Rhode Island utility customers could soon see the effects of a major rate decision in their monthly budgets, as Attorney General Peter Neronha asks state regulators to reject Rhode Island Energy's bid to raise its allowed profit margin to 10.75%, a move tied to a proposed $230 million rate increase that would affect more than 770,000 electric and gas customers.
Here's what to know
The fight, as Uprise RI reported, is over Return on Equity, or ROE, the profit percentage a utility is permitted to earn through the distribution side of customer bills. Rhode Island Energy's current ROE is 9.275%.
Now, the company is asking regulators to approve an increase of that figure to 10.75%. The increase coincides with a request to raise utility rates in the region.
Uprise RI reported the company is asking for about $65.9 million in first-year electric distribution increases and about $114.7 million in first-year gas distribution increases, with another increase planned for the second year. Under the proposal, the average residential electric bill would increase by about $7.78 per month, and the average residential gas bill would increase by about $343.53 per year.
More background
Neronha's office says a 10.75% profit level does not reflect current economic conditions and would put the company's interests ahead of ratepayers. It has cited lower comparison points, and argued that utilities collect their approved return on each dollar invested in infrastructure, Uprise RI reported.
His office is also asking for changes beyond the ROE dispute. Neronha wants the Public Utilities Commission to eliminate Line Extension Allowances, which use ratepayer money to support new gas hookups, speed up the rollout of Time of Use electric rates, and require gas-and-electric planning that matches the state's Act on Climate.
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Subsidizing additional gas infrastructure can lock in future fossil fuel dependence and higher costs, while delayed pricing reforms can slow potential savings for households that shift energy use to off-peak hours.
What's being done?
According to Uprise RI, the three-member Public Utilities Commission that oversees the proposed ROE increase has until September 1 to make a ruling. The vote comes after 17 days of evidentiary hearings in which the attorney general's office presented its case.
Rhode Island Energy says, as the outlet reported, its rate increase proposal is intended to cover the cost of providing safe, reliable service while supporting infrastructure upgrades, customer service improvements, and affordability programs.
Company president Greg Cornett has argued that inflation is up nearly 30% since the last filing and that the utility is "keenly aware of the challenges so many of them are facing."
The outcome could shape not only near-term utility bills but also whether regulators push back on business decisions that shift costs onto the public.
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