Attorney General Neronha calls for responsible gas utility planning in Rhode Island

PROVIDENCE, R.I. – Attorney General Peter F. Neronha announced today that the Office has asked the Public Utilities Commission (PUC) to deny approval of a proposed plan submitted by Rhode Island Energy (RIE), where the company seeks a 3% increase over the next twelve months in the average annual gas bill (and proposed a plan that would see a 6.6% increase over the next 21 months). The Attorney General argues that RIE’s plan, which includes proposals to fund expansion of gas utility infrastructure in Rhode Island, fails to adequately account for Act on Climate mandates to reduce and eliminate greenhouse gas emissions.

In the filing submitted with the PUC, the Attorney General detailed concerns with Rhode Island Energy’s annual Infrastructure, Safety, and Reliability (ISR) Plan, arguing that by failing to fully account for the law that will require transformation of Rhode Island’s energy sector, RIE puts rate payers at risk of paying for investments that may not be reasonable or necessary and may become obsolete.

As proposed, the company’s spending plan would increase the average gas customer’s annual bill by $51.23 over the next 12 months.

“The laws and agencies that regulate energy public utilities exist to ensure that Rhode Island ratepayers receive reasonably priced, safe, reliable, and environmentally responsible energy,” said Attorney General Neronha. “Rhode Island has set critical emissions goals via the Act on Climate, and recently ratepayers have been burdened with rising costs of unstable gas pricing. Rhode Island Energy’s annual infrastructure plan should account for these realities instead of seeking further growth in fossil fuels.”

“This Office is skeptical about how responsible it is for Rhode Island Energy to needlessly invest in gas infrastructure when clearly Rhode Island has not arrived at a plan for the future of gas, and especially when investment costs will be borne by ratepayers,” added Attorney General Neronha. “Rhode Islanders everywhere are right to be concerned about their energy bills, and this Office is paying close attention to the regulatory process in which they are set.”

In 2021, the Act on Climate set important decarbonization goals that the PUC is obligated to consider when making decisions, including approval of an ISR plan. The Attorney General has asked the PUC to hold the company to a reasonable budget to avoid investments in infrastructure without accounting for the uncertain future of natural gas. Failure to do so could place an unfair, unnecessary and long-term financial burden on ratepayers.

In the filing, the Attorney General further scrutinized the proposal noting that:

• Rhode Island Energy has not provided a full analysis of its long-term plans for the gas distribution system in light of the Act on Climate. Despite this, the Company seeks approval of the increased spending proposed for the next twelve months.

• The company’s proposal expects Rhode Island ratepayers to shoulder a nearly $18 million increase in costs to cover all expenses compared to last fiscal year.

• The 3% (or $51.23) increase in the average annual bill proposed for the next twelve months would be over and above the potential spikes in consumer cost resulting from increasingly unstable gas supply pricing. By way of example, for the period from November 1, 2022, to October 31, 2023 the average annual bill rose some 15%, costing the average ratepayer an additional $227.23.

• Rhode Island energy is also proposing to build an $11.27 million weld shop intended to allow the company to take on larger ISR projects itself, rather than outsourcing that work as it currently does. This proposed expenditure falls far short of a showing, as required by law, that it is “reasonably needed to maintain safe and reliable distribution service.”

The PUC has scheduled public hearings on Rhode Island Energy’s ISR plans on March 14 and 15, 2023.

RIAG energy advocacy

In 2022, the Attorney General fought to secure more than $200 million in value for Rhode Island ratepayers, along with mandated steps toward meeting Act on Climate goals, after challenging the approval of the sale of Narragansett Electric by National Grid to PPL Corporation, DBA Rhode Island Energy. The agreement provided for $50 million in ratepayer credits, and $43.5 million in discharge of bill amounts for low-income and protected residential customers, the cost of which would likely have been borne by ratepayers. In addition to this direct ratepayer relief, the Attorney General required that PPL forgo recovery of $103 million from ratepayers: $82 million in costs for new investments it will make as a result of the sale and $21 million of costs already incurred by National Grid.