issuances, and affiliate transactions and grant necessary regulatory approvals.
- All existing state and local rights and approvals tied to the plant/equipment are deemed transferred with the assets upon authorization.
- If a wholesale supplier’s transfer is to a nonaffiliate for market-valuation purposes, the transfer may be made directly to the nonaffiliate.
3) Implementation timeline and retail access
- Electric distribution companies must implement restructurings and terminate all-requirements wholesale contracts, enabling retail access for all Rhode Island customers with a standard offer within three months after retail access becomes available to 40% of New England kilowatt-hour sales. The commission can extend this timeline if needed for reasonable implementation.
4) Post-restructuring ownership and operations
- After complete implementation, electric distribution companies may not sell electricity at retail or own/control generating facilities (though assets may be owned by affiliates). However, facilities acquired after January 1, 2025 may still be owned by the distribution company if specific conditions are met.
- The former wholesale power supplier becomes a nonregulated power producer and may sell generated power on wholesale or retail markets. They and their affiliates may pursue exempt wholesale generator status under federal law.
5) Environmental and cost-recovery considerations
- The act anticipates limited in-state air-emission reduction requirements due to Rhode Island’s current emission levels. Where a wholesale supplier receives termination fees and owns fossil-fueled generation located in another state with stricter emission standards, cooperation with environmental authorities is mandated to develop cross-state emission reduction plans.
- Quasi-municipal electric distribution systems (e.g., those that purchase Niagara/St. Lawrence hydro) may seek exemptions from certain transfer requirements if deemed in the public interest.
6) Last-resort provision and pricing
- The standard offer and last-resort service framework remains in place, with the distribution company authorized to procure last-resort supply through approved plans and to recover associated costs. The commission may approve flexible tariff conditions and rates to reflect market changes and public-interest considerations.
- Tax payments associated with last-resort service handled through the distribution company that forwards taxes to nonregulated producers are protected from customer or distributor liability if the producer fails to remit.
Definitions and scope
- Applies to electric-generating facilities owned or operated by nonregulated producers, domestic electric utilities, and their affiliates, with facilities generating at or above 500 MW (and certain modified older facilities) as of 2025.
- Distinguishes between domestic electric utilities and foreign utilities, and clarifies regulatory authority under the Public Utilities Commission.
Effectiveness
- The act takes effect upon passage.
Overall impact
- Establishes a structured path to separate generation ownership from distribution, create tariffs and access rules for nondiscriminatory transmission/distribution use, and implement retail access. It also sets the stage for a transition away from all-requirements wholesale arrangements, affecting utility ownership structures, market participants (including former wholesale suppliers), and regulatory oversight in Rhode Island.
Compiled from official sources — confirm details with the bill’s official record.
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