‘Do I Want My Heat, or Do I Want My Health:’ Advocates Warn of Dire Effects of Proposed Utility Rate Increases
September 19, 2022
WARWICK, R.I. — Advocates are warning that lower-income Ocean State residents, many of whom already struggle to pay electric bills at the current rates, would suffer increased misery and deprivation from proposed new rates — which would represent one of the highest increases in electric rates in decades.
“Make no mistake, this rate increase will result in increased homelessness, and in people dying; that’s a reality you must face,” said the Rev. Dr. Donnie Anderson, an organizer with SAGE RI.
Earlier this year Rhode Island Energy, the dominant electric and gas utility in the state, announced ratepayers could expect to pay significantly more for energy costs this winter. The average electric bill would go up by $50.76 monthly, a 46% increase. Natural gas prices, which have been filed but on which a public hearing is yet to be scheduled, would increase annually by $227.23.
If approved, the new rates for electricity would go into effect Oct. 1.
State residents, activists and elected officials assembled at a meeting Friday of the state Public Utilities Commission to oppose the rate increase.
One protest sign summed up the tenor of the testimony: “Somebody’s hurting us and we aren’t going to be silent anymore.”
Ruth Madsen, an organizer with the Poor People’s Campaign, told PUC commissioners she was homeless for a decade, and under the proposed rates would be unable to afford higher utility bills and continue paying for prescription medicine on her fixed income.
“I have to choose right now, do I want my heat, or do I want my health?” said Madsen.
Rep. David Morales, D-Providence, told commissioners existing programs for low-income customers were woefully inadequate.
“The eligibility to qualify as a low-income utility customer is very stringent, it is essentially 60% of the area median income (AMI), therefore if you are an individual earning 75% of the AMI – if you are a family of four earning $75,000 – you cannot qualify for any of these programs,” said Morales. “We are not going to see actual relief for working people. We are going to see this cycle of debt being accumulated.”
Rhode Island Energy cites higher global demand and the Russian invasion of Ukraine as a key reason for soaring gas prices, according to a press release put out by the utility earlier this month.
“The New England region relies on global LNG (liquified natural gas) imports to meet winter demand, and these supplies are also in demand to meet European energy needs,” the utility wrote in a statement.
So far local ratepayers have been insulated from the spiking cost of energy worldwide. Liz Truss, prime minister of the United Kingdom, announced earlier this month her government would freeze household energy bills for up to two years as the country grapples with a cost of living crisis.
In Rhode Island, utility rates are decided twice yearly, once in the spring, and once again in the fall. The utility buys its electricity supply six months at a time, often well in advance, giving local ratepayers somewhat of a delayed effect of changes to energy supply.
The region’s electricity is still dictated by fossil fuels, even if homes do not have a natural gas supply line, and 48% of all electricity generated in the region comes from natural gas plants, according to data from ISO New England — by far the lion’s share of electricity generation.
Utility justice advocates have renewed their call for reform. The George Wiley Center, in comments submitted to the PUC, argued for decreasing the profit margin of utility companies down to 6%, implementing a percentage income payment program (PIPP), and having Rhode Island Energy absorb the increased cost of natural gas instead of passing it on to ratepayers.
“Billions of dollars you’ve had to come into the state,” said Camilo Viveiros, executive director of the George Wiley Center. “So we’re demanding that you have the money to eat this, whatever way you want to work it.”
In a statement before the public comment meeting started last week, PUC chair Ron Gerwatowski said the proposed rates were the single highest increase he’d seen in 35 years of experience in the energy industry.
“It is not surprising that most of the comments we’ve received before the hearing in writing have been asking us to deny it,” said Gerwatowski.
Gerwatowski said the commission was restricted in many of its actions. “The decision that we make at the commission cannot by law be based upon what we would like to do,” he said, “it must be based on evidence and the prevailing legal standards under RI law.”
Gov. Dan McKee has asked the PUC that the rate increase be spread out over the next 12 months in order to cushion the impact from the hike. The governor also announced last month he would transfer $3.8 million from Regional Greenhouse Gas Initiative Allocation Plan funds to provide direct rate relief for 39,000 low-income customers as a monthly credit, saving those customers an estimated $14 to $17 per month.
Earlier this year Rhode Island Attorney General Peter Neronha hammered out a settlement agreement with the Pennsylvania-based PPL Corporation as they sought to acquire National Grid’s then-Rhode Island assets.
As part of the agreement PPL promised to pay $32.5 million in rate credits for electric customers and forgive another $43.5 million in arrearages for customers who were 90 days delinquent on their utility bills.
“Those successes should mitigate some of the impact of increased energy supply charges this winter. But there is still more that the PUC can and should do, including giving ratepayers the option to defer payment of some of the increased supply cost until next year and re-allocating certain existing state funds to provide some relief,” said Neronha in a statement.
The PUC is expected to make a decision regarding the new electric rates later this month. The hearings regarding the new natural gas rates have yet to be scheduled but are expected to be held in October.