Electric bills expected to increase 24% Oct. 1

PROVIDENCE — Start budgeting, Rhode Islanders, because electric bills are expected to rise again to nearly the same level as last winter.

On July 26, Rhode Island Energy, the state’s dominant electric utility, filed a pricing proposal that would raise electric bills by approximately 24 percent this winter. The rate hikes take effect on Oct. 1 and will continue through March 31, 2024.

Rhode Island Energy residential customers will see an increase from the rate of 10.34 cents per kilowatt hour that took effect in April, to 17.74 cents per kilowatt hour, according to company spokesman Ted Kresse. Come October, the resulting impact of these changes on a typical residential customer using 500 kilowatt hours a month is an increase of $32.29 per month compared to the current summer rates.

While monthly bills won’t increase at the same rate as they did last winter — when Rhode Island Energy raised rates by a record 47 percent — the price for usage will largely be the same. Last winter, residents were charged 17.785 cents per kilowatt hour. Customers saw a slight reprieve in April when costs came down for the summer, but the cost per kilowatt hour was unusually high for the warm weather period.

Prior to this year, summer rates for the last three years stood around 8 to 9 cents per kilowatt hour.

“As anticipated, this upcoming winter’s supply prices are on par with what we experienced last season,” said Dave Bonenberger, president of Rhode Island Energy.

These winter prices are expected to come back down in April 2024, but it’s not yet clear by how much.

Rhode Island Energy, which is owned by Pennsylvania-based PPL Corp., does not actually make a profit from supplying energy to its customers. The company delivers the electricity to customers, but it does not own the power plants where that electricity is generated. The supplier chosen by Rhode Island Energy is called Last Resort Service, or LRS. The LRS rate is 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.

According to a Globe reporter’s recent Rhode Island Energy electric bill for a one-bedroom apartment, for example, the cost to supply electricity was $24.86 in June. But the company charged nearly double in “total delivery services,” which upped the bill to $44.71. The company said it would be decreasing its “customer charge” fee starting in October, from $12 per month to $6.

The company has to secure enough electricity to power homes and businesses through a competitive energy auction. The auction occurs months in advance of the new rates taking effect. These price adjustments, which occur twice a year, do not impact customers who are part of a community aggregation plan or use an alternate supplier, as do about 30 percent of Rhode Island Energy’s customers.

New Englanders will have to pay higher-than-usual winter supply prices this year, like they did last year, due to “several ongoing market conditions,” according to Rhode Island Energy. Bonenberger said that includes the continued higher natural gas price worldwide and other global economic events. In 2022, he pointed to a global supply shortage that was worsened by Russia’s invasion of Ukraine, when greater demand for liquified natural gas in Europe and Asia also had an impact on prices throughout the United States.

“We all saw in our own homes and businesses how these commodity prices can impact a bill,” said Bonenberger. “So it’s more important than ever that customers become familiar with ways they can reduce their energy use and know about the resources available to them to help manage energy costs in the coming months.”

The Rhode Island Public Utilities Commission, which has final say over whether these proposed rates will go into effect this fall, has not yet scheduled a hearing for the proposed rates.

“We’ll continue to work with state leaders on other ways to help the most vulnerable,” said Bonenberger.