Senator Dawn Euer has introduced legislation to limit which public utility company costs are born by ratepayers and to cap increases to their capital spending plans.
“This bill sets down in law a list of costs to utilities that should not be passed on to the ratepayers,” said Senator Euer (D-District 13, Newport, Jamestown). “Some of these categories are already prevented by rulemaking, but as we have seen at the national level, administrative rulemaking can change quickly, and it is important to have consumer protections codified into law in a complete and comprehensive manner.”
The bill (2025-S 0593) would place restrictions on what types of spending public utilities are forbidden from recouping from ratepayers, either directly or indirectly. The list includes advertising, marketing, communications, public education or lobbying, as well as any costs associated with such activities, such as research, analysis, preparation or planning undertaken to support these activities.
Rep. Arthur Handy has introduced companion legislation (2025-H 5818) in the House.
Connecticut, Maine, and Colorado have recently passed similar legislation.
The bill would also prevent utilities from recovering costs associated with rate proceedings or infrastructure, safety, and reliability (ISR) proceedings carried out before the Public Utilities Commission (PUC). These proceedings determine whether a utility’s proposed rate changes and ISR capital investment plans are approved to proceed.
In Rhode Island, utility companies are not allowed to make profit on procuring energy to supply ratepayers. They instead earn a rate of return on the delivery of the energy, based on the infrastructure they build in Rhode Island, which is governed by these ISR hearings.
The bill would also cap increases to these ISR capital improvement plans at no more than 3 percent of the average of the previous three years of approved capital spending plans, excluding the costs of installing “smart meters.”
In March, Rhode Island Energy requested a capital budget for electrical distribution that was more than double the one approved in 2022 and a budget for gas capital investments that was $16 million higher than 2022.
Senator Euer says that this provision is intended to protect ratepayers from rising costs and to impose more responsibility on utilities to manage their infrastructure investments prudently and cost-effectively.
“This is a heavily regulated industry that evolved alongside greenhouse gas-emitting energy sources, which we are now, out of necessity, transitioning to one based on sustainable, renewable energy sources. It is a transition we have to make, but we also have to stay within a budget,” said Senator Euer. “Yet, the submitted budgets under the ISR docket have grown exponentially over the years. Placing a budget cap on capital improvements will push utility companies to use their own knowledge and expertise to make internal decisions of how best to efficiently and effectively carry out this transition to a green, modern energy system that is mandated by both our laws and our circumstances.”