Rhode Island electric rates will go up again this winter. Here's what you can expect.

PROVIDENCE – Starting in October, electric rates for most Rhode Islanders will approach last winter’s record highs under a proposal filed this week by the state’s dominant utility.

Rhode Island Energy proposes raising the rate for residential customers during the six-month period from Oct. 1 to March 31 to 17.7 cents a kilowatt hour, only fractionally lower than the same period last winter, when rates reached their highest point on record in Rhode Island.

The new rates, if approved, as expected, by the PUC, would affect customers on Rhode Island Energy’s default service, which is also known as last-resort service. Customers in Providence, Barrington, Newport and other communities that are on community aggregation electric plans, or those who independently signed up with alternative suppliers, will not be subject to the new rates. Those customers account for about 30% of Rhode Island Energy's distribution customer base.

More on community electric plans: Get a notice about a community electric program in the mail? Here's what to know about it.

How much will Rhode Island electricity rates increase?

For the typical household that uses 500 kilowatt hours a month, bills, when delivery fees, taxes and other costs are accounted for, will climb by 24%, or about $32.

That’s lower than the dramatic jump of nearly 50% in monthly bills that customers shouldered in 2022, but for the most part only because current rates are higher than they were last summer. According to filings made with the state Public Utilities Commission, the typical residential bill would rise to $166 a month, a total about equivalent to last winter.

Why are electricity rates going up in RI?

Rates typically come down during the warm-weather period from April 1 to Sept. 30 when demand drops for natural gas, a primary fuel both for home heating and electricity generation. But because of a number of factors – including inflation and the impact of the war in Ukraine on fossil-fuel markets, as well as the way Rhode Island Energy staggers energy purchases – rates didn’t drop as much this year.

More: In making the shift to electric vehicles, RI lags its neighbors. Can it catch up?

And for the same reasons, rates are to remain abnormally high at least through next spring.

“As anticipated, this upcoming winter’s supply prices are on par with what we experienced last season,” Dave Bonenberger, president of Rhode Island Energy, said in a statement. “We all saw in our own homes and businesses how these commodity prices can impact a bill, so it’s more important than ever that customers become familiar with ways they can reduce their energy use and know about the resources available to them to help manage energy costs in the coming months.”

The proposed rate increases are tied entirely to wholesale energy prices, which Rhode Island Energy, under state law, must pass on to customers without a mark-up. The utility is allowed to profit only on the costs of delivery.

As part of the proposal, a customer charge will go back down to its usual $6 a month. The charge was doubled to $12 during this current billing cycle to make up for the PUC’s decision to suspend it last winter to help ease the burden on ratepayers.

Last winter’s rates were so high mostly because of volatile global energy markets. Because New England is so dependent on natural gas for power generation, when gas prices climb – as they did last year on the back of demand in Europe for liquefied supplies – wholesale electric prices also go up.

In its filing with regulators, Rhode Island Energy said that customers are still feeling the effects of those increases because the company purchases much of its supplies well in advance.

“As those procurements from last year’s high market period phase out, if the wholesale energy market prices continue to fall, the rate would be expected to decrease,” Rhode Island Energy said in the documents submitted to the PUC. “Such prospective conclusions are subject to the results from the company’s upcoming auctions, translated from the wholesale market.”

This article originally appeared on The Providence Journal: RI Energy customers can expect 24% jump in bills this winter