Rhode Island Energy Proposes Winter Electric Rate Decrease

News Summary

Rhode Island Energy has proposed a reduction in residential electric rates to 14.8 cents per kilowatt hour this winter, down nearly 10% from last year’s rate. This comes amid the impact of global natural gas prices and supply chain disruptions. Approximately 500,000 customers will see this change starting October 1, although monthly bills are expected to rise due to high heating demands. Assistance programs are also being put in place to help ensure affordability for customers, particularly low-income households.

Rhode Island is set to see a decrease in electric rates this winter, as Rhode Island Energy has proposed a new residential electricity rate of 14.8 cents per kilowatt hour. This significant reduction comes after a series of price increases experienced over the past few winters driven by global demand for natural gas and supply chain disruptions caused by geopolitical tensions, notably the war in Ukraine.

The proposed “last resort service” rate, filed with state utility regulators on July 21, reflects a nearly 10% decrease from last winter’s rate of 16.4 cents per kilowatt hour. This new rate is also 3 cents lower than the winter 2021-22 rate, which had reached record highs. Rhode Island Energy estimates that approximately 500,000 electric customers will be affected by this change starting October 1, with rates to remain in effect until March 31.

Despite this decrease, the proposed winter electric rate continues to be considerably higher than pre-market disruption levels seen four years ago. A typical customer using 500 kilowatt-hours monthly will notice their winter bill increase to $163.29, which is $24.49 more than the current summer bill of 10.1 cents per kilowatt hour. The overall pricing trends indicate that winter bills may continue to rise due to increased heating demands, particularly in regions relying heavily on natural gas as a primary energy source.

Context of Rate Changes

The rise in electric rates over recent winters has been largely influenced by external factors, particularly the surging global demand for natural gas and significant supply disruptions resulting from the ongoing war in Ukraine. Following the initial spike in prices, rates remained elevated for the following two winters before starting to ease slightly. Nevertheless, challenges within the market persist, leading to a pricing environment that remains less stable compared to years prior.

Adjustments and Assistance Programs

Rhode Island Energy is actively working on mitigating the financial impact on its customers. Measures include adjusting its procurement strategy, which now involves purchasing 15% of supplies on the spot market, a change from the previous 10%. The company has also committed to absorbing a $150 million tax liability associated with its parent company’s acquisition over the next 40 years. In order to support its customers, Rhode Island Energy plans to provide monthly credits of $20-$30 to electric customers and $40-$50 to gas customers starting in January, February, and March of 2026 and 2027, targeting increased affordability during those months.

Low-income customers will further benefit from a $5 million allocation sourced from the Regional Greenhouse Gas Initiative, which will provide additional credits in late 2025. Additionally, a new employee-funded assistance program, “Operation Help,” is being established to offer support to vulnerable customers during the winter months.

Future Outlook and Customer Engagement

Greg Cornett, the president of Rhode Island Energy, expressed cautious optimism regarding future rate trends given the observed downward movement in supply prices within the forward market. In response to customer frustrations experienced during prior winters, the company is committed to enhancing its transparency and communication strategies moving forward.

The proposed rate changes will require regulatory approval and may be subject to public hearings, allowing community members to voice their opinions and concerns regarding the adjustments.

Deeper Dive: News & Info About This Topic

• Rhode Island Current
• Providence Journal
• GoLocalProv
• WPRI
• Wikipedia: Electricity Market
• Encyclopedia Britannica: Electricity