Senate Bill 2645 Substitute A would amend Rhode Island law governing electric restructuring, last-resort service, and ownership of electric-generating facilities. Under the bill, owning, operating, constructing, or acquiring generating facilities or energy storage systems on or after January 1, 2025 would not violate the state's restructuring provisions. The measure was introduced in February, recommended for passage as Substitute A in early June, and then recommitted to the Senate Commerce Committee on June 9, a signal that the central questions it raises remain unresolved. The bill does not fully reverse restructuring. It creates an opening.
Why Restructured States Are Revisiting Utility Generation Ownership
Rhode Island sits in a restructured electricity market. Under restructuring, distribution utilities deliver power and maintain local infrastructure while generation is supplied through competitive markets. The model was designed to bring market discipline to electricity supply and lower costs through competition. It worked reasonably well in a period of stable demand and adequate generation capacity. The current environment is different. Demand is climbing from data centers, electrification, and manufacturing growth. Competitive markets in some regions have not brought enough new generation online fast enough to keep pace. And storage, which is now central to integrating renewables and managing peak loads, does not fit cleanly into frameworks built around dispatchable fossil generation.
Rhode Island has already committed to 90 megawatts (MW) of energy storage by 2026, with longer-term targets through 2033. The state Office of Energy Resources has identified storage as a tool for reducing reliance on fossil-fueled peaking plants, supporting renewable integration, and improving grid resilience. Whether utilities can own and operate those systems is exactly what SB 2645 is deciding. Maryland faced the same question through Senate Bill 951 in 2025, where the Office of People's Counsel noted that existing law already allowed the Public Service Commission to permit utility generation investments to meet anticipated demand for standard-offer service, subject to cost recovery review.
The Risk Distribution Question Is What Makes This Hard
Merchant generation places market and cost-overrun risk on private investors. Utility-owned generation shifts more of that risk to customers through regulated rates. That distinction is what makes the policy design question genuinely difficult, not just politically contested. If a utility builds storage or generation and the project runs over budget, ratepayers absorb the difference. If a competitive developer does the same, shareholders do. Utility ownership tends to move projects faster and ties them more directly into distribution planning. But competitive markets can produce lower costs — when they're actually working.
SB 2645 also includes labor standards for construction of electric-generating facilities by distribution companies. Projects of $1,000 or more would be subject to prevailing wage requirements. Projects of $1 million or more would require at least 15% of labor hours from registered apprentices, with exceptions, and would require labor peace agreements for operations and maintenance. The bill's recommitment to committee suggests those provisions, alongside the core generation ownership question, need further negotiation before a floor vote.
For energy managers, facilities teams, and procurement professionals tracking utility regulation in restructured states, Rhode Island's debate reflects a structural question that is not going away. The electricity frameworks built in the late 1990s were designed for a different grid. That grid is gone.
