RI electricity rates may drop in April, but here's why next winter's rates may be higher
PROVIDENCE – Rhode Islanders can expect a reprieve on their electric bills starting next month.
Rhode Island Energy, the state’s dominant electric utility, has filed a proposal with regulators that would see the bill for the typical residential customer who uses 500 kilowatt hours a month drop by 24%, to $112. The new rates would take effect April 1 and remain in place until Sept. 30.
“For the families and businesses we serve, the proposed rates should be welcome news,” said Dave Bonenberger, president of Rhode Island Energy.
While the energy rate is set to come down in April, at 10.7 cents per kwh it would still be unusually high for the six-month warm-weather period. In the same period last year, the rate was 7.6 cents per kwh. Over the three previous years, it was 7.7 cents, 8.3 cents and 9.2 cents, respectively.
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How high were Rhode Island's electric rates in the winter?
The rate spike this past winter was particularly pronounced, not only in Rhode Island, but also in Massachusetts, Connecticut and other states in the region, with inflation and the war in Ukraine pushing up the price of gas to astronomical levels.
Market forces drove the base electric rate for most customers in Rhode Island up to 17.8 cents per kilowatt hour, more than double what it was in the summer and the highest on record going back at least to 2000. At the time, Bonenberger described the price as “something we’ve never seen before.”
It prompted an unprecedented move by the state Public Utilities Commission to defer collection of a customer charge. The commission also approved use of a bill credit secured last year as part of the transaction in which Pennsylvania-based PPL Corporation bought the Narragansett Electric Company and renamed it Rhode Island Energy.
The new normal: RI electric rates surging in winter, falling in spring
The proposed rate decrease was expected, as it follows the pattern that Rhode Islanders have grown used to in recent years. Electricity rates go up in October on the back of increased demand for natural gas, a critical fuel for electric generation and heating in New England, and drop again in April when gas usage starts to ease up.
The new proposal is currently before the PUC; a public hearing is set for next Tuesday at 6 p.m. at the commission’s offices in Warwick. Rhode Island Energy has made other proposals in separate filings that would also affect customer bills. If they win approval, customers would see a smaller overall reduction in their bills.
The higher-than-normal rate may not bode well for next winter. Because Rhode Island Energy staggers its contracts, buying much of its supply well in advance of when it’s needed, customers in the state have been somewhat shielded from wholesale prices that have led to even higher electric rates in Connecticut and Massachusetts.
In September, when the PUC approved the rates for last winter, chairman Ronald Gerwatowski warned Rhode Islanders about next winter. Rhode Island Energy’s Bonenberger also had words of caution for customers.
“Higher electricity prices are likely to remain an issue unless – or until – there’s a fundamental shift in market forces,” he said.
This article originally appeared on The Providence Journal: Rhode Island electricity prices: RI Energy to drop prices in April
