Electricity bills in R.I. could increase by 50 percent come Oct. 1. Here’s why

The Rhode Island Attorney General’s Office plans to file a motion to intervene in the review process of the rate hikes proposed by Rhode Island Energy

Electric power lines.Robert F. Bukaty/Associated Press

PROVIDENCE — Rhode Island homes and business could see a nearly 50 percent increase in their monthly electric bills starting in October, as the price of natural gas continues to surge. On Friday, the state attorney general’s office said it plans to scrutinize the new rates, which are the highest ever recorded in Rhode Island.

On Thursday, Rhode Island Energy, which provides electricity services to more than 770,000 customers across the state, filed fall rates with state regulators. The newly proposed rate for residential customers, which would go into effect on Oct. 1 and last through March 31, 2023, is nearly 18 cents per kilowatt hour, up from about 11 cent per kilowatt hour in fall 2021.

The price hike will result in significantly higher bills for residential customers. According to the energy company, residents using an average of 500 kilowatt hours per month will see their monthly bills increase by about $52.

Commercial customers will experience bill hikes that will range from about 41 to 51 percent, the company said.

Spring and summer prices have been about 8 cents per kilowatt hour.

“When prices went down to one of their lowest levels in years this spring, the winter forecasts did not look good,” said Dave Bonenberger, president of Rhode Island Energy, in a statement. “Unfortunately, those forecasts were accurate and the price of electricity this winter is something we have never seen before.”

Here’s what you need to know.

Why is my electricity bill going up?

Electricity customers across the country are facing mounting costs due to inflation and the rise in natural-gas prices. Natural gas is predominantly used throughout New England for electricity generation and heating.

The price of natural gas usually climbs during the winter, because of increased demand. But we are also experiencing a global supply shortage made worse by Russia’s invasion of Ukraine. According to Rhode Island Energy spokesman Ted Kresse, the greater demand for Liquefied Natural Gas (LNG) in Europe and Asia is also having an impact on prices in the United States.

Who owns the power plants that make electricity for Rhode Island?

Rhode Island Energy delivers electricity to customers, but it does not own the power plants where electricity is generated. Customers can shop around and choose their own electricity supplier, but if they opt not to then Rhode Island Energy decides which suppliers to use. The rate for electricity from a supplier chosen by Rhode Island Energy is called Last Resort Service, or LRS.

How does Rhode Island energy make money?

According to Rhode Island Energy, which is part of Pennsylvania-based PPL Corporation, the LRS rate charged to customers at cost, with no profit to Rhode Island Energy. The company makes its profit from a separate delivery charge, not from supply charges like the LRS.

Will delivery charges also go up?

It’s not supposed to. The Rhode Island Superior Court cleared the way for PPL Corporation to acquire The Narragansett Electric Company from National Grid USA following a settlement agreement between PPL Corp. and the Rhode Island attorney general’s office in May of this year.

As part of the agreement, PPL will not seek any base rate increases for “at least three years” after the transaction closes and until there has been “at least 12 months of operating experience under PPL leadership.”

Does Rhode Island Energy have final say over my energy prices or rates?

No. The new rates were filed with the Rhode Island Public Utilities Commission. And it’s the commission that will have final say over whether these rates will be put into effect this fall. Yet, the commission is expected to approve these price increases. But the attorney general’s office plans to step in.

Can the state step in and stop this price hike?

On Friday, Blake Collins, a spokesman for Rhode Island Attorney General Peter F. Neronha, told the Globe that the office plans to file a motion to intervene in the PUC docket where Rhode Island Energy submitted its proposed rates on Thursday.

Collins declined to say when the office plans to intervene, but said it would be “soon.” Intervening will allow the attorney general’s office to become part of the review process.

“Our Environmental and Energy Unit is prepared to scrutinize every aspect of any request for increase,” said Collins in an email.

How often do rates change?

Rhode Island Energy’s LRS rates are updated twice each year, in the spring and the fall. Energy is secured for its customers during competitive energy auctions, which are supposed to allow the company to secure the lowest rates, Kresse said.

Is there any way I can lower the cost of my energy bill?

Kresse said consumers can shop for electricity and use the LRS rates as a “reference point” when looking at other suppliers.

“If customers do choose to shop for a supplier, we encourage them to pay attention to the specific terms of the agreements they sign,” read guidance from Rhode Island Energy. “Sometimes suppliers offer introductory offers or special incentives. Customers should be aware of variable rates that often start low and then increase significantly with the price of energy.”

Customers can look into rebate programs and sign up for free home energy audits online. There are also tips for lowering your heating bill during the winter, depending on what type of heat your home has.

Kresse also said that Rhode Island Energy has budget billing and payment plans available online or by calling 1-800-743-1104.