A rare bit of respite from rising energy bills is coming to Rhode Island Energy customers under a trifecta of initiatives approved by state regulators Monday.
The series of refunds, discounts and protections for federal workers and contractors comes one month after a 16% spike in winter electricity prices set in for Rhode Island Energy customers, reigniting public anguish over energy affordability and company profits.
The largest savings will come through gas, not electricity, bills, though, under an annual reconciliation process in which the state utility supplier rectifies forecasted gas supply and delivery expenses against actual costs.
While it’s not unusual for the utility supplier to over- or undercollect on costs associated with gas delivery and capital projects, this year’s mismatch was particularly noteworthy: $63.9 million in excess collections from April 1, 2024, to March 31, now coming back to customers.
“The size of this decrease is highly unusual, but it’s good news for customers this winter,” Rhode Island Public Utilities Chairman Ron Gerwatowski said during the commission’s Monday morning meeting.
In 2024, by contrast, Rhode Island Energy undercalculated its gas costs, resulting in a $3.3 million annual increase in gas rates for customers. Information on average annual changes in gas recovery costs was not immediately available.
The newly approved refunds will translate to year-long savings for Rhode Island gas customers starting Nov. 1, with the largest bill reductions concentrated in the first five months when customers’ gas usage for home heat is highest. For the average residential heating customer who uses 845 therms of gas per year, this translates to an annual savings of $188.51, with $109.92 of the refund distributed from November through March, according to calculations by Rhode Island Energy.
While Rhode Island Energy has faced scrutiny for overbilling some customers, including state agencies, Gerwatowski emphasized that the company was not to blame for the inaccuracy of its projected expenses.
“The overcollection of revenue was not intentional, but a convergence of many different factors,” he said.
Part of the unforeseen savings on supply costs reflects the company’s strategic management and preparations for available natural gas during peak demand periods, lowering costs compared with the previous winter, as detailed in its July 31 submission to utility regulators.
Penalties for overspending, service problems
On the delivery side, however, the company exceeded its state-mandated cap on capital infrastructure spending for fiscal 2025, including for new meters, resulting in a $2 million fine. Rhode Island Energy asked for state regulators to waive the penalty, but its request was denied by a unanimous vote.
“From my perspective, the rules are what they are,” Gerwatowski said Monday.
Commissioner Abigail Anthony also said the company failed to present “real evidence” supporting its argument to waive the fine.
“The structure of the framework is really intended to hold the company accountable to a budget cap,” She said. “It’s one of the few tools that the commission can use.”
Michael Dalo, a Rhode Island Energy spokesperson, did not respond to questions on Tuesday about the denial of its request to waive fines. However, Dalo said in an email that the company supported the reconciliation measures more broadly.
Another $301,000 penalty was added because the company did not meet minimum state customer service requirements, with more calls abandoned or longer wait times, among other reported violations.
Rhode Island Energy attributed the service problems to problems with technology transfers as it moved customers from the system used by former utility operator National Grid to its own software in August 2024.
Both sets of fines are included in the refunds to customers.
Low-income customers are also poised to benefit from unrelated credits on their winter electric bills under a separate proposal, also approved by state regulators Monday. The $5 million in proceeds from the state’s regional gas cap-and-trade program was one of several initiatives proposed by Gov. Dan McKee to cool the rage at rising winter utility prices. Eligible customers, who qualify based on proof of participation in other state or federal assistance programs, will receive $46.61 off monthly electric bills from December through February, for a combined savings of $139.53, according to company filings.
Relief for federal workers
Meanwhile, federal workers and contractors who have gone without pay, or lost jobs, since the government shutdown began on Oct. 1 can temporarily stop paying their energy bills without risking fines or utility shutoffs. The policy change approved Monday was prompted by House Speaker K. Joseph Shekarchi, who asked state regulators in an Oct. 23 letter to step in to help the estimated 11,000 federal workers and active-duty military personnel in Rhode Island. In Massachusetts, utility supplier National Grid began a similar program on Oct. 21, offering a temporary pause in bill payments for federal workers and contractors.
Greg Cornett, Rhode Island Energy president, indicated willingness to launch a Rhode Island program in an Oct. 24 letter to state regulators, alongside an early start to the regular, seasonal moratorium on utility shutoffs for low-income customers who fail to pay on time. The seasonal shutoff suspension typically begins Nov. 1, but this year, began Monday. It ends on May 1.
Eligible federal workers and contractors and military personnel can qualify for suspended bill payments, along with discount rates and payment plans, by filling out a self-attestation form online. Repayment is expected once the shutdown ends, with payment plans and short-term extensions available.
An estimate on how many Rhode Island Energy customers are federal workers or contractors affected by the shutdown was not available.
Shekarchi praised the company and state regulators in a statement Monday.
“Thanks to the prompt action from both Rhode Island Energy and the Public Utilities Commission, the hardship being felt by these families will not be compounded by the fear of losing access to basic services like heat and electricity,” Shekarchi said.
This story was originally published by the Rhode Island Current.
