More bad news for Rhode Islanders struggling to pay their energy bills: Hikes are coming.
Rhode Island Energy unveiled its long-anticipated request to increase service charges for gas and electric customers in a press release the day before the Thanksgiving holiday. An application was simultaneously submitted to the Rhode Island Public Utilities Commission for review.
The documents were not immediately available from the commission Wednesday morning. Michael Dalo, a spokesperson for Rhode Island Energy, declined to provide a copy when asked.
If approved, the increases would take effect in September 2026. The average residential electric customer would see their monthly bills rise $7.78, or 4.83%, while a typical residential gas customer would pay $343.53 more per year, a 20.6% increase, according to Rhode Island Energy.
Gov. Dan McKee blasted the proposal in a statement released just after 1 p.m.
“This is not the time for a utility rate increase,” McKee said. “With costs rising nationwide and families already burdened, my focus remains fixed on affordability for every Rhode Islander.”
Anticipating the fury coming its way, Rhode Island Energy President Greg Cornett attempted to justify the proposal by highlighting the benefits for customers.
“This review is about making smart, necessary investments in reliability, customer service, and safety, while also keeping affordability top of mind and strengthening support for those who need it most,” Cornett said in a statement Wednesday. “Throughout this process, we want our customers to understand that we are keenly aware of the challenges so many of them are facing, and that we are committed to keeping customers informed and helping them manage their energy costs now and into the future.”
State regulators prevented the utility supplier from asking for a distribution rate increase for the last three years under the terms of the 2022 sale of gas and electric operations from National Grid to PPL Corp., Rhode Island Energy’s parent company.
The moratorium ends this year, and Rhode Island Energy is ready to take back what it claims it needs to offset inflation and supply chain expenses.
For example, the cost of installing a 1-mile section of underground electric cable has nearly doubled, from $12,000 in 2020 to $22,000 today, according to the company. Electric surge protectors now cost $120, compared with $60 in 2020. Upgrading natural gas pipelines now come in at nearly triple the price, the company said.
“The proposed increase is necessary for [Rhode Island Energy] to continue to meet regulatory mandates, align with the real cost of doing business, and continue delivering around-the-clock service,” the press release stated.
The company expects to generate an additional $230 million in operating revenue over a two-year period from its proposal, according to a federal financial disclosure statement also filed on Wednesday.
PPL’s profits and shareholder returns have come under scrutiny by state lawmakers and consumer advocates, who contrast company earnings with cash-strapped residents struggling to pay their winter energy bills. Electricity prices have only abated slightly since reaching record highs three years ago
Under state law, the company cannot recoup any money from its usage rates, which are instead set directly by prices from third-party suppliers.
Adding to public fury: accounting errors which revealed the company overbilled state agencies $2 million in their 2024 energy bills. State utility regulators are reviewing complaints from residential customers who allege they have been overcharged, including on the rollout of 540,000 smart electric meters statewide.
The Public Utilities Commission has final authority over any increases in electric and gas rates. The three-person panel considers the financial solvency of the company alongside ratepayer affordability and the true necessity of proposed capital projects. Historically, the commission has trimmed some money from the original company requests to blunt the impact on ratepayers.
The last time the commission reviewed a distribution rate increase, under National Grid’s ownership, was in 2017. The approved rates were 40% less than what National Grid asked for.
Earlier this week, Chairman Ronald Gerwatowski highlighted the commission’s ability to influence distribution of customer bill credits, which Rhode Island Energy must refund to customers under the terms of the 2022 sale. Rhode Island Energy withdrew its initial proposal earlier this month amid scrutiny over the calculations, but plans to file an alternative scheme early next year.
The discounts, which aim to shield ratepayers from company tax and accounting expenses related to the 2022 sale, could help mitigate higher service charges, Gerwatowski said Monday.
McKee pledged to “continue fighting” for Rhode Island Energy’s original $150 million bill credit plan. He also said his fiscal 2027 budget proposal, unveiled in January, will include “millions of dollars” in energy savings.
This story will be updated.
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