PUC OKs electric rate increases

Hike to be spread over 12 months; legislators eye changes to system

John Howell
Posted 1/1/15

In may be those who sat quietly through the Public Utilities Commission’s meeting on Tuesday – where electric rates of residential users were raised by 14.25 percent – who have the final say on …

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PUC OKs electric rate increases

Hike to be spread over 12 months; legislators eye changes to system

Posted

In may be those who sat quietly through the Public Utilities Commission’s meeting on Tuesday – where electric rates of residential users were raised by 14.25 percent – who have the final say on how the commission acts on future rate increases.

In contrast to many of those around them, state Rep. Grace Diaz and Rep.-elect Robert Lancia were silent observers Tuesday when the commission voted to increase the rates for the next 12 months.

The commission went into the meeting faced with the prospect of increasing electric rates by more than 24 percent based on National Grid’s “pass through” cost. Although it was difficult to hear what was being said over the yells and chants of the audience, the commission agreed to spread the increase over 12 months rather than limit it to the six months that had been requested.

The new rate, which will hike the current cost from 8.359 cents to 10.728 cents per kilowatt, will mean an increase of $12.34 in the monthly bill of a homeowner using 500 kilowatt-hours.

The commission, at the urging of Commissioner Herbert DiSimone, who reasoned it would be unfair to seasonal businesses to spread the increase over a year, divided the commercial rate increase into two bites – an 18.99 percent increase between January and June, and a 7.63 decrease from July to December.

But it was the commission’s inability to do anything but grant an increase to cover the higher cost of electricity that had Diaz and Lancia conferring. Both would like to see changes.

Diaz believes the three-member commission should include minority representation and possibly be expanded to five members. She also feels that legislators should have a say in rate increases. Such action would require legislative changes, and both were considering how best to do that.

Diaz said she would be conferring with the House leadership.

At times Tuesday, the audience – and in particular John Schermerhorn, who describes himself as a “very poor filmmaker” – were the center of the show as TV crews turned their cameras on them.

“You have to look me in the eyes when you screw me today,” Schermerhorn yelled. His comment was followed by shouts of “shame” and the chant, “tell the whole wide word this is people territory and the people know the story.”

When commission members countered they were following the law, Schermerhorn yelled for them to change the law. And when told that National Grid is simply passing on the cost of electricity and if not refunded they would face losses, the audience yelled they could afford it.

Commissioner Paul Roberti suggested National Grid could even go bankrupt, to which Schermerhorn shouted “yea.”

How National Grid will pay for the increase, now that the commission has spread it over 12 months, was not clear at the end of the meeting. National Grid spokesman David Graves couldn’t say how the decision would affect the company’s cash flow. He observed that traditionally, the cost of electricity declines during the summer months, and that that could affect rates. But, on the other hand, he said there’s no knowing, and costs could go up when the company enters the market again.

The higher costs have been pegged to the supply of natural gas used to generate more than 40 percent of the electricity used in New England. While natural gas is plentiful, getting it to New England states is the issue. The pipeline capacity is such that in order to meet the heating demands of homes and businesses, which take priority during the winter months, generating plants switch to oil that is more costly.

In her opening remarks, Commission Chair Margaret Curran said the matter before the commission “is a very narrow issue” regulated by state statute. She said the company is “entitled to recover” its cost of electricity and it “is nothing more than just the cost of power.”

Yet, she added, that Rhode Islanders “still face serious economic issues, and for that reason the commission would consider means to reduce the impact of the more than 24-percent increase.

Knowing that it would be a raucous session, staff at the commission had inquired whether it would be advisable to have police at the meeting. According to spokesman, Thomas Kogut, Curran chose not to have law enforcement in attendance.

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