(a)  To promote economic development and the creation and preservation of employment opportunities within the state, each electric distribution company, except Pascoag Utility District, a quasi-municipal corporation, district, and subdivision of the state (“electric distribution company”), shall offer retail access from nonregulated power producers to all customers.

(b)  Through year 2009, and effective July 1, 2007, through year 2020, each electric distribution company shall arrange for a standard power-supply offer (“standard offer”) to customers that have not elected to enter into power-supply arrangements with other nonregulated power suppliers. The rates that are charged by the electric distribution company to customers for standard-offer service shall be approved by the commission and shall be designed to recover the electric distribution company’s costs and no more than the electric distribution company’s costs; provided, that the commission may establish and/or implement a rate that averages the costs over periods of time. The electric distribution company shall not be entitled to recover any profit margin on the sale of standard-offer power, except with approval of the commission as may be necessary to implement, fairly and effectively, system reliability and least-cost procurement. The electric distribution company will be entitled to recover its costs incurred from providing the standard offer arising out of: (1) Wholesale standard-offer supply agreements with power suppliers in effect prior to January 1, 2002; (2) Power-supply arrangements that are approved by the commission after January 1, 2002; (3) Power-supply arrangements made pursuant to § 39-1-27.3.1 and § 39-1-27.8; and (4) Any other power-supply-related arrangements prudently made after January 1, 2002, to provide standard-offer supply or to mitigate standard-offer supply costs, including costs for system reliability, procurement, and least-cost procurement, as provided for in § 39-1-27.7. Subject to commission approval, the electric distribution company may enter into financial contracts designed to hedge fuel-related or other variable costs associated with power-supply arrangements and the costs of any such financial contracts shall be recoverable in standard-offer rates. The electric distribution company’s standard-offer revenues and its standard-offer costs shall be accounted for and reconciled with interest at least annually. Except as otherwise may be directed by the commission in order to accomplish purposes established by law, any over recoveries shall be refunded to customers in a manner directed by the commission, and any under recoveries shall be recovered by the electric distribution company through a uniform adjustment factor approved by the commission. The commission shall have the discretion to apply such adjustment factor in any given instance to all customers or to such specific class of customers that the commission deems equitable under the circumstances provided that the distribution company recovers any under recovery in its entirety. Once a customer has elected to enter into a power-supply arrangement with a nonregulated power producer, the electric distribution company shall not be required to arrange for the standard offer to such customer except as provided in § 39-1-27.3.1. No customer who initially elects the standard offer and then chooses an alternative supplier shall be required to pay any withdrawal fee or penalty to the provider of the standard offer unless such a penalty or withdrawal fee was agreed to as part of a contract; however, no residential customer shall be required to pay a penalty or withdrawal fee for choosing an alternative supplier. Nothing in this subsection shall be construed to restrict the right of any nonregulated power producer to offer to sell power to customers at a price comparable to that of the standard offer specified pursuant to this subsection. The electric distribution company may not terminate an existing standard-offer wholesale supply agreement without the written consent of the division.

(c)  In recognition that electricity is an essential service, each electric distribution company shall arrange for a last-resort power supply for customers who have left the standard offer for any reason and are not otherwise receiving electric service from nonregulated power producers. The electric distribution company shall procure last-resort service supply from wholesale power suppliers. Prior to acquiring last-resort supply, the electric distribution company will file with the commission a supply acquisition plan or plans that include the acquisition procedure, the pricing options being sought, and a proposed term of service for which last-resort service will be acquired. The term of service may be short- or long-term and acquisitions may occur from time to time and for more than one supplier for segments of last-resort service load over different terms, if appropriate. All the components of the acquisition plans, however, shall be subject to commission review and approval. Once an acquisition plan is approved by the commission, the electric distribution company shall be authorized to acquire last-resort service supply consistent with the approved acquisition plan and recover its costs incurred from providing last-resort service pursuant to the approved acquisition plan. The commission may periodically review the acquisition plan to determine whether it should be prospectively modified due to changed market conditions. The commission shall have the authority and discretion to approve special tariff conditions and rates proposed by the electric distribution company that the commission finds are in the public interest, including without limitation: (1) Short- or long-term optional service at different rates; (2) Term commitments or notice provisions before individual customers leave last-resort service; (3) Last-resort service rates for residential or any other special class of customers that are different than the rates for other last-resort customers; and/or (4) Last-resort service rates that are designed to encourage any class of customers to return to the market. The electric distribution company’s last-resort service revenues and its last-resort service costs shall be accounted for and reconciled with interest at least annually. Any over recoveries shall be refunded and any under recoveries shall be recovered by the electric distribution company through a uniform adjustment factor approved by the commission. The commission shall have the discretion to apply such adjustment factor in any given instance to all customers or to such specific class of customers that the commission deems equitable under the circumstances provided that the distribution company recovers any under recovery in its entirety. Nothing in this section shall be construed to prohibit an electric distribution company from terminating service provided hereunder in accordance with commission rules and regulations in the event of nonpayment of this service. The commission may promulgate regulations to implement this section including the terms and conditions upon which last-resort service is offered and provided to customers.

(d)  If a customer being served by a nonregulated power producer pays any taxes assessed for electric service to the electric distribution company and the electric distribution company forwards such tax payment for the power portion of the bill to a nonregulated power producer for payment by the nonregulated power producer to the state, neither the customer nor the electric distribution company shall be liable for such taxes forwarded if the nonregulated power producer fails to remit such taxes to the state for any reason.