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Legislators Object to National Grid’s Proposed 23.6 Electricity Rate Hike

Legislators from across Rhode Island are objecting to National Grid’s proposed 23.6 percent electricity rate hike.

By: Mark Schieldrop |

Legislators from across Rhode Island are objecting to the rate hike proposed by National Grid that could raise electricity rates by nearly 24 percent this winter.

“There just doesn’t seem to be any concern on the part of National Grid as to what a horrendous impact this proposed rate increase will have on Rhode Islanders, both residential and business,” said Representative Canario (D-Dist. 71, Portsmouth, Little Compton, Tiverton). “Rhode Islanders who are already struggling to make ends meet will be facing what is expected to be an additional $240 or more for electric next year. Businesses that are struggling just to stay open will also face significantly higher costs. This is just too much at the wrong time.”

Representative Edwards (D-Dist. 70, Tiverton, Portsmouth) agreed. “As our state works to improve its economic status, this enormous rate hike is going to be a major impediment to growth in the business sector and is going to put further financial pressure on families across the state that are trying to hang on. I understand the dynamics of this increase – commodity prices rise at this time of year, there is insufficient pipeline availability to bring enough gas to our region. People expect to see utility prices rise, but the size of this proposed increase is well beyond reasonable.”

Edwards and Canario join Sen. Leonidas P. Raptakis (D-Dist. 33, Coventry, East Greenwich, West Greenwich) and House Speaker Nicholas Mattiello of Cranston who also publicly stated they are concerned about the impact on both residential and commercial rate payers if the state Public Utilities Commission approves the rate increase.

As he did several years ago when he openly opposed a National Grid rate hike request, Senator Raptakis is calling on the PUC to reject the proposed increase and, in the future, to limit any increases by linking rate hikes to increases in the Consumer Price Index.

The legislation he plans to introduce in January – identical to a bill he sponsored in during the previous legislative session (2014-S 2175) – would provide that any rate increase with respect to electric distribution companies would be no greater than the Consumer Price Index for all urban consumers, as published by the U.S. Department of Labor Bureau of Labor Statistics.

In its most recent reporting, the Bureau of Labor Statistics put the CPI for urban consumers for all items including utilities at 1.7 percent for October, 2014.

“The Consumer Price Index is an economic measuring tool to adjust prices for the effects of inflation,” said Senator Raptakis. “Rather than allowing utilities to impose huge increases in the cost of their product, we can flatten out the impact of any proposed rate hikes by limiting the increase to keep it within the CPI.”

The increase, if approved — and the PUC rarely doesn’t approve rate increase requests — would bring a monthly bill to $109 from $88 on average, according to National Grid.

The reason for the increase?

The utility told state regulators in its filing that despite the plentiful supply of natural gas, the infrastructure to deliver gas to power generation facilities is constrained.

Only two pipelines serve New England and both are at capacity. That has put pressure on gas prices because more and more of the region’s power is being generated by natural gas burning power plants. The increased demand for gas in the winter has in turn made electricity more expensive to generate.

“The supply is there. We simply can’t get the gas here,” Michael LaFlamme, National Grid vice president for regulation and pricing in New England told the Providence Journal.

The proposed increase follows the utility’s 37 percent increase approved in Massachusetts.

The rate increase would go into effect Jan. 1 and would most likely decrease on June 30.