PROVIDENCE, R.I. (WPRI) — Rhode Island regulators on Thursday approved an electricity rate increase that is expected to increase consumers’ bills by an average of 23% this winter compared to current rates, but will also provide some financial relief.

The RI Public Utilities Commission has approved the rate increase proposed earlier this year by Rhode Island Energy, the state’s largest utility. As a result, the price of electricity for residential customers will rise from 10.4 cents per kilowatt-hour in the summer months to 16.4 cents per kilowatt-hour for the next six months, starting in October.

The new rate means the average customer’s bill will be about $31 a month, or 23 percent, higher than during the summer months. This year’s winter rate is slightly lower than last year, when it was 17.7 cents per kilowatt hour, a savings of about $8 a month.

At the same time, state regulators have also approved a plan to provide relief to residential customers. Rhode Island Energy will refund its customers about $27 million for overcharging them last winter. The money will be paid back in the form of credits designed to help offset monthly bills.

The company sometimes overcharges for electricity during the year when Rhode Island Energy is able to purchase electricity at a lower price than expected on the so-called spot market (which shows the real-time price of electricity).

Electricity prices can fluctuate at any time of day and depend on variable factors such as the amount of energy available and weather conditions. If there are savings, the company will review how much has been paid each year and will usually provide bill credits or pay refunds.

“In this case, rates have decreased slightly, so we will now refund our customers that money, plus interest,” Rhode Island Energy spokeswoman Caroline Pretyman said in a statement. “If we had collected too little, we would have to collect that money from customers.”

This year, the utility will give low-income customers a monthly rebate of about $23 for six months starting in November, state regulators said. The six-month rebate totals about $140 per household, which state regulators estimate almost completely offsets the rate increase.

Meanwhile, Rhode Island Energy customers on standard rates will receive a one-time credit of about $69 in December only. The utility is still figuring out what kind of relief will be given to commercial and industrial electricity customers, according to regulators.

Democratic Rep. David Morales of Providence has been a vocal critic of Rhode Island Energy’s winter rate increases. He said the financial relief would help some households but argued that the wild swings in electricity prices each year are unfair to customers – especially those on fixed incomes.

“I feel for the thousands of energy customers in Rhode Island – especially our seniors, our low-income families, those with children – who will bear the brunt of these rising utility rates,” he said.

Morales argued that there should be a universal tax credit for all income brackets during the winter, with funding coming from both the state and Rhode Island Energy.

Pretyman said the company “shares concerns about high energy prices,” but stressed that energy prices are driven by external macroeconomic forces over which the company has no control.

“It is important to note that we charge our customers the same as we pay generators to produce electricity, and we do not make a profit on the cost of electricity,” Pretyman said in a statement. “We are pleased that the bill credits will help mitigate some of the rate increase for the average residential customer and all of the rate increase for low-income customers this coming winter.”

Sarah Guernelli ([email protected]) is the consumer investigative reporter for 12 News. Contact her on Twitter and on Facebook.

Eli Sherman ([email protected]) is an investigative reporter for Target 12 News. Contact him on Twitter and on Facebook.

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