Rhode Island Energy has been playing keepaway with its customers on prospective bill discounts: proffered, then abruptly pulled away.
But ratepayers can at last secure possession of alternative cost savings approved by state regulators Monday.
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The R.I. Public Utilities Commission’s unanimous decision dips into existing pots of money from utility customer charges for energy efficiency and storm preparedness measures, while temporarily suspending those same charges from customers’ electric bills for the first three months of the year. The end result is an estimated $32 in monthly savings from January to March for electric customers, based on the average residential customer who uses 500 kilowatt-hours of electricity per month, according to calculations submitted by Rhode Island Energy.
“The combination of the credits and rate reductions are intended to align with Gov. [Daniel J.] McKee’s laser-focused effort to encourage rate relief for Rhode Islanders for this winter,” Ronald Gerwatowski, commission chairman, said during the meeting.
The three-member utility panel first sought public feedback in July on how to mitigate the winter spikes in electricity prices amid growing fury from lawmakers, community advocates and residents struggling to afford rising winter bills.
The same day the commission published its notice seeking ideas, Rhode Island Energy executives unveiled its own discount plan. Credits to customers were required by state regulators under the 2022 sale of state gas and electric operations from National Grid to Rhode Island Energy’s parent company, PPL Corp. But company executives and McKee hatched a plan to speed up and concentrate the credits over the next two winters, rather than dispersing smaller discounts over a much longer period of time.
The proposal would have slashed customers’ electric bills by $20 to $30 per month, and cut gas bills by $40 to $50 per month, from January to March 2026 and again in the same three months of 2027 — the coldest and most expensive time of year.
But on Nov. 14, the day before a hearing on its proposal, Rhode Island Energy yanked the plan, citing “unexpected and unwarranted opposition.”R.I. Attorney General Peter F. Neronha’s office accused the company of “lowballing” its customers by undervaluing the mandatory discounts, while state utility regulators demanded more information.
The sudden withdrawal put the prospect of rate relief in limbo, with McKee blasting the company’s about-face as “flat-out unacceptable.”
McKee maintained that Rhode Island Energy’s plan was better because it extended the discounts for two winters, not one, and also helped with gas bills. And the best solution would have been both for both discount plans to advance simultaneously.
“That is what should have happened to provide broader and more significant relief to Rhode Islanders,” McKee said in an emailed response Monday.
Rhode Island Energy will still have to fulfill the state-imposed requirement to credit customers for tax and accounting changes tied to the 2022 sale, referred to as the “hold harmless” proposal. Company representatives signaled in a hearing last week they intend to file an alternative plan by early next year, which Gerwatowski saw as fortuitous timing given what he expects will be a “sizeable” rise in gas and electric bills next year.
That’s because Rhode Island Energy can finally request an increase in the amount of money it collects from customers to support its distribution costs and services following a three-year moratorium. PPL agreed not to ask for a rate base increase until 2026 as a condition of the acquisition in 2022. This is separate from usage rates, which are determined directly by prices set by third-party suppliers.
The company is expected to submit its proposal to increase revenues by the end of the year. New rates, if approved, would take effect in September 2026 – the first time since 2019, when the utilities were under National Grid’s ownership.
“I am very worried about the rise of electric and gas rates,” Gerwatoski said. “A renewed, revised hold harmless proposal would prove a valuable tool in the regulatory toolbox as we look to avoid or lower the impact of rising electric and gas rates in the fall of 2026.”
Michael Dalo, a spokesperson for Rhode Island Energy, confirmed that the company will submit its rate review proposal “in the near future,” but declined to provide specifics.
“We are committed to providing safe, reliable, and affordable service to our Rhode Island customers,” Dalo said in an emailed response on Monday.
McKee also pledged to make lower utility costs part of his fiscal 2027 budget proposal, which will be unveiled in January.
In the meantime, alternative discounts will more than offset the seasonal spike in winter electricity prices, which rose 16% as of Oct. 1. Jennifer Wood, executive director at the Rhode Island Center for Justice, stressed the need for immediate relief for low-income families reeling from temporary suspension of federal food assistance and other social safety nets during the government shutdown.
“Funding one-time bill credits from existing sources in the winter of 2025-26 to mitigate the exceptional harm being experienced by the most vulnerable Rhode Islanders in the aftermath of the longest government shutdown in the nation’s history is an appropriate exercise of the PUC’s police power to protect the public good,” Wood wrote in a Nov. 17 letter to utility regulators.”
The R.I. Division of Public Utilities and Carriers, the administrative arm to the politically appointed commission, did not agree. The division argued the commission lacked the legal authority to dip into funds meant to support energy efficiency programs and storm preparedness and recovery.
“It seems clear that the Commission may certainly review the Company’s administration and implementation of the energy efficiency program and its funding,” Margaret Hogan, an attorney for the Division, wrote in a Nov. 17 filing. “However, no statute authorizes the Commission to reach in and access the funds for residential electric bill credits.”
Hogan noted that depleting the funds, and simultaneously suspending the customer charges that fund the programs for the first three months of 2026, will not save ratepayers in the long term because the charges will need to be increased later on to make up for the lost money. She also referred to the environmental consequences of draining funds meant to help with home weatherization, energy efficiency upgrades and other measures necessary to meet Rhode Island’s decarbonization mandates.
A spokesperson for the Division did not immediately return requests for comment on Monday.
Similar criticisms followed in Massachusetts earlier this year after the Commonwealth’s utility regulators forced natural gas companies to temporarily suspend delivery feeds for energy efficiency programs and capital infrastructure improvements to lower customers’ bills.
Gerwatowski did not address potential environmental consequences Monday, but rebuffed questions over the commission’s authority. Rhode Island Energy has not challenged the panel’s power to tap into its funding, instead signaling support for the plan.
“No credit is perfect but I think the approach you described is in a long line of commission decisions that prioritize customer relief,” Commissioner Abigail Anthony said Monday.
The commission recently approved a separate proposal that offered $64 million in refunds to Rhode Island Energy natural gas customers starting Nov. 1.
Nancy Lavin is a senior staff writer for the Rhode Island Current.
