Despite protests, winter electric rate hikes approved, but some will see a decrease

WARWICK – Rhode Islanders will see a big increase in their electric bills this winter after utilities regulators on Friday approved a rate hike requested by the state’s largest energy company.

The state Public Utilities Commission unanimously approved the request by Rhode Island Energy to more than double the cost of electricity from the current summer period to the six-month cycle that starts Oct. 1.

But the utilities commission also took steps to temper the bill impact on the company’s approximately 500,000 electric ratepayers, which, when delivery and other costs are accounted for, was originally estimated to be about a 47% increase, or $51.95 for the typical residential customer that uses 500 kilowatt hours a month.

How impact of rate increase will be reduced for customers

The commission’s three members voted to defer collection of a fixed $6 monthly customer charge until after the winter rate period ends on Apr. 1. They also approved use of a bill credit secured by Attorney General Peter Neronha’s office in a settlement that cleared the way for the Narragansett Electric Company to become Rhode Island Energy last spring. The credit amounts to $63.72 per account.

Together, the credit and the suspended customer charge will reduce the impact of the rate increase by about a third for most residential customers. Instead of paying an additional $312 over the winter period, the typical ratepayer will see an increase of about $212. When compared to last winter, the difference will be even smaller.

Low-income customers who pay reduced rates will experience a deeper cut, because the commission approved Governor Dan McKee’s proposal to also give them a total of $3.8 million from Rhode Island’s share of revenues from a regional cap-and-trade program to reduce power plant emissions.

With that money factored in, the total increase for a qualified low-income accountholder over the six-month period will be about $130, meaning they’ll actually be paying less than what they did last winter.

Reasons for expected rate hike

Rates fluctuate in New England, going down in the summer and up in the winter following the demand curve for natural gas, a major fuel for power generation and heating in the region. But rates are reaching higher than ever before this year, not only in Rhode Island but also in Massachusetts, Connecticut and other states.

A hefty rate hike had been expected for months as Rhode Island Energy was confronted with higher and higher wholesale prices as it tied up the final portions of supply needed to meet Rhode Island’s demand this winter. The company, the commission and independent experts have attributed the rising electric costs experienced here and elsewhere to inflation and a global energy crunch caused by the war in Ukraine.

'You heard us but you didn't listen'

Approval of the rate increase came over the protests of advocates for low income customers who erupted after the commission concluded that Rhode Island Energy had complied with the energy procurement required by law, all but assuring that the rate increase would be ratified. As protestors shouted “You heard us, but you didn’t listen,” PUC chairman Ron Gerwatowski abruptly recessed the meeting.

For the next half-hour, protestors aired their grievances while first commission member John Revens and then Gerwatowski tried to talk to them about allowing the meeting to continue.

“We have limited authority to what we can and can’t do,” Revens said.

That’s because the rate hike reflects wholesale electric prices and, by law, includes no mark-up for Rhode Island Energy.

But those in the crowd were unconvinced by the arguments made by the commission.

“The law does not say that the PUC must vote yes,” state Rep. David Morales, D-Providence, responded to Revens.

After several of the protestors were escorted by police from the meeting room inside the PUC’s offices in Warwick, the meeting restarted.

Higher rate hike proposed for Massachusetts

It may be cold comfort to Rhode Islanders, but the situation could be worse. Just this week, National Grid filed a proposal in Massachusetts to raise the electric rate to 33.8 cents per kilowatt hour, nearly twice the rate of 17.8 cents per kwh approved on Friday in Rhode Island.

The difference is because Rhode Island requires more supply to be purchased well in advance of when it’s needed. That is offering some protection to Rhode Islanders this winter, but Gerwatowski warned that expiring contracts will have to be replaced in the coming months and prices will still be inflated.

“I am concerned that next winter could be higher,” he said.

This article originally appeared on The Providence Journal: Rhode Island Energy has winter electric rate hikes approved