PUC Hears Dire Predictions Over Proposed Electric Rate Hike
September 18, 2023
WARWICK, R.I. — As rain continued to fall heavily across the state Wednesday, a different kind of storm was brewing before the Rhode Island Public Utilities Commission.
Residents, ratepayers, and utility justice advocates echoed the same dire message many of them had impressed on the commissioners last year: raising the electricity rates would push thousands of Rhode Islanders into poverty and cause further misery for thousands more.
“My family spends a lot of money already on food, medical expenses, gas, and all the necessary stuff for survival,” said Daniel Benitez, a high school student from Pawtucket. “We can’t afford a rate increase in electricity.”
Earlier this summer, Rhode Island Energy, the utility company that provides electricity for more than three-fourths of the state, announced it was raising the winter rates for electricity and gas starting Oct. 1. A customer using an average of 500 kilowatt-hours of electricity a month can expect an increase of $32.29 on their utility bill, a 24% bump. Low-income customers are expected to see an average increase of $25.03 on their monthly bills.
The electric rate hike threatens to compound the cost of living and rental crises already endemic around the state. Rent is high, food prices are high, health care is high, and child-care costs are high. Wages are not.
“If you’re someone who is privileged enough to not have to think about that $33 extra for a [monthly] payment, you might not realize that could mean a missed meal,” Syd Dominic told commissioners. “Take anything you can imagine when you think about $33 and how destabilizing that can become.”
It’s the second winter in a row Rhode Island Energy has proposed steep increases to its utility rates. Last year state regulators approved a historic 47% electric rate hike proposed by the utility company, and households saw their average bill increase by $50.76 a month.
Rhode Island Energy officials have pointed to increased worldwide demand, and the Russian invasion of Ukraine, as key reasons for the hike in electricity rates, noting that prices will come down again in the spring.
Historically, that’s usually true. Electricity is more expensive in the winter than in the summer, as the demand for natural gas, used for electricity and heating homes, rises around the world, and prices usually fall in the spring when demand recedes. Usually.
Rhode Islanders saw a 47% hike last October in the winter rates, but Rhode Island Energy only proposed a 24% decrease in April for the summer rates — which means penny for penny, ratepayers are paying more for electricity this year than they did last year.
But state residents and activists have long argued that the state aid and the forgiveness programs offered by Rhode Island Energy often aren’t effective enough to break the cycle of poverty. Timothy Fischer, a licensed clinical social worker working in Rhode Island, told commissioners he had witnessed more than a dozen people lose out on subsidized housing and become homeless because of falling behind on their utilities.
“An elderly person whose home was purchased by a landlord, their rent was raised far beyond their means to be able to afford it,” Fischer said. “They applied to some local subsidized housing that they were prioritized due to age, due to their disability. Got to the top of the wait list, willing to pay that rent so they have a safe, affordable place to live. But what holds them back is that they cannot get those utilities [bills] in their name and they go to the next person on the wait list.”
“Every poor person I know works as hard or harder than every person on the [Public Utilities] commission,” said Juan Pablo Ocampo. “We work two or three jobs and are still forced by Rhode Island Energy and the Public Utilities Commission to choose between paying for food or paying our utility bills. We’re forced to choose between a termination or an eviction. What we need is a fair utility rate.”
Advocates from the George Wiley Center, a Pawtucket-based nonprofit that addresses the issues associated with poverty, have long urged a return to the percentage income payment plan (PIPP), a pilot program dating back to the 1980s in Rhode Island, where low-income residents paid a specific percentage of their income for utilities, instead of a flat rate.
Rhode Island Energy told lawmakers it was open to considering legislation (H5847) introduced by Rep. Scott Slater, D-Providence, who introduced a bill restarting PIPP in the legislative session earlier this year, and that was open to filing a PIPP program design as earlier as July 1, 2024. (Slater’s bill never made it out of committee before the end of the session, but is widely expected to be reintroduced next year.)
The PUC is scheduled to vote on the new electricity rates Sept. 20.
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