Rhode Island Energy customers will see their monthly electricity bills increase by about 23% starting Oct. 1 under new rates approved by utility regulators. (Getty Images)

In the end, the much-maligned winter electric rate hikes won’t be as burdensome as initial calculations suggested, thanks to a nearly $27 million refund distributed to Rhode Island Energy customers.

Still, the 500,000 state residents who opt to get their electricity from Rhode Island Energy — rather than an outside supplier — will see their electric bills go up starting Oct. 1, under seasonal rate hikes approved by the Rhode Island Public Utilities Commission on Thursday. 

Based on calculations submitted by Rhode Island Energy, the average residential customer will see their monthly electric bill increase about 23%, or $31. Business and industrial customers would also see their bills rise, with the increase dependent upon usage.

The seasonal, six-month increase is not unexpected; rates typically increase in the winter due to higher demand and limited supply. State law prevents Rhode Island Energy, the primary utility provider for the state, from profiting off the energy it purchases from third-party suppliers.

The upcoming rate hikes are also slightly lower than rates from last winter.

And, customers will also get separate bill credits to refund them for the $27 million they were overcharged by the company in 2023 due to accounting errors. 

For most residential customers, the refund will be given as a one-time credit of $68.60 on their December bills. Low-income customers will get an even higher refund of roughly $140, spread out in monthly installments of $23.47 from November 2024 through April 2025.

The extra refund for customers who qualify for income-restricted government assistance programs attempts to ease the pain for the state’s most vulnerable residents, many of whom are already struggling to afford basic needs. The impact of higher winter utility bills on low income families was the central focus of a public hearing on Sept. 9, in which critics, including affected residents, lamented the increasing costs of food, rent and utilities.

“I think this is the fairest way to do it,” Commission Chairman Ron Gerwatowski said Thursday. 

Commercial and industrial customers will also get a one-time refund on their bills, with the amount based on usage.

Customers in seven municipalities — Barrington, Central Falls, Narragansett, Newport, Portsmouth, Providence, and South Kingstown — can opt out of Rhode Island Energy electric prices and participate instead in a community aggregation plan that leverages bulk buying power to secure lower-priced electricity for its residents. 

Good Energy, the consultant hired to coordinate the community aggregation plan for participating municipalities in Rhode Island, was not immediately available to comment on its upcoming winter rates on Friday. State regulators do not have any role in the contracts between municipalities and energy suppliers, or the agreed-upon rates.

Rhode Island Energy did not immediately return inquiries for comment Friday. 

Separately, the company has also proposed higher natural gas rates, which, if approved, would take effect Nov. 1. The proposal, which translates to a nearly $42 increase for the average residential customer’s annual bill, remains under review by state regulators.

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