Rhode Island Energy overcharged state agencies by $2 million on 2024 energy bills — more than double initial estimates — according to a new state audit published on Sept. 5.
The 13-page report by Andrew Manca, chief of internal audits with the Rhode Island Office of Internal Audit and Program Integrity comes as state utility regulators deepen their own review of potentially more widespread billing errors by Rhode Island Energy.
“At this point, one of my concerns is that we don’t fully understand what the problem was, or how many people it affects,” Todd Bianco, chief economic and policy analyst for the Rhode Island Public Utilities Commission (PUC), said in an interview Thursday.
Flooded by customer complaints alleging artificially high winter energy bills, including from state government administrators, the PUC in May ordered Rhode Island Energy to hire a consultant to probe for evidence of billing inaccuracies. Last week, the PUC authorized a contract with Virginia-based professional services firm Guidehouse, Inc. — one of three firms to respond to Rhode Island Energy’s request for proposals. An initial kickoff meeting between parties was held Wednesday, Bianco said.
The cost of the Guidehouse contract has not been made public.
Under state regulators’ directives, Guidehouse has until Nov. 15 to report results of its own audit into Rhode Island Energy’s billing practices. Manca’s report, which exclusively covers the 2,250 Rhode Island Energy electric and gas accounts held by the state government, will be incorporated into Guidehouse’s review of other commercial and residential customers.
And if the state review is any indicator, the problem may be more pervasive than anticipated. In July, state auditors identified overcharges of roughly $1 million. The deeper dive revealed state agencies were actually overbilled by over $2 million, according to the audit report.
The primary cause identified by the state was the transition from a legacy billing system inherited when PPL Corp., Rhode Island Energy’s parent company, bought the state’s electric and gas operations from National Grid in 2022.
During the transition to a new billing software, bills from August through October 2024 failed to credit the state for excess renewable electricity it generated. Under the typical net metering bill practice, customers with solar panels, wind turbines or other renewable energy systems receive future bill credits for any energy they produce beyond what they personally use, and return to the electric grid.
Overcharges to Rhode Island state government have been mostly rectified, with the state using the credits toward its regular, monthly bills. Payments on gas and electric bills resumed in June and August, respectively, according to Manca’s report.
A single state gas account remains outstanding, having not been identified for overcharges in the data initially provided by Rhode Island Energy, Karen Greco, a spokesperson for the Rhode Island Department of Administration, confirmed via email Thursday.
‘Most unique customer’
Rhode Island Energy did not dispute the findings.
“Rhode Island Energy has been transparent and cooperative throughout the State’s audit process,” Michael Dalo, a spokesperson, said in a statement Thursday. “The State of Rhode Island is our largest and most unique customer, with over 2,000 bills from separate state entities consolidated into one. The timing issues identified through this audit were primarily the result of system changes during our transition from National Grid’s legacy platforms. We have addressed these issues, implemented corrective actions, and continue to strengthen our billing systems and processes. We remain committed to accuracy, accountability, and working closely with state partners to ensure reliable service.”
But the state audit doesn’t offer much reassurance that future errors won’t occur, or will be easily detected if they do. Manca highlighted the lack of automation and account mislabeling as systemic problems.
“The State of Rhode Island bears the burden of ensuring billing accuracy,” he concluded. These manual corrections introduce inefficiencies, increase administrative workload, and increase the potential for errors during invoicing.”
Bianco acknowledged that the state is a more complex customer than a typical household or business, with multiple buildings and accounts, along with separate, third-party suppliers for some of its energy. He was unsure whether the problems identified were isolated to the state, to large commercial accounts, or perhaps to net metering customers.
“There’s concern that the billing system did not perform, and other customers might have been impacted,” Bianco said.
This story was originally published by the Rhode Island Current.
