RI Governor’s $28M residential electric bill relief plan leaves questions as RI Energy seeks 15% rate increase

Gov. McKee’s $28M electric bill relief plan leaves unanswered questions about RGGI funds

Universal credits would provide approximately $61 to every residential electric account. The administration has not identified the precise fund balances or explained how previously announced energy allocations will be preserved.

Rhode Island Energy filed a proposed winter electricity supply increase Wednesday. By Thursday, Governor Dan McKee had declared an “energy affordability emergency” and signed an executive order directing state officials to seek approval for $28 million in residential bill credits.

The credits would be funded through Rhode Island’s participation in the Regional Greenhouse Gas Initiative, commonly called RGGI, and would provide approximately $61 to each of more than 450,000 residential electric accounts.

The money would be divided among three winter bills, producing a credit of approximately $20 per month.

The relief would be automatic, with no application, income test or requirement that a household heat with electricity.

It is separate from assistance available through LIHEAP, United Way’s 211 service and/or the Good Neighbor Energy Fund.

But both sides of Thursday’s announcement remain proposals.

Rhode Island Energy has asked the Public Utilities Commission to approve its winter supply rate. McKee’s executive order directs the Office of Energy Resources to ask the PUC to approve the credits and the method of placing them on customers’ bills.

Neither has been approved.

What Rhode Island Energy is proposing

Rhode Island Energy’s filing proposes a winter Last Resort Service supply charge of 17.029 cents per kilowatt-hour from October 1, 2026, through March 31, 2027.

That is 15.3% higher than last winter’s supply charge of 14.770 cents.

The 15% figure applies to the electricity supply or commodity charge—not automatically to a customer’s entire bill, which also includes delivery charges and other assessments.

Compared with the current summer rate, Rhode Island Energy estimates that a standard residential customer using 500 kilowatt-hours per month would see the total bill increase by approximately $30.93, or 21.4%.

The two percentages compare different things:

• The 15.3% increase compares the proposed supply price with last winter’s price.
• The 21.4% increase compares a standard customer’s estimated total winter bill with the current summer bill.

The filing remains under review in PUC Docket 26-27-EL.

Last Resort Service is the default electricity supply purchased through a PUC-approved procurement process for customers who have not selected another supplier or joined a municipal aggregation program.

Rhode Island Energy estimates that Last Resort Service represents approximately 73% of residential electricity consumption. Its supply charge is passed through to customers without a profit markup by Rhode Island Energy.

Customers using competitive suppliers or municipal aggregation programs are not directly subject to this particular supply-rate filing.

McKee’s credit, however, would go to every residential electric account—including accounts not affected by the proposed Last Resort Service increase. The governor’s release does not say whether seasonal or second-home accounts would be excluded.

What does the $61 actually offset?

The McKee administration says the approximately $61 in total credits would “fully offset” the rate increase for the average customer during the three most expensive winter months.

That depends on the comparison.

For Rhode Island Energy’s standard customer using 500 kilowatt-hours, the proposed supply rate is approximately $11.30 more per month than last winter’s rate. Over three months, that totals about $33.90. A $61 credit would more than cover that year-over-year difference.

Compared with this summer, however, the same standard customer’s bill would rise by approximately $30.93 per month—or nearly $93 over three months. In that comparison, the $61 credit would cover about two-thirds of the increase.

Households using more electricity would experience larger increases.

The governor’s release did not provide the electricity-usage calculation behind its “average customer” claim.

Rhode Island Energy details existing assistance for customers

In a statement issued Thursday, Rhode Island Energy emphasized that the proposed supply price is a market-based pass-through cost that the company says it does not control or profit from. The proposed Last Resort Service price of 17.03 cents per kilowatt-hour compares with 14.77 cents last winter. The company estimates that a residential customer using 500 kilowatt-hours monthly would pay approximately $12 more per month than last winter.

Rhode Island Energy said Last Resort Service represents approximately 42% of total statewide electric demand. Its regulatory filing separately indicates that Last Resort Service supplies approximately 73% of residential electricity consumption. Customers using competitive suppliers or municipal aggregation programs are not directly subject to this particular rate filing, although Rhode Island Energy says the same regional market pressures could eventually affect those prices.

