23-82-6. Use of auction or sale proceeds.

(a) The proceeds from the auction or sale of the allowances shall be used for the benefit of

energy consumers through investment in the most cost-effective available projects that can reduce

long-term consumer energy demands and costs. Such proceeds may be used only for the following

purposes, in a proportion to be determined annually by the office in consultation with the council

and the board:

(1) Promotion of cost-effective energy efficiency and conservation in order to achieve the

13 purposes of § 39-1-27.7;

(2) Promotion of cost-effective renewable non-carbon emitting energy technologies in

Rhode Island as defined in § 39-26-5 and to achieve the purposes of chapter 26 of title 39 entitled

“Renewable Energy Standard”;

(3) Cost-effective direct rate relief for consumers;

(4) Direct rate relief for low-income consumers;

(5) Reasonable compensation to an entity selected to administer the auction or sale;

(6) Reasonable costs of the department of environmental management and office of energy

resources in administering this program, as well as other climate change, energy efficiency, and

renewable program efforts of the department of environmental management and office of energy

resources, which shall not in any year exceed three hundred thousand dollars ($300,000) or ten

percent (10%) of the proceeds from sale or auction of the allowances, whichever is greater.

Administrative funds not expended in any fiscal year shall remain in the administrative account to

be used as needed in subsequent years. The office of energy resources shall have the ability to apply

administrative funds not used in a fiscal year to achieve the purpose of this section. The funds

deposited into the administrative funds account shall be exempt from the indirect cost recovery

provisions of § 35-4-27;

(7) For fiscal year 2023 only, the office of energy resources shall transfer three million

dollars ($3,000,000) from unallocated auction proceeds to the executive climate change

coordinating council restricted receipt account to maintain funding for the existing electric vehicle

and electric bicycle incentive programs and to support other projects; and

(8) Provided however, effective for fiscal year 2024 and thereafter, sale of allowances

yielding in excess of four million five hundred thousand dollars ($4,500,000) per auction shall be

transferred to the Rhode Island office of energy resources, on behalf of the executive climate change

coordinating council, for climate change related initiatives. The executive climate change

coordinating council shall have exclusive authority to direct the use of these funds pursuant to §

42-6.2-3.1. The office of energy resources may act on behalf of the executive climate change

coordinating council to disburse these funds. Provided further, that any transfer of allowances in a

single fiscal year, pursuant to this section shall not exceed one million five hundred thousand

dollars ($1,500,000).

(b) Any interest earned on the funds so generated must be credited to the fund. Funds not

spent in any fiscal year shall remain in the fund to be used for future energy efficiency and carbon

reduction programs.

(c) Annually, the office, in consultation with the council and board, shall prepare a draft

proposal on how the proceeds from the allowances shall be allocated. The draft proposal shall be

designed to augment and coordinate with existing energy efficiency and renewable energy

programs, and shall not propose use of auction proceeds for projects already funded under other

programs. The proposal for allocation of proceeds in subsections (a)(1), (2), and (3) shall be one

that best achieves the purposes of the law, namely, lowering carbon emissions and minimizing costs

to consumers over the long term. The office shall hold a public hearing and accept public comment

on the draft proposal in accordance with chapter 35 of title 42 (the “Administrative Procedures

Act”). Once the proposal is final, the office shall authorize the disbursement of funds in accordance

with the final plan.

Effective for fiscal year 2027 and thereafter, as part of the allocation process, the office is

hereby authorized and directed to consult annually and coordinate with the Rhode Island public

transit authority in determining the total funding required to match federal funds to purchase zero-

emission buses with zero tailpipe emissions. Of the agreed-upon amount, fifty percent (50%) shall

be allocated from the auction proceeds, and the remaining fifty percent (50%) shall be from

authority sources.

(d) The office shall prepare, in consultation with the council and board, a report by April

15 of each year describing the implementation and operation of RGGI, the revenues collected and

the expenditures, including funds that were allocated to the energy efficiency and renewable energy

programs, and the individuals, businesses, and vendors that received funding, made under this

section, the statewide energy efficiency and carbon reduction programs, and any recommendations

for changes to law relating to the state’s energy conservation or carbon reduction efforts. The report

shall be made public and be posted electronically on the website of the office of energy resources

and shall also be submitted to the general assembly.

SECTION 2. Section 35-4-27 of the General Laws in Chapter 35-4 entitled "State Funds"

is hereby amended to read as follows: