Rhode Island Electric Rates Expected to Dip This Summer


WARWICK, R.I. — Rhode Islanders can expect some financial relief this summer, as electricity bills are expected to go down starting next month.

Rhode Island Energy (RIE) is proposing lowering the default rates for electricity in its filings this month to state regulators at the Public Utilities Commission. According to a press release from the utility, an average customer using 500 kilowatt-hours (kWh) a month can expect the supply charge on their bill to drop 40% compared to the most recent winter rates.

“After the second straight winter where New England saw the highest supply rates ever recorded,” RIE president Greg Cornett said in a statement, “passing on these lower prices to our customers is critical and should provide them with some much-needed relief.”

So how much will utility bills actually be lowered, and how will that compare to prior years? The answer is, probably not too much. The PUC estimates the new electricity rate changes will lower ratepayers’ bills by $35.47.

Currently, the average customer using 500 kWh a month pays $167.94, according to the PUC’s estimates. Under the new rates, that would drop to $132.47, a 21% decrease on the total bill.

Electric and gas prices have soared in Rhode Island as the worldwide demand for natural gas increases. Coal-fired power plants across New England have seen an uptick in retirements during the past two decades as the region switches to natural-gas fired plants, which are more energy efficient and have less (but not zero) emissions when compared to coal.

The result for Rhode Island is an electricity market that’s entwined with the price of natural gas, and in the past RIE has said factors such as a rising global demand for the fossil fuel and geopolitical disruptions, such as the Russian invasion of Ukraine, has made natural gas prices highly volatile.

Despite RIE heralding the cut as significant relief this summer, the proposed electrical rates are still higher than last year’s summer rates. According to a chart published by the PUC, the average customer using 500 kWh last year paid around $125 a month for electricity under the summer rate that started in April. Electric bills were even lower during the summertime between 2019 and 2022; on average bills were less than $110.

Part of the reason? While the supply price of electricity — often directly tied to natural gas prices — is going down, a big chunk of ratepayers’ bills are distribution charges for electricity. At a public hearing on the rate changes last Tuesday night, Alan Spen, a local resident who recently moved to Rhode Island from out of state, expressed confusion over why the charges were so high.

“It’s not so much it seems to me the supply side, it’s the delivery side in some cases is two-thirds of the total charge, which is unusual,” Spen said. “I know there’s some unique characteristics of New England and it’s highly reliant on natural gas, but it seems like a lot of the billing is the delivery charge, which I have no control over.”

Meanwhile, customers are facing a possible increase in their natural gas bills. RIE has proposed increasing the Gas Infrastructure, Safety and Reliability charge, which the utility company uses to make capital improvements to its distribution system, by 2.9%, an increase of $48.28 annually, for customers that use an average of 845 therms — one therm is 29.3 kWh.

(The utility company’s Electric Infrastructure, Safety, and Reliability Plan is typically where it makes a healthy profit; per state law it’s not allowed to make money off electricity and gas rates alone.)

Both Rhode Island Attorney General Peter Neronha and the Conservation Law Foundation have submitted motions to intervene in this year’s ISR docket, expressing concerns the plan would not allow for significant enough emissions reductions to meet the Act on Climate law.

“As the State moves to meet the requirements of the Act on Climate,” Nicholas Vaz, special assistant attorney general, wrote in a position paper submitted to the PUC, “there are risks that utility spending on infrastructure investments that may need to be abandoned in the near or mid-term could create stranded costs and regulatory assets that ratepayers will be stuck paying for well into the future.”

Last year the PUC opened a docket and stakeholder group to investigate the future of natural gas in Rhode Island in light of the 2012 Act on Climate bill. Its investigation remains ongoing, and is expected to wrap up later this year.

The PUC is expected to vote on the new electric and gas rates before the end of this month. The new rates, once approved, would go into effect April 1.


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