The company directed customers needing help toward Budget Billing, energy-efficiency assessments, the Good Neighbor Energy Fund, LIHEAP, discounted rates and its customer advocates. It also said it has doubled its contribution to the Good Neighbor Energy Fund, established an employee-funded program called Operation Help and negotiated enhancements to the low-income discount program. Unlike the Governor’s proposed automatic credit for every residential account, most direct-assistance programs have financial or other eligibility requirements.

What is RGGI?

RGGI – Regional Greenhouse Gas Initiative – is a cooperative carbon-control program involving Rhode Island and nine other Northeastern and Mid-Atlantic states.

Large fossil-fuel power plants must obtain an allowance for each ton of carbon dioxide they emit. Those allowances are sold at quarterly auctions, and the proceeds are divided among participating states.

The direct purchasers are power generators and other approved market participants. However, power generators may incorporate the cost of purchasing allowances into wholesale electricity prices, meaning consumers may indirectly bear some of that cost.

Rhode Island law permits the state’s proceeds to be used for energy efficiency, conservation, renewable energy, “cost-effective direct rate relief for consumers” and direct relief for low-income consumers.

The money is not unrestricted state revenue, a contribution from Rhode Island Energy or outside emergency aid. Its purpose is to provide public energy and environmental benefits.

The state Office of Energy Resources normally publishes a proposed allocation plan following each auction, conducts a public hearing, accepts written comments and then adopts a final plan. The process is described on OER’s RGGI allocation page.

Two auctions produced almost exactly $28 million

The $28 million cited by McKee closely matches the gross proceeds Rhode Island received from its two most recent RGGI auctions:

• Auction 71, conducted March 11: $13,835,313.66
• Auction 72, conducted June 3: $14,398,405
• Combined gross proceeds: $28,233,718.66

The close match suggests the two recent auctions may be the source of the governor’s $28 million proposal. However, the administration’s release does not specifically identify those auctions, and the state has not released a detailed accounting showing which balances will be used.

After administrative and auction-related expenses identified in the two state plans, the combined amount listed as available for programmatic allocation is approximately $25.36 million—not $28 million.

If the proposed credits are to total the full $28 million, the administration would need to identify additional RGGI balances or explain how it calculated the available amount.

The first auction’s proceeds already have a final plan

OER adopted its final 2026-A allocation plan on May 11.

The plan distributes approximately $12.4 million in net proceeds from the March auction as follows:

Planned use	Allocation
EV-charging equipment	$2.5 million
Ground-source heat pumps and geothermal projects	$2.5 million
Heat pumps, appliances and weatherization through Clean Heat RI	$2.38 million
Window heat-pump pilot for low-income multifamily buildings	$2 million
Bill credits for low-income A-60 customers	$1 million
Energy-efficiency projects in public schools	$2 million
Energy projects at state facilities	$20,830

A final allocation does not necessarily mean every dollar has been spent or contractually committed. OER’s plans reserve authority to reallocate programmatic funds in response to changes in state or federal energy policy and other energy-market developments.

Nevertheless, the money was assigned a public purpose through the state’s established allocation process.

The second auction’s plan is still open for public comment

OER published a proposed 2026-B allocation plan on June 12 for the proceeds from the June auction.

The proposal assigns nearly $13 million to:

Proposed use	Allocation
High-efficiency heat pumps and heat-pump water heaters	$4.5 million
EV-charging equipment	$2.5 million
Multifamily home-efficiency improvements	$2 million
Municipal energy-efficiency and renewable-energy projects	$1.25 million
Window heat pumps for low-income multifamily buildings	$1 million
Microgrid studies and construction grants	$1 million
Plug-in solar incentives	$500,000
Tree Equity RI	$200,000

A public hearing was held July 13. Written comments remain open through Friday, July 24—one day after McKee announced that $28 million in RGGI funds would be pursued for universal bill credits.

The administration has not explained whether the proposed 2026-B plan will be withdrawn, revised or financed through a different source.

“No existing projects” will be disrupted

McKee’s release states that using the $28 million “will not disrupt any existing RGGI projects or programs.”

That statement may depend on how the administration defines an existing project.

