Seth’s 1/14/2023 Projo Commentary: In RI, it’s ‘Groundhog Day’ on electric rates

Rhode Island Energy has set record high electric rates for Rhode Island, a 47% increase per household and up to 51% for commercial accounts (‘Record-high winter electric rates sought: ‘Something we’ve never seen before,’ ‘ News, July 21). The Journal reported that regulators were likely to approve the increase claiming that these are ‘pass-through costs’ determined by market forces. The utility reportedly does not profit from the pricing of electricity, it ‘profits instead off the delivery of energy.’

When the rates were then approved, The Journal noted that inflation and ‘a global energy crunch caused by the war in Ukraine’ had caused the rising rates and quoted Public Utilities Commission member John Revens, ‘We have limited authority to what we can and can’t do’ (‘State panel OKs record rate hike,’ News, Sept. 24). Now that National Grid sold Narragansett Electric Company for $3.8 billion, let us refocus.

Rhode Island Energy sent a brochure with my last electric bill. The electricity cost 18 cents per kilowatt hour. The ‘delivery service’ was 14 cents per kWh, over 10 cents of which is the cost to move electricity — the ‘distribution’ and ‘transmission’ charges. ‘Delivery service’ fees are PUC reviewed and approved. Ratepayers need to understand their capacity to impact bills. Rate proceedings that cannot address or control rates frustrate public interest and involvement.

In 2017, Rhode Island’s report ‘Transforming the Power Sector’ found that our electric utility grows its business and its shareholder earnings by investing in capital projects. It wrote, ‘The utility neither benefits nor is penalized from increasing electricity supply costs that customers pay,’ noting that many industries have become more efficient over the past few decades, but that nearly half of the utility’s capital investment in capacity to serve our peak demand for electricity is not utilized most of the time. That is avoidable cost.

In 2016, experts studied how best to control our costs, and unanimously recommended time of use rates to reduce peak demand and peak system costs. National Grid spent $15 million studying that recommendation but did not act — leaving the state and its successor wondering whether their studies are ‘obsolete.’

Rhode Island’s Energy Plan (2015) also documented the security and cost risks of our dangerous overreliance on imported natural gas for our heating, cooling and electrical needs. It warned that the status quo was our most costly option.

On Oct. 1, The Journal’s business section reported ‘In one tiny town, nobody worries about energy bills.’ The article was about Feldheim, Germany, which has been energy self-sufficient for over a decade. It has its own local grid system running on wind turbines, solar energy and battery storage. It expanded a biogas plant designed for pigs to pump hot water through a villagewide thermal system while providing farmers with income. While most Europeans are ‘opening their electric bills with trepidation … bracing for hefty price hikes as utility companies pass on the surging cost of natural gas, oil and electricity tied to Russia’s war in Ukraine,’ Feldheim’s residents ‘enjoy some of the lowest electricity and natural gas rates in Germany.’

Our people ought to better understand their capacity to take action to reduce energy costs. Our utility and our regulators must empower and encourage them to do so. One start is to stop opposing reforms and programs proposed to facilitate local energy solutions that produce lower rates.