The Rhode Island Public Utilities Commission on Friday approved roughly $170 million in customer bill credits and rejected significant portions of Rhode Island Energy’s request to raise electric and gas distribution rates.
The credits stem from a commitment PPL Corporation made when it acquired The Narragansett Electric Company in 2022, agreeing to hold Rhode Island customers harmless from certain acquisition-related tax costs. Rather than spreading that benefit over decades, the PUC authorized the company to accelerate the payout — using a lower discount rate than the company proposed, which the commission said was fair to the company without shortchanging ratepayers.
The PUC says credits to electric customers over the next twelve months will exceed the entire revenue increase allowed in the case, offsetting the electric increase. On the gas side, after covering about $11 million customers owe for a previous under-collection, the remaining credits will provide what the commission calls a significant offset over the winter.
The commission denied Rhode Island Energy’s request to raise its allowed return on equity to 10.75%, keeping the rate in place since 2018. It also rejected the company’s proposed two-year rate plan, which would have triggered an automatic second increase in 2028, denied recovery of more than $9.4 million in IT and software costs, and denied recovery of more than $2 million in interconnection infrastructure costs the PUC determined should have been charged to specific customers rather than all ratepayers.
On the company’s new Johnston offices, the PUC required shareholders to contribute roughly $1 million a year until the next rate case and denied the company profit on the capital costs of the setup. It also rejected a proposed 57% equity share in the capital structure, adopting roughly 52%.
Citing recent problems with the company’s existing billing system, the commission deferred recovery of costs for a new customer and billing system, requiring Rhode Island Energy first to file a detailed plan with commitments for fixing ongoing problems, including the format of customer bills.
Other decisions include a new five-tier low-income electric discount that increases with lower income, expected in January 2027; a new tariff for large loads such as data centers; full decoupling of gas revenue from customer growth; a three-year phase-out of the allowance that spreads gas line extension costs across all customers; and a new winter rate design lowering volumetric charges for all residential electric customers.
Gov. Dan McKee, whose administration pushed the credits through the Division of Public Utilities and Carriers, called energy affordability his top priority. “More than $170 million in bill credits will provide meaningful help to families and businesses across our state,” he said.
McKee criticized the commission on the profit question. Although the PUC denied the company’s requested increase, it declined to adopt the administration’s proposal to lower the return on equity below its current level. “It’s troubling that the PUC did not accept their recommendation,” McKee said, adding that his administration would return to the commission on the issue.
The credits are separate from $28 million in emergency energy assistance McKee directed in July from Regional Greenhouse Gas Initiative proceeds, which will provide about $61 to the average residential customer during peak winter months.
Rhode Island Energy must notify the PUC by Tuesday, Aug. 25, whether it will proceed with the credits, and file its compliance schedules by Aug. 27. Final approval is set for Aug. 31.
Docket materials are at ripuc.ri.gov.