Money can be publicly allocated or proposed for a program without having been spent or legally committed to a specific contract. Redirecting uncommitted money may not cancel an active construction project, but it could still prevent a planned rebate, efficiency program or future project from proceeding as originally announced.

The administration has not provided enough information to determine whether that is happening.

Other possibilities include using older RGGI allocations that remain unspent, combining recent auction money with accumulated balances or using future auction proceeds to replace money redirected to the bill credits.

Until OER releases an amended allocation plan and fund accounting, it is not possible to identify which programs, if any, will be canceled, reduced, delayed or refinanced.

Universal rather than targeted relief

In past years, McKee directed RGGI money primarily toward low-income electric customers. The governor says the current affordability problem extends to working and middle-class families who may earn too much to qualify for traditional assistance.

That does not fully explain why the same credit would go to every residential account, regardless of financial need or whether the account is affected by the Last Resort Service filing.

A $60 credit provided to 100,000 households would cost approximately $6 million. Providing the same credit to 450,000 accounts costs approximately $27 million.

The administration has not released an analysis comparing universal relief with alternatives such as:

• Limiting credits to low- and moderate-income households.
• Providing larger credits to customers facing shutoff or substantial arrears.
• Expanding eligibility beyond the existing low-income rate without covering every account.
• Preserving more RGGI funding for weatherization and efficiency measures that reduce bills over several years.

Universal credits have advantages: they can be distributed quickly, require no application and avoid excluding households whose incomes are slightly above assistance limits.

The tradeoff is that limited public money also goes to households for which a $20 monthly credit is unlikely to be financially consequential.

What is driving the proposed rate?

Rhode Island Energy identifies several contributors to the proposed winter supply price, including higher regional costs for day-ahead ancillary electricity services, a higher Rhode Island Renewable Energy Standard charge, natural-gas and wholesale-electricity prices, liquefied natural gas export demand, lower European gas inventories and geopolitical uncertainty.

McKee’s release repeatedly attributes the disruption to “Trump’s War in Iran.” That is the administration’s political characterization. Rhode Island Energy’s filing refers more broadly to geopolitical uncertainty and global natural-gas conditions; it does not specifically identify the Iran conflict as the cause of its proposed rate.

The governor also highlighted ISO New England’s Day-Ahead Ancillary Services Initiative, or DASI.

An assessment by ISO New England’s Internal Market Monitor estimated approximately $974 million in first-year incremental costs, compared with an earlier impact assessment of roughly $140 million.

The $974 million figure is supported by the monitor’s report. However, the original $140 million analysis was not intended as a price forecast. The monitor estimated that approximately 75% of the difference resulted from changing market fundamentals, with roughly 25% associated with participant offers and other market-design effects.

A response prepared in advance

Rhode Island Energy’s PUC filing is dated Wednesday, July 22. McKee signed the executive order Thursday at a United Way event attended by state agency leaders and utility-assistance advocates.

The event included a completed executive order, detailed financial figures and prepared statements from multiple officials.

Advance coordination among the utility, regulators and state energy officials would not be unusual. However, the administration has not disclosed when it first learned of the proposed rate, when it began preparing the $28 million response or when Thursday’s event was scheduled.

Questions still awaiting answers

Before the credits can be fully evaluated, OER and the governor’s office should provide this information:

• Precisely which RGGI auctions, accounts and balances comprise the $28 million?
• How does the administration reach $28 million when the two recent plans identify approximately $25.36 million in net program proceeds?
• Will any allocations in the finalized 2026-A plan be redirected?
• What happens to the proposed 2026-B programs?
• Will OER publish a revised allocation plan and provide another opportunity for public comment?
• Which projects have already received contracts or legally binding commitments?
• Will competitive-supplier, municipal-aggregation, seasonal or second-home accounts receive the credits?
• Why was universal relief selected instead of targeted low- and moderate-income assistance?
• When did the administration learn of Rhode Island Energy’s filing and begin preparing its response?

Rhode Island Energy has proposed a higher winter supply price. McKee has proposed using $28 million in public energy proceeds to soften its effect.

The state has explained who would receive the money. It has not yet provided the accounting needed to show precisely where the money will come from or what previously announced plans may change.

Disclosure: Rhode Island Energy places educational advertising in RINewsToday. The company had no role in the reporting or editing of this article.