§ 39-2-1.4. Reasonable backup or supplemental rates. (a) Electricity produced by cogeneration and small power production can be of benefit to the public as part of the total energy supply of the entire electric grid of the state or consumed by a cogenerator or small power producer. Subject to compliance with applicable rules governing such service, public utilities shall provide transmission or distribution service to enable a retail customer to transmit electrical power generated by the customer at one location to the customer's facilities at another location, if the commission finds that the provision of this service, and the charges, terms, and other conditions associated with the provision of this service, are not likely to result in higher cost electric service to the utility's general body of retail and wholesale customers or adversely affect the adequacy or reliability of electric service to all customers.

(b) Each electric distribution company shall provide backup and supplemental service to any customer who is self-generating electricity and meets reasonable interconnection requirements designed to protect the distribution and transmission system. The commission shall ensure that backup and supplemental rates made, exacted, demanded or collected by any public utility from a customer who is self-generating shall be just and reasonable and may not be unduly discriminatory. Any backup and supplemental rate tariffs in effect as of May 2002 may remain in effect as designed through December 31, 2004. Commencing January 1, 2005, the backup and supplemental rates shall be cost based but may be discounted as provided for in subsection (c) of this section; provided, however, that the John O. Pastore Center power plant shall be exempt from said backup or supplemental rates.

(c) Notwithstanding the rate design criteria set forth in subsection (b) of this section, the commission may permit or require discounted backup distribution service rates in order to encourage economically efficient cogeneration or small power production projects if it finds these discounts to be in the public interest and/or contribute to system reliability procurement or least-cost procurement; provided, however, that any revenue not recovered by the electric distribution company as a result of these discounted distribution rates shall be accounted for and recovered in the rates assessed on all customers. The commission shall, in determining the public interest in distributed generating facilities, consider reduced environmental impacts, increased energy efficiency, reduced transmission losses and congestion, effects on electric system reliability and other factors the commission may deem relevant.

(d) The provisions of this section shall be effective as of January 1, 2005.

History of Section. (P.L. 2002, ch. 144, § 4; P.L. 2003, ch. 376, art. 15, § 1; P.L. 2004, ch. 595, art. 35, § 1; P.L. 2006, ch. 236, § 7; P.L. 2006, ch. 237, § 7.)