PROVIDENCE — Most Rhode Island homes and businesses will see a nearly 50% increase in their monthly electric bills starting Oct. 1, with energy rates in the state climbing higher than ever before, because of surging prices for fossil fuels and global market uncertainty.
Under rates filed Thursday with state regulators by Rhode Island Energy, the bill for the typical household that uses 500 kilowatt hours of power per month will jump from about $111 to more than $163, a 47% difference. Commercial customers, whose usage varies, will experience bill hikes ranging from about 41% to 51%.
Previously:Electric rates expected to be even higher than originally thought for Rhode Islanders
At 17.8 cents per kilowatt hour, the residential rate would be the highest on record going back at least to 2000. It’s more than double the rate currently in effect. The commercial rate will be 18.3 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. Unfortunately, those forecasts were accurate and the price of electricity this winter is something we have never seen before,” Dave Bonenberger, president of Rhode Island Energy, said in a statement.
Rhode Island Energy, the utility formerly known as the Narragansett Electric Company, is the state’s dominant electric and natural gas supplier, serving some 780,000 customers.
The company has been warning its half-million electric customers for months about a winter rate increase. As it tied up its final contracts for supplies over the past four months, the company kept seeing prices climb. The news kept growing grimmer as time went on, with the projection for the residential rate going up from 15.6 cents per kilowatt hours in March to 16.8 cents in May.
Earlier this summer:National Grid cheated the system, overcharged RI ratepayers up to $2.2 million
Rhode Island Energy didn’t know what the final price would be until it signed its last contract for pre-purchased supplies on July 13. The rates are contained in a filing made Thursday morning with the Rhode Island Public Utilities Commission.
While the commission still has final say over whether the rates go into effect, approval is expected. Energy rates are pass-through costs, determined by larger market forces. The utility does not mark up those wholesale prices. It profits instead off the delivery of energy. The new rates do not reflect any changes in delivery costs.
Rhode Island Energy, now owned by Pennsylvania-based PPL Corp. following a transaction with National Grid this past spring, adjusts its electric rates twice a year to reflect the ebbs and flows in market prices for energy between summer and winter.
Earlier this year:Legal settlement clears way for sale of National Grid’s business in RI
Rates typically go up in the cold-weather period from Oct. 1 to March 30 when demand grows for natural gas, the dominant fuel used in New England for electric generation and heating. When heating usage drops, rates follow during the warm-weather period from April 1 to Sept. 30.
But the difference this year between the summer and winter rates is. Even in apples-to-apples comparisons, the coming winter rate stands out. Last winter’s residential rate was 10.9 cents per kilowatt hour. The new rate is at least 50 percent higher than rates going back half-a-dozen years.
The economic recovery as the country emerges from the coronavirus pandemic — and accompanying inflation — is one reason for the spike in energy prices. Another is the war in Ukraine, which has driven up prices for oil and liquefied natural gas, which both have outsized effects on energy markets in New England. As a result, consumers in Connecticut and Massachusetts are already experiencing electric rate hikes.
Because Rhode Island Energy buys energy supplies on a different schedule than other utilities in New England, consumers in Rhode Island so far haven’t felt those increases. Current rates for customers in Rhode Island are the lowest when compared to rates in other New England states.
But that will change come October when the rates for Rhode Island Energy will catch up to some of the others.