PUC Approves Electric Rate Hike After Contentious Hearing
Under the new rate households will see their bills increase on average by $50 per month
September 23, 2022
WARWICK, R.I. — State regulators approved one of the largest electric rate hikes in decades on Friday over the vocal opposition of advocates, community members and several elected officials.
The Rhode Island Public Utilities Commission, which regulates all utilities in the state, unanimously passed the 47% electric rate hike proposed by Rhode Island Energy. Under the new rate, which goes into effect Oct. 1, households will see their bills increase on average by $50.76 per month.
A proposed hike in gas bills, which has yet to be considered by the PUC, would see an increase of around 15% starting in November.
PUC chair Ron Gerwatowski, who at one point temporarily recessed the meeting due to protests from the assembled crowd in the hearing room, advised the public this might not be the final increase in utility prices.
“I hope everyone understands we’re looking at a future of rough waters, not just for this winter,” said Gerwatowski, “but the markets and price of power in this region from where we get our power is volatile, and I think we’re going to be facing lots of challenges in the region and here in Rhode Island.”
Advocates from the George Wiley Center, the Poor People’s Campaign, Sisters of Mercy, and the RI Coalition to Reduce Poverty gathered for the second time in as many weeks Friday morning to protest the major rate hike from Rhode Island Energy.
The mood on the front steps of the PUC building took on the tenor of a revival meeting, as speakers implored the commission to deny the rate hike. Priests, organizers, and community members invoked scripture, sang songs and chants, and warned public officials of the poverty that would ensue under the new utility bills.
“I do not think the people in that room heard us or understand the domino effect this will have,” said Pamela Poniatowski, an organizer with the Poor People’s Campaign. She continued, “the only way some people are going to have the money to pay for that is if they win the lottery.”
Warren resident Debbie Krauss told the crowd how expensive it became when her home had a power outage, estimating the value of food spoiled in her chest freezer at over $500. “I didn’t want to lose the contents of my chest freezer and the freezer attached to it, and it happened every single time [we lost power]. How about you pay me back first, how about that?”
Activists had gathered the previous week to testify to commissioners that people would have to choose between heating and electricity or other basic necessities like food, medicine, or rent if the new rate was approved.
Utility justice advocates are asking for reform, demanding the PUC cut the profit margin of Rhode Island Energy from 10% down to 6%. They also demanded a Percentage Income Payment Plan (PIPP), where low-income residents can pay a certain percentage of their income for their electric bill instead of a fixed rate, and for commissioners to reject the hike.
“It’s the Public Utility Commission, not the Corporate Utility Commission,” said Rep. David Morales, D-Providence.
Protesters filed into the building around 11:30 a.m. Friday, shortly after commissioners began their meeting to vote on the electric rate hikes. As commissioners began the formal process to vote on their agenda, activists disrupted the meeting, chanting for no new rate hikes. The meeting was swiftly recessed, while protesters expressed their concerns, sometimes forcefully, to the remaining commissioners, John Revens and Abigail Anthony.
Commissioners stressed to the crowd they were ultimately limited in their powers to reject the hike. Revens said the opposing parties during the evidentiary process acknowledged the utility had acted properly when formulating the new rates.
“They don’t buy [electricity] like when you go to the grocery store,” said Revens.
Gerwatowski re-started the meeting around 12:20 p.m. Police officers escorted half a dozen protesters out for continuing to disrupt the meeting but made no arrests. Morales was led out twice, the second time shouting “shame” at the commissioners.
Utilities in Rhode Island don’t make a profit by selling electricity to ratepayers. Under state law, the utility has to provide electricity under the prices they paid for it — they legally cannot make a profit from selling electricity; the costs are passed through onto the electric and gas rates themselves.
The profit instead is made on building out new infrastructure such as power lines, natural gas mains or hooking up new gas lines into homes or businesses. The PUC sets what that profit can be every three to eight years.
The utility also proposes rate changes twice yearly, for summer and winter, with the summer rates typically being cheaper than the winter rates, due to less demand for electricity and gas.
Applying rate changes every six months provides some buffering against volatile natural gas prices, because although roughly only half the state has a natural gas main for heat in winter, all electric ratepayers essentially use natural gas. According to ISO-New England, the nonprofit that manages the Northeast’s electric grid, 54% of all energy consumed in the region comes from natural gas plants.
Increase in natural gas prices — whether from supply shocks from the Russian invasion of the Ukraine, or greater demand globally for the fossil fuel — results in higher electric rate hikes.
Commissioners did approve some relief for low-income ratepayers on Friday. The PUC gave the go-ahead to Rhode Island Energy to distribute $32.5 million in electric bill credits and another $17.5 million in gas bill credits. The credits were part of the multi-million-dollar settlement agreement hammered out between the attorney general’s office and the PPL Corporation before it could buy Rhode Island’s utility assets from National Grid. The bill credits are expected to be applied by the company sometime in November or December.
The PUC also approved Gov. Dan McKee’s allocation of $3.8 million of Regional Greenhouse Gas Initiative (RGGI) funds to provide relief to low-income ratepayers. The governor estimated the funds would provide direct rate relief to 39,000 Rhode Islanders.
“We have effectively eliminated the impact for our most vulnerable constituents, and they will not see an increase in their overall electric bills compared to last winter,” the governor said in a statement.
Earlier this month Rhode Island Energy got the go-ahead from state regulators to forgive more than $47 million in arrearages. The utility debt forgiveness was another part of the attorney general’s settlement with PPL, and the company expects to credit customers whose accounts were 90 days delinquent or more sometime in October.
Activists remain undeterred. “When the [legislative] session starts in January we need to increase the pressure to pass the percentage income payment plan,” said David Veliz, director of the RI Interfaith Coalition to Reduce Poverty.
The new electric rates go into effect Oct. 1. The proposed natural gas rates for the winter have yet to be scheduled for a hearing, but are expected to go into effect Nov. 1.