[Adopted 5-22-2017 by Ord. No. 869[1]]
[1]
Editor's Note: This ordinance provided that it shall
be effective as of 1-1-2017.
Pursuant to Section 44-3-21 of the Rhode Island General Laws, as amended, renewable energy systems may be exempt from taxation. The Town Council finds that it would be in the public interest to exempt from taxation renewable energy systems as provided for in § 227-48.
There is hereby exempted from taxation:
A.
The additional cost or value of any renewable energy device which
is being utilized as a primary or auxiliary power system for the purpose
of heating or otherwise supplying the energy needs of the property
on which it is located, not to exceed 250KW.
B.
The additional cost or value of any renewable energy system in excess
of 250KW primarily utilized to produce energy for sale beyond the
property may be exempted only if a contractual agreement is approved
by the Town Council for the amount of property value to be exempt.
An application for a renewable energy system tax exemption must
be made to the Town Tax Assessor no later than March 15 each year
on forms to be provided by the Tax Assessor.
A.
Purpose.
(1)
The purpose of these regulations is to provide consistent and foreseeable
tax treatment of renewable energy to facilitate and promote installation
of grid-connected generation of renewable energy. The Office of Energy
Resources shall adopt a statewide tangible tax value and formula,
which shall be used by all municipalities utilizing ordinances and
resolutions for commercial renewable energy systems proposed within
their respective municipalities beginning on January 1, 2017.
(2)
All existing municipal renewable energy ordinances and/or resolutions
will need to be amended by town and city councils to reflect the requirements
of the regulation and the associated tax value and associated formula.
Municipalities that plan on adopting first-time ordinances and/or
resolutions for renewable energy will need to reflect the requirements
of the regulation and the associated tax value and associated formula
in their respective ordinances and/or resolutions.
(3)
For any renewable energy systems that are installed on residential
and manufacturing properties, the renewable energy equipment is exempt
from local taxation per RIGL 44-3-3, Subsections (48) and (49).
B.
Scope. These rules and regulations apply to towns and cities collecting
tangible taxes from commercial renewable energy systems pursuant to
RIGL § 44-5-3. These rules and regulations only apply to
towns and cities and do not apply to any other entities or instrumentalities
that may have tax-collecting authority but are not authorized to tax
renewable energy systems under RIGL § 44-5-3.
C.
Applicability. The adopted tangible tax value and formula shall take
effect on January 1, 2017. Any renewable energy resource projects
that have executed interconnection service agreements with the electric
distribution company as of December 31, 2016, shall not be subject
to the rules developed under § 44-5-3(c) and shall maintain
the tax status applicable before the rules are adopted, unless otherwise
agreed pursuant to § 44-3-9(a).
D.
Authority. These regulations arc promulgated pursuant to Chapter
44-57, and in accordance with Chapter 42-35 of the Rhode Island General
Laws of 1956, as amended, and grant the Office of Energy Resources
the authority to adopt, amend and implement such rules as may be necessary
to desirable to effectuate the purposes of this chapter.
E.
A/C
ELIGIBLE RENEWABLE ENERGY RESOURCES
$/PER kW
OFFICE
REG PROGRAM
NET METERING
VIRTUAL NET METERING
Definitions. For the purposes of these regulations, the following
terms shall have the following meanings:
Alternating current for the nameplate capacity of the commercial
renewable energy system.
Those technologies defined under RIGL 39-26-5.
The kilowatt/dollar/kilowatt amount adopted through the regulations
that municipalities will be compensated from a commercial renewable
energy system annually.
The Rhode Island Office of Energy Resources.
The Renewable Energy Growth Program where a renewable energy
system sells electricity through a fifteen- or twenty-year tariff
with National Grid.
A renewable energy system installed on a property that is
offsetting electric bills pursuant to RIGL § 39-26.4-1 et
seq.
A renewable energy system that is installed on private or
public property where the off-taker of the electricity is a municipality,
public school, state or quasi-state public entity pursuant to RIGL
§ 39-26.4-1 et seq.
F.
Tangible tax value for commercial renewable energy systems.
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The following formula and associated $5.00 per kW is adopted
by the Office in establishing the tangible tax value for commercial
renewable energy systems to provide reasonable compensation to a municipality
effective January 1, 2017. All such municipal ordinances and resolutions
assessing tangible tax on commercial renewable energy systems must
apply the following dollar value and formula.
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$ 5.00 kW x _Kilowatt AIC Capacity of the Commercial Renewable
Energy System =
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$______
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Example 1: A two-megawatt ground-mount solar system
that will be receiving a twenty-year tariff under the REG program
and selling the electricity back to National Grid.
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$5 kW X 2,000 kW AIC capacity of the commercial
renewable energy system =
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$10,000 annual revenue to the municipality
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$200,000 total revenue over the twenty-year REG
Program tariff to the municipality
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Example 2: A one-and-five-tenths-megawatt wind-turbine
system that will be receiving a twenty-year tariff under the REG Program
and selling the electricity back to National Grid.
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$5 kW X 1,500 kW AIC capacity of the commercial
renewable energy system =
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$7,500 annual revenue to the municipality
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$150,000 total revenue over the twenty-year REG
Program tariff to the municipality
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G.
Municipal tax waiver option for renewable systems not selling power.
(1)
Pursuant to § 44-3-21, a town or city council may elect
not to assess a tangible tax on all commercial renewable energy systems
or specifically on net-metered systems that are strictly designed
to offset and reduce electricity bills on a property and not developed
for commercial revenue purposes. A town or city council would need
to enact an ordinance to waive tangible taxes on those types of renewable
systems.
(2)
For any renewable energy systems that are installed on residential
and manufacturing properties, the renewable energy equipment is exempt
from local taxation per RIGL § 44-3-3, Subsections (48)
and (49).
H.
Reporting. All commercial renewable energy systems shall be required
to provide the municipality and respective tax assessor with a copy
of the initial interconnection application and formal interconnection
service agreement and any documentation of program enrollment (e.g.,
renewable energy growth or net metering enrollment forms), indicating
whether the commercial renewable energy system is either a REG, net-metered,
or virtual net-metered installation.
I.
Severability. If any provision of these regulations or the application
thereof, to any person or circumstance, is held invalid by a court
of competent jurisdiction, the validity of the remainder of the regulations
shall not be affected thereby.
J.
Application. The terms and provisions of these regulations shall
be liberally construed to permit the Office to effectuate the purposes
of state law, goals, and policies.
K.
Effective date.
(1)
The foregoing regulations, after due notice, are hereby adopted and
filed with the Secretary of State this November 16 of 2016, to become
effective January 1. 2017, in accordance with the provisions of Chapter
44-57, and in accordance with Chapter 42-35 of the Rhode Island General
Laws of 1956, as amended.
(2)
The adopted regulations and associated commercial renewable energy
system tangible tax value shall remain in effect from January 1, 2017,
through January 1, 2022, and the Town Council shall have the authority
to review and update these regulations if deemed warranted.
