The Ocean State’s new power company issued a warning to customers: “Rhode Island Energy Encourages Customers to Prepare Now for Significantly Higher Winter Electricity Supply Prices.”
The headline topped a press release from the company, issued on July 21.
“Despite summer rates being the lowest in years, escalating costs of natural gas will have major impact on electricity supply prices starting Oct. 1,” according to the press release. “While most Rhode Islanders use less electricity in the winter months, they likely won’t see a decrease in their monthly electric bills this winter as they may have noticed in the past.”
Pennsylvania power company PPL (formerly known as Pennsylvania Power & Light) acquired the Narragansett Electric Company earlier this year. The newly formed Rhode Island Energy provides power to more than 94 percent of Ocean State electricity customers.
The company has been testifying before the Rhode Island Division of Public Utilities and Carriers (RIDPUC) in public hearings, requesting “temporary winter supply” rate increases, to take effect Oct. 1 through March 31, 2023.
“Last year’s LRS winter rate for the average residential customer was 10.882¢/kWh,” according to RI Energy. “The new rates for the upcoming winter season, if approved by the Commission, will be 17.785¢/kWh for residential customers, up from the summer rate of 7.810¢/kWh. For small business customers, the new proposed rate would be 18.279¢/kWh, up from the summer rate of 8.047¢/kWh. A residential customer who is receiving LRS — and paying the new rate — will see the price of their electricity supply increase by about $52 per month. This is based on an average use of 500 kWh of electricity per month. For many customers, however, electric use decreases in the colder months when air conditioners are not being used to cool their homes or businesses.”
RIDPUC Associate Administrator Thomas F. Kogut identified a trend throughout the region.
“The winter rates proposed are in line — and actually a bit less in some cases — than what we are seeing in the rest of New England,” Kogut said last week. “The driving factor is the price of natural gas which is far and away the largest electric generation source in the region.”
On Aug. 19, RI Energy faces a “deadline to serve discovery,” and the public has until Aug. 29 to respond to their winter rate increase case. A RIDPUC decision is expected in late September, following public comment at hearings on Sept. 16 and 19.
“When prices went down to one of their lowest levels in years this spring, the winter forecasts did not look good,” said Dave Bonenberger, president of Rhode Island Energy. “Unfortunately, those forecasts were accurate and the price of electricity this winter is something we have never seen before. Now that we know the full impacts, we all need to lookout for one another, help each other save on our energy consumption, and educate more people about the programs that can help assist their neighbors.”
Rhode Island Gov. Dan McKee attended a Warwick Rotary Club luncheon last Thursday, and responded to a question from an organization member regarding soaring winter electric rates and potential state aid for the average middle class Ocean State ratepayer.
What will Rhode Island lawmakers do to help all state residents tackle record winter electric bills (on top of also surging home heating costs)?
“We are doing,” McKee replied, shifting the conversation first to vehicle fuel. “Let’s talk about the gas prices right now … How can we have gas prices in this state at $4.60 at one station, at $3.99 or $3.89 at another station? There is something going on here. The supply chain … the supply thing excuse is overdone.”
Employment numbers are booming across the state and nation.
“And that’s one of the things we need to expose on this,” McKee told the Rotary Club. “We have people back in the workforce, and yet the prices, we’re still saying that these prices are being caused by lack of workforce. We need to take a look at the gasoline prices in the state of Rhode Island right now. And I’m ready to bring all the mayors together, and all the municipal leaders to actually take a look at that spread. I think it’s very important to look at that.”
McKee pivoted back to the question asked.
“But we have done already,” he said. “We announced (a plan for direct rate relief) to help about 39,000 (low income) families.”
McKee and the Office of Energy Resources (OER) issued a press release last month, proposing lawmakers allocate $3.8 million from the Regional Greenhouse Gas Initiative (RGGI) fund “to provide direct rate relief to low-income Rhode Island residents who are most at risk of not being able to afford their electricity bills this winter.”
OER proposed the RGGI Allocation Plan draft for a 30-day public comment period.
“Rhode Island Energy, the State’s primary utility, recently announced that it is requesting a significant winter rate increase, effective Oct. 1, due to an unprecedented surge in energy costs this winter season,” according to McKee’s July press release. “The utility is prohibited by law from profiting from the sale of energy and passes the costs of energy directly to ratepayers.”
Last week, McKee informed the Rotary Club that he was intervening, once again, on behalf of the ratepayer.
“We have put a letter into the PUC … I have intervened on rate cases more than once as Lt. Gov. and I’ve saved ratepayers in this state well over $50 million,” McKee claimed. “So, we’re doing the same thing again. We’re making sure we’re keeping them honest on what they secured.”
McKee has submitted a letter “urging the Public Utilities Commission to take specific action to provide relief to all Rhode Islanders in response to Rhode Island Energy's request for a rate increase.”
The governor has proposed taking two primary proactive steps in anticipation of inevitable winter supply increases.
“I’ve already talked to (lawmakers), about potentially a LIHEAP (Low Income Home Energy Assistance Program) expansion into different income categories,” McKee said last Thursday. “They’re working on a bi-partisan strategy right now. And also we did propose to the General Assembly, on the heating side, as much as the electric side, to eliminate a 4 percent … fee that’s on every bill, both on gas and electric, to eliminate that for six months.”
The governor’s office has followed through, recommending the suspension of the “customer charge on residential electric bills until next summer when electricity prices are projected to decline significantly” and “distributing the $32.5 million in Rhode Island Energy electric ratepayer bill credits from the State's settlement with PPL Corporation back to ratepayers over a six-month period that coincides with this coming winter when electric rates will be elevated.”
McKee also hopes to moderate the impact on ratepayers by spreading the higher rates over a twelve-month period.
“This surge in electricity costs this winter is going to impact all Rhode Islanders,” McKee said in the press release. “Our most vulnerable residents do not have the means to absorb this rate increase. We have a responsibility to do everything possible to protect them. That's why we're proposing to use $3.8 million from our RGGI funds to provide direct rate relief to low-income utility customers who are most at risk this winter. This will help ease the burden of higher-than-average electricity prices and continue our commitment to provide relief to Rhode Islanders in the face of rising prices and inflation.”
The pubic hearings are also an important part of the process. McKee outlined his strategy for helping ratepayers cope with higher rates during the Rotary lunch.
“One is keeping everybody honest on the pricing,” McKee said. “And then two, we need to go out and do as much flexibility as we can provide into both the utility bills and the oil bills as well. And we’re doing that. We’ll see what will kind of unfold over the next few weeks. But we are looking at taking down the electric bill strategy. Let’s all remember too, as you hear the media go out and kind of make this sound worse than it is; but it’s not good, but compare winter prices with winter prices. Don’t compare spring price to the winter price. Those change every six months. Spring prices are always lower. Winter prices are always higher. Compare the winter price last year to this year, it’s about a $36 per family, on an average electric bill; not $50. And I think we’ve got almost $20 of that covered right now. And then the LIHEAP program hopefully is going to expand in a way that is going to help people who are heating their homes this winter.”
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