We’ll be able to develop rates that charge you differently based on when you consume your energy. So if you’re savvy enough, you’ll be able to push your dishwasher off to the evening, and you’ll save on electricity”

Nicholas Ucci, Rhode Island Energy

A group of East Bay residents filled the Herreshoff Room at Rogers Free Library Monday evening hoping to answer one big question: Why have my energy bills increased so dramatically this winter? They found not one big answer, but a multitude of small ones.

The public forum, led by two Rhode Island Energy employees, was hosted by local legislators and attracted a group of vocal and, at times, agitated audience members. Brian Schuster, head of external affairs for Rhode Island Energy, and Nicholas Ucci, the company’s director of government affairs, came with a lengthy slide show, much of which they never got through. The audience frequently interjected with questions and opinions.

One of the first messages from the two presenters is that the worst of the price spike — where energy supply costs rose about 60% from summer to winter — is nearly behind us. In a slide labeled “Relief is Coming,” they conveyed that both electric and gas bills will begin to fall when summer electric supply rates take effect on April 1, aided by warmer weather reducing heating demand. They reported that bills should decrease 17 percent, with electricity supply rates falling slightly lower than they were last summer.

Nevertheless, energy costs will remain relatively high here in New England, as compared to other parts of the country. New England is the third-most expensive region in the country, behind only California and Hawaii. During the forum, Ucci talked about some of the challenges of providing energy in the Northeast.

“We’re the only region in the country that has to rely on liquefied natural gas to get us through the winter,” Ucci said. “And during the winter, in particular, we need natural gas to heat homes, and to produce the majority of the electricity in the region. And that natural tension, and the fact that we just don’t have enough supply, raises prices, particularly during the winter months.”

The presenters explained that New England derives its energy from a multitude of sources, mostly from plants located in this immediate region, but also from some located in New York and Canada. Ucci reported that the bulk of the region’s energy, about 51 percent of it, comes from natural gas. About 23 percent of the energy comes from nuclear sources, 11 percent comes from renewable sources, 10 percent is imported from Canada, and roughly 7 percent comes from hydro-electricity generators.

Because of New England’s heavy reliance on natural gas, and the fact that the three major pipelines bringing gas to the region cannot supply enough to meet demand in the peak winter cold snaps, this part of the country is heavily dependent on liquefied natural gas, sailed in by tankers. One of the world’s biggest producers of liquefied natural gas in the Ukraine.

Schuster said that the war in Ukraine, because of the disruptions to the supply side, changed everything for New England. Disruptions in supply helped drive up prices. He also warned about more potential disruption from geopolitical factors. “Another event that’s right at our doorstep, in New England, is Canadian tariffs. We rely on energy from Canada here in New England. Guess what’s going to happen to your bill if those energy tariffs go into effect? You’re going to start to feel those impacts,” Schuster said.

Both of the representatives from Rhode Island Energy said their company does not make money on buying energy. “We have to be able to buy energy, to make sure you can have your lights on, have your heat on, from the sources we’re able to get it from. We have to operate within the market. And we try to buy that electricity at the lowest possible cost, and we pass that cost on to you, dollar for dollar, with no markup, by law,” Schuster said.

Profits for the utility

Schuster and Ucci explained how Rhode Island Energy works, and why it operates with what some in the audience considered to be hefty profits. The company’s profit last fiscal year was $88 million.

Yes, the company is a public utility, but it is also funded by investor capital. Investors seek profits, and Rhode Island Energy delivers those profits. However, Ucci explained,

Its profits are not exorbitant. “Our base distribution rates have not changed since 2018, nor has our Return on Investment, which is right now about 4 percent. Both gas and electricity right now are around 4 percent return on investment,” Ucci said. “You can go right now and get a government treasury bond for 4.67 percent, and we’re earning less than that. So when you compare the profits we’re making, with other industries, and certainly other utilities, we’re modest at best.” He later added, “Everything we do is transparent, and we’re earning about half of what we could earn.”

Bristol resident Paula Martel, shown asking a question during Monday’s forum, at one point got frustrated with the presentation by Rhode Island Energy officials and said, “Year over year, you’re using less energy, but your bill is doubling.”

Government programs

During the forum, the presenters also delved into the details that appear in each month’s gas and electric bills, talking about the impacts of government programs on every Rhode Island customer. Several charges on every utility bill support investments in alternative energies, like solar and wind power development. “Through about 20 years of policy, Rhode Island has become a national leader on clean energy and environmental issues,” Ucci said. “That is a policy choice that the state has made, and we support that. We want to help Rhode Island get to where it wants to go. But we’re also honest that, in trying to achieve those goals, investments have to be made. And by law, many of those investments are funded through utility bills.”

Added Schuster, “Those are investments back into the community. They’re helping reduce greenhouse gas emissions. They’re fostering new energy resources, which is beneficial to us as a utility, but it comes at a cost, and those program costs have been escalating rapidly.”

Ucci said several bills have been introduced in the General Assembly this year that would revisit some of the laws impacting energy bills — not to remove those programs, but to modernize them from when they were first put in place. “You’re never going to hear us say, ‘Throw these programs out.’ You’re never going to hear us say, ‘Stop investing in renewables.’ We know that is integral to who we are, as Rhode Islanders. That’s part of the choices we’ve made. But, can we implement these programs in a more cost effective way?”

(Get more information about the free audit program at the Rhode Energy website.)

A free energy audit

During the forum, presenters urged everyone to sign up for a free energy audit, courtesy of Rhode Island Energy. Said Schuster, “If you haven’t had an energy audit in the past three years, you should. It’s free, it’s no obligation, and you’re paying for it in your bill. Go on our website and sign up for a free energy audit. An energy specialist will come to your home, they’ll look at your insulation, they’ll look at air leakage across your home, they’ll look at your lights, your appliances … The cheapest energy is the energy you never use in the first place.”

After being told that customers who do not allow new “smart” meters in their homes will be charged a $20 per month fee, audience member Richard Matton, of Warren, asked if customers who opt into the program will receive a $20 per month credit. The answer was no.

New smart meters, ‘smart’ rates

Rhode Island Energy is also beginning to plan for a major rollout of new meters to customers throughout the state. The new “advanced” meters will transmit information directly to the company, without relying on traditional meter-readers to visit customers.

The new meters will also transmit data about when energy is being consumed in the home, allowing Rhode Island Energy to apply different rates for different times of day. Energy consumed during peak times — the middle of the day — will be charged a higher rate than energy consumer at off-peak times.

“We’ll be able to develop rates that charge you differently based on when you consume your energy,” said Ucci. “So if you’re savvy enough, you’ll be able to push your dishwasher off to the evening, and you’ll save on electricity.”

Said Schuster, “Those are called ‘time-of-use’ rates, and you’ll be hearing a lot more about those.” He said these types of meters are being used widely around the country, and Rhode Island is lagging behind most regions in installing them.

The meters will be installed for no cost to the consumer. However, those who do not allow the smart meters in their homes or businesses and decide to opt out of the program, will be charged a $20 per month fee in their bills.

Audience member Richard Matton, of Warren, asked if there will be a $20 credit for those who opt in to the program.

The answer was no.