On June 26, 2024, Rhode Island Governor Daniel McKee (D) signed the 2024 Energy Storage Systems Act into law. The bill was sponsored by State Senators Dawn Euer (D), Susan Sosnowski (D), Alana DiMario (D), and Samuel Zurier (D). The legislation comes as Rhode Island aims to achieve a 100% clean energy future, positioning Rhode Island as a leader in the renewable energy transition at the state level.
Key Features of the Energy Storage Systems Act
- Establishes Incentives for Energy Storage: The bill provides incentives to electric distribution companies who enter into long-term contracts for newly developed renewable energy resources. Contracts approved by the Public Utilities Commission (PUC) before January 1, 2022, will receive an annual compensation of two and three-quarters percent (2.75%), while those approved after January 1, 2022 will receive an annual compensation of one percent (1%). The incentive is tied to actual annual payments made under the contracts through December 31, 2026.
- Sets State Energy Storage Targets: The bill sets goals for Rhode Island to reach 90 megawatts of energy storage by 2026, 195 megawatts by 2028, and 600 megawatts by 2033.
- Adopts Frameworks for a Storage Tariff and an Interconnection Tariff for Energy Storage: The Public Utilities Commission will engage with stakeholders to adopt a storage tariff and an interconnection tariff for energy storage systems. The storage tariff framework will address the ability of energy storage systems to charge from and discharge to the electric distribution system. The commission will also adopt a framework for an interconnection tariff for energy storage systems connected to the electric distribution system that recognizes the flexible operating characteristics of energy storage systems.
- Requires Public Utilities Commission to Publish Market Survey on Energy Storage Every Three Years: The commission will conduct a market survey every three years to assess the capabilities of storage technologies and whether those capabilities have the potential to meet the needs of, or provide net value to, the distribution system or the bulk power system. The commission will consider factors like time location-based constraints on the distribution and bulk power systems, including the economic, physical, and environmental impacts on ratepayer costs, while directing the procurement of energy storage solutions that are cost-effective, reliable, and environmentally sustainable.
- Allows Rhode Island Infrastructure Bank to Fund Energy Storage Systems: The Rhode Island Infrastructure Bank will develop programs to facilitate energy storage adoption across all sectors. Funding for these programs will come from state budgets, federal programs, private contributions, and application fees. The program’s focus is on deploying energy storage solutions for different customer classes, including residential and commercial sectors, and supporting systems connected to the distribution or transmission system. Financial assistance will be provided through grants, no-interest loans, and low-interest loans, specifically to support the co-location of energy storage with distributed energy resources and to facilitate their interconnection without additional distribution system upgrade costs.
- Storage Procurements: Enables the Rhode Island Public Utilities Commission to require distribution companies to procure cost-effective storage systems.
Relevant Resources
This article was edited by Grayson Schmidt of Ankura's Washington, DC office.
© Copyright 2024. The views expressed herein are those of the author(s) and not necessarily the views of Ankura Consulting Group, LLC., its management, its subsidiaries, its affiliates, or its other professionals. Ankura is not a law firm and cannot provide legal advice.
