RI regulators pair electricity rate hike with some financial relief for winter months

PROVIDENCE, R.I. (WPRI) — Rhode Island regulators on Thursday approved an electricity rate hike that is expected to raise customers' bills 23% on average this winter compared with current rates, although there will be some financial relief provided.

The R.I. Public Utilities Commission approved the rate hike, proposed earlier this year by Rhode Island Energy, the state's main utility. As a result, the residential electricity rate will increase from 10.4 cents per kilowatt hour during the summer months to 16.4 cents per kWh for the next six months beginning in October.

The new rate means an average customer's bill will increase by about $31 per month, or 23% compared to the summer months. This year's winter rate is slightly lower than last year's, when it was 17.7 cents per kWh, equaling about $8 in savings each month.

At the same time, state regulators also approved a plan to provide some relief to residential customers. Rhode Island Energy will refund about $27 million it overcharged customers last winter. The money will be returned in the form of credits that will help offset monthly bills.

The company sometimes overcharges throughout the year when Rhode Island Energy is able to purchase lower-than-expected electricity off the so-called spot market, which is the real-time price of electricity.

Electricity prices can fluctuate at any given time during any given day depending on variable factors, such as how much energy is available and weather conditions. Whenever there are savings, the company reassesses how much has been paid each year and typically provides bill credits or pays refunds.

"In this case, the rates went down slightly so now we will refund our customers for that money plus interest," Rhode Island Energy spokesperson Caroline Pretyman said in a statement. "If we had under collected then we would have to collect that money from customers."

This year the utility will provide low-income customers with a roughly $23 monthly discount for six months beginning in November, according to state regulators. The six-month credit totals about $140 per household, which state regulators estimate nearly offsets the entire rate hike.

Meanwhile, Rhode Island Energy standard-rate customers will receive a one-time credit of about $69 in December only. The utility company is still calculating what type of relief will be provided to commercial and industrial electricity customers, according to regulators.

State Rep. David Morales, a Providence Democrat, is an outspoken critic of Rhode Island Energy's winter rate hikes. He said the financial relief will help some households, but argued the sharp swings in electricity rates each year are unfair to customers -- especially those on fixed incomes.

"I feel for the thousands of Rhode Island energy customers -- specifically, our seniors, our low-income families, those with children -- who are going bear the brunt of these increasing utility rates," he said.

Morales argued there should be a universal credit afforded all income brackets during the winter, saying it should be jointly funded using state funds and by Rhode Island Energy.

Pretyman said the company "share in the concerns about the high price of energy supply," but she highlighted that energy prices are driven by external macroeconomic forces outside of the company's control.

"It’s important to note that we charge customers what we pay generators for producing the power, and we don’t earn a profit on the cost of electricity," Pretyman said in a statement. "We are pleased that the bill credits will help to mitigate some of the increase for the average residential customer and all of the increase for low-income customers this coming winter."