(a)  The commission shall:

(1)  Develop and adopt regulations on or before December 31, 2005, for implementing a renewable energy standard, which regulations shall include, but be limited to, provisions for:

(i)  Verifying the eligibility of renewable energy generators and the production of energy from such generators, including requirements to notify the commission in the event of a change in a generator’s eligibility status;

(ii)  Standards for contracts and procurement plans for renewable energy resources to achieve the purposes of this chapter;

(iii)  Flexibility mechanisms for the purposes of easing compliance burdens; facilitating bringing new renewable resources on-line; and avoiding and/or mitigating conflicts with state-level source disclosure requirements and green marketing claims throughout the region; which flexibility mechanisms shall allow obligated entities to: (A) Demonstrate compliance over a compliance year; and (B) Bank excess compliance for two (2) subsequent compliance years, capped at thirty percent (30%) of the current year’s obligation; and

(iv)  Annual compliance filings to be made by all obligated entities within one month after NE-GIS reports are available for the fourth (4th) quarter of each calendar year. All electric-utility-distribution companies shall cooperate with the commission in providing data necessary to assess the magnitude of obligation and verify the compliance of all obligated entities.

(2)  Authorize rate recovery by electric-utility-distribution companies of all prudent incremental costs arising from the implementation of this chapter, including, without limitation: the purchase of NE-GIS certificates; the payment of alternative compliance payments; required payments to support the NE-GIS; assessments made pursuant to § 39-26-7(c); and the incremental costs of complying with energy source disclosure requirements.

(3)  Certify eligible renewable energy resources by issuing statements of qualification within ninety (90) days of application. The commission shall provide prospective reviews for applicants seeking to determine whether a facility would be eligible.

(4)   [Deleted by P.L. 2022, ch. 218, § 1 and P.L. 2022, ch. 226, § 1.]

(5)  Establish sanctions for those obligated entities that, after investigation, have been found to fail to reasonably comply with the commission’s regulations. No sanction or penalty shall relieve or diminish an obligated entity from liability for fulfilling any shortfall in its compliance obligation; provided, however, that no sanction shall be imposed if compliance is achieved through alternative compliance payments. The commission may suspend or revoke the certification of generation units, certified in accordance with subsection (a)(3) of this section, that are found to provide false information or that fail to notify the commission in the event of a change in eligibility status or otherwise comply with its rules. Financial penalties resulting from sanctions from obligated entities shall not be recoverable in rates.

(6)  Report, by February 15, 2006, and by February 15 each year thereafter, to the governor, the speaker of the house, and the president of the senate on the status of the implementation of the renewable energy standards in Rhode Island and other states, and which report shall include in 2009, and each year thereafter, the level of use of renewable energy certificates by eligible renewable energy resources and the portion of renewable energy standards met through alternative compliance payments, and the amount of rate increases authorized pursuant to subsection (a)(2) of this section.

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(b)  Consistent with the public policy objective of developing renewable generation as an option in Rhode Island, and subject to the review and approval of the commission, the electric distribution company is authorized to propose and implement pilot programs to own and operate no more than fifteen megawatts (15 MW) of renewable-generation demonstration projects in Rhode Island and may include the costs and benefits in rates to distribution customers. At least two (2) demonstration projects shall include renewable generation installed at, or in the vicinity of nonprofit, affordable-housing projects where energy savings benefits are provided to reduce electric bills of the customers at the nonprofit, affordable-housing projects. Any renewable-generation proposals shall be subject to the review and approval of the commission. The commission shall annually make an adjustment to the minimum amounts required under the renewable energy standard under this chapter in an amount equal to the kilowatt hours generated by such units owned by the electric distribution company. The electric and gas distribution company shall also be authorized to propose and implement smart-metering and smart-grid demonstration projects in Rhode Island, subject to the review and approval of the commission, in order to determine the effectiveness of such new technologies for reducing and managing energy consumption, and may include the costs of such demonstration projects in distribution rates to electric customers to the extent the project pertains to electricity usage and in distribution rates to gas customers to the extent the project pertains to gas usage.