Rhode Island Energy Seeks Natural Gas Rate Hike
March 11, 2023
WARWICK, R.I. — Natural gas ratepayers may be dealing with another rise in prices next month.
Under new gas and electric rates filed with the state Public Utilities Commission by Rhode Island Energy, ratepayers who use natural gas to cook and heat their homes could see their bills increase as much as $51.23, a 3% increase in the rate over the next 12 months. That’s on top of the rate hike approved by state regulators last fall, which added an estimated $90, or 9.7%, to ratepayers’ bills annually.
At a recent PUC hearing, ratepayers took aim at the unpredictable rate changes submitted by Rhode Island Energy, noting that energy prices have been on the decline since last summer.
“People have short memories, generally if you change things slowly, if you push the knife in slowly, people don’t notice as much as if they just stabbed you,” said Doug Gobeille, a physics professor at the University of Rhode Island.
Others warned the PUC commissioners that ratepayers were beginning to feel the hikes, despite a mild winter.
“At some point you need to think of the people that are working every day,” Haley Stone said. “Not just lawyers, not just administrators, not just MBAs, but everybody; ‘cause everybody works and everybody works hard.”
Half of all Rhode Islanders use natural gas to heat their homes, according to the state Office of Energy Resources, with usage concentrated primarily in the state’s urban core. Another third or so of the state relies on home heating oil during the winter to heat their homes. Despite improvements in home heat pump technology, only a small percentage of state residents heat their home solely via electric heat.
Natural gas heat also aligns with socioeconomic lines. While everyone in the state uses electricity, natural gas is not as ubiquitous. Its concentration in the Providence metro area means wealthier communities that don’t have natural gas hookups are immune to volatile rate hikes.
Rhode Island Attorney General Peter Neronha recently urged state regulators to deny the proposed plan by Rhode Island Energy. In filings to the PUC, his office argued the proposed rates, and the infrastructure spending plan from the utility, did not comply with the goals of the state’s Act on Climate law.
As part of its annual filings, Rhode Island Energy proposed spending $388 million for natural gas infrastructure investments over the next two years, with $11 million to build a weld shop so the company could take on infrastructure projects in-house rather than outsourcing the work. (Rhode Island Energy later withdrew the weld shop proposal.)
“The Company’s proposal on its face includes expenditures that are clearly neither reasonable nor necessary to ensure safe and reliable gas service,” according to the attorney general’s filing.
In rebuttal testimony to the attorney general, Rhode Island Energy said the investments were intended to ensure the safe and reliable operation of the existing natural gas distribution network. Citing the 2019 Aquidneck Island gas outage, the utility noted it operates one of the oldest distribution systems in the country.
“The failure to make needed investments, as suggested by the Attorney General, could lead to similar events in the future or exacerbate the consequences of such events,” Rhode Island Energy wrote in its testimony.
Meanwhile, the company has proposed lowering electric rates, by a slim margin. According to the utility’s filing, the average residential customer using 500 kilowatt-hours a month could see a drop as much as 25% on the supply side of their bill, an estimated $17 per month.
That $17 is indeed a slim. The rate reduction comes nowhere near the 47% electric rate hike approved by regulators last fall. Households across the state saw their electric bills increase on average $50.76 a month.
State leaders attempted to stymie the impact of the winter electric rates by providing one-time bill credits to ratepayers from $6.8 million in Regional Greenhouse Gas Initiative (RGGI) funds. A settlement agreement hammered out between the attorney general’s office and the utility’s new owner, Pennsylvania-based PPL Corp., provided another $32 million for rate relief.
The new natural gas rates are expected to be approved by the PUC later this month, and would go into effect April 1.
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