In the end, neither Rhode Island Energy nor its frustrated customers got exactly what they asked of state regulators.
Instead, the Rhode Island Public Utilities Commission attempted to strike a balance, approving some of the company’s proposed changes to customers’ gas and electric bills, while significantly slashing its capital spending plan under a series of motions approved Friday afternoon.
The various changes to bills for both gas and electric customers take effect April 1.
Soaring utility bills brought a standing-room-only crowd of residents, advocates and lawmakers to the commission’s Warwick offices earlier this month, with many urging the commission to reject rate increases and to offer more relief to vulnerable residents. But the regulatory panel is powerless to influence at least some of the components of customers’ bills, including the supply rate. State law prevents regulators from denying seasonal usage rates as long as they reflect the prices Rhode Island Energy pays to third-party suppliers.
Seasonal fluctuations in electric prices, dictated by regional demand and global conflict, have been particularly volatile in the last few years, peaking in the winter of 2022. But summer savings are again in store, with the price per kilowatt-hour set to drop nearly 39% over current winter rates. For the average residential customer using 500 kilowatt-hours of electricity per month, this translates to a $31 monthly savings on supply-side charges.
However, lower supply charges will be partially offset by higher customer fees relating to transmission fees, renewable energy and energy efficiency programs, which are set based on federal and state laws. And, customers will pay more to support the company’s capital investments in the electric and gas infrastructure — though far less than what Rhode Island Energy wanted.
State regulators spent nearly all of the three-and-a-half hour hearing Friday picking apart the company’s fiscal 2026 gas and electric capital budgets, which pay for maintenance and repairs meant to ensure reliability and safety.
Chairman Ronald Gerwatowski criticized PPL Corp., Rhode Island Energy’s parent company, for substantially increasing yearly capital spending, far above the annual hikes proposed under former utility operator National Grid.
Indeed, the company’s proposed electric fiscal 2026 capital budget which starts April 1 is more than double what National Grid spent in fiscal 2022, the last year before the utility business was sold. Rhode Island Energy’s proposed fiscal 2026 gas capital investments are $16 million more than what was spent under National Grid in fiscal 2022.
PPL in a call with its investors earlier this year said it hopes to invest more than $1.3 billion into Rhode Island’s electric grid over the next four years, and nearly as much on the natural gas side.
“While it is positive that PPL and RI Energy wish to invest in Rhode Island, there are significant rate implications in the future tied to these ambitious investment goals,” Gerwatowski said.
Flattening the pancake tower
He likened the various charges built into customers’ bills to individual pancakes, which must be considered not only on their own but as a plate.
“It is the cumulative effect of the entire pancake tower that strains affordability,” he said. “Unfortunately, many of the pancake costs, we have no control over. But the company does have control over the pace of its investments.”
The proposed $247.9 million in electric investments includes $88 million in fiscal 2026 spending on “smart meters,” which was approved separately in 2023. The remaining $160 million would pay for repairs to electric poles and wires, substations, and tree trimming, among other costs.
Commissioners shaved $29 million off the proposed electric budget, including $24 million from general “soft costs” associated with electric grid repairs, and $5 million from the budget for major projects. The final $131 million electric fiscal 2026 budget marks an 18% cut to what Rhode Island Energy proposed, excluding the fixed smart meter costs.
The proposed $223 million in fiscal 2026 gas capital spending rankled commissioners more.
“I almost fell out of my chair when I saw that number,” Gerwatowski said of the gas spending plan, noting that it was more than the $221 million in federal grants helping pay for the Washington Bridge rebuild.
Commissioner Abigail Anthony said the company’s witnesses failed to provide “compelling evidence” that the spending hikes were necessary, rather than discretionary. Especially as the state contemplates shifting away from reliance on natural gas to meet its decarbonization mandates.
The final $179.5 million gas capital budget authorized by commissioners marks a nearly 20% cut over what Rhode Island Energy proposed, with cuts scaling back the scope of gas main replacement to only those lines in immediate need of an upgrade.
The original fiscal 2026 electric capital spending plan would have translated to $1.01 average monthly increase for electric customers, while the $223 million gas capital budget was set to bring a $78.58 average annual increase for gas customers. Bill charges under the reduced spending plans approved by utility regulators Friday have not yet been calculated.
Greg Cornett, president of Rhode Island Energy, expressed disappointment in the cuts to capital budgets in an emailed response Friday.
“Our focus remains on delivering safe, reliable service and maintaining the strength of our energy infrastructure,” Cornett said. “While we are disappointed that the public utility commission has reduced our requested investments, which we developed in consultation with the Division of Public Utilities & Carriers, we will continue to remain focused on safety and reliability to meet the needs of our customers. Ongoing investment is essential as the energy landscape evolves, and we remain committed to working within the approved framework to maintain our infrastructure for the future.”
Customers in seven municipalities — Barrington, Central Falls, Narragansett, Newport, Portsmouth, Providence, and South Kingstown — can opt out of Rhode Island Energy electric prices and participate instead in a community aggregation plan that leverages bulk buying power to secure lower-priced electricity for residents. The default community summer electric rate of 10.014 cents per kilowatt-hour is 0.5% less than Rhode Island Energy’s base residential electricity supply rate. Community aggregation electric rates take effect May 1.
About 25% of the 780,000 Rhode Island Energy customers already opt out of the company’s default electric prices.
This story was originally published by the Rhode Island Current.
