RI electric bills set to drop in April for summer

PROVIDENCE – Many Rhode Islanders will see a substantial decrease in their electric bills starting April 1 under a proposal awaiting approval from state regulators.

Rhode Island Energy, the main electric utility in the state, is proposing new rates that would see the monthly bill for the typical residential customer drop by about 40% for the six-month summer period. The proposed decrease filed with the Public Utilities Commission follows the regular ebb and flow of electric rates, which are largely determined by wholesale prices for natural gas, the dominant fuel used for power generation in New England. Gas prices go up in the winter, when demand for the fuel from the heating sector escalates. They fall in the summer, when the temperature climbs and heating needs drop off.

But even with the coming decrease, the residential rate for what’s known as last resort service would still be higher than it typically was in past years.

That’s because over the past couple of years, gas prices have been higher than usual because of inflation and increased global demand triggered by the war in Ukraine. Regulators require Rhode Island Energy to stagger the way it buys power, tying up some contracts well in advance of when supply is needed. That meant that even though the utility’s customers saw big increases over the past two winters, they weren’t as bad as some other places in the region.

But it also meant that the summer reductions haven’t been as big as they could have been. The new residential rate for the summer would drop to 8.9 cents a kilowatt hour, down from the winter rate of 16.5 cents per kwh. The typical residential customer would see a monthly savings of about $35. The changes are due solely to the energy portion of the bill, not the parts that govern delivery. Rhode Island Energy is not allowed by law to profit from the energy supply. The new rates do not apply to customers who are buying energy through competitive suppliers or through electric aggregation programs in Barrington, Central Falls, Narragansett, Newport, Portsmouth, Providence and South Kingstown.

For customers thinking of switching suppliers, the total supply rate, including a renewable energy charge and other adjustments, is 10.4 cents a kwh.