Rhode Island Winter Electric Default Rate Climbs Above 17 Cents per kWh

Rhode Island Energy’s standard winter supply rate has risen to 17.029 cents per kilowatt-hour, compared with 11.092 cents in the summer. Wholesale power costs in September were higher than a year earlier even as natural gas prices declined, and a new utility proposal would move more summer buying into the spot market.

ISO New England’s September market report, released Oct. 30, begins with two numbers that suggest pressure on the grid: wholesale electricity in the real-time market averaged $39.43 per megawatt-hour, up 16.3% from September 2025, while the day-ahead market averaged $41.46, up 21%.

The rest of the report is more mixed. Real-time prices were down 27.6% from August. Natural gas, which ISO says produced 54% of New England’s power in 2025 and usually helps set the wholesale price, averaged $1.75 per MMBtu in September. That was 13.4% lower than a year earlier and 21.9% below August.

Power rose, gas fell.

Demand was nearly flat. The region consumed 8,974 gigawatt-hours, 1.7% more than the same month a year earlier, with average temperatures of 63 degrees, two degrees cooler than the comparable period last year.

What shows up on your bill

For Rhode Island households, the rate that matters this winter came from a separate process. Rhode Island Energy’s default residential supply rate is 17.029 cents per kilowatt-hour from Oct. 1 through March 31, according to the utility’s filing with the Public Utilities Commission. That default, known as Last Resort Service, is the cost of electricity itself if you have not chosen a competitive supplier or enrolled in a municipal program. This summer the rate was 11.092 cents. Last winter it was 14.770 cents.

The figure is not a direct live reflection of wholesale markets. In responses to PUC questions filed Sept. 4, the utility said roughly 85% of winter residential supply comes from fixed-price contracts, while 15% is purchased on the spot market. The company filed the winter rate on July 22. Its most recent procurement filing says fixed-price contracts shift price and load risk to suppliers in exchange for a set dollar-per-megawatt-hour price. Wholesale prices influence the default rate, but only indirectly.

Different explanations, different measures

Rhode Island Energy, which has been owned by PPL since 2022, says the main reason for the winter increase is a sharp rise in administrative costs tied to a new ISO New England rule designed to support grid reliability and ensure enough resources are available during periods of high demand and system stress. The company also points to higher gas costs and geopolitical uncertainty. Company spokesperson Michael Dalo said the rule was responsible for 61% of the increase in the utility’s winter electric rates.

ISO spokesperson Mary Cate Colapietro said the rules make up less than 7% of total costs, and that ISO has submitted refinements to its federal regulator to improve cost effectiveness. One figure refers to a share of the increase; the other refers to a share of total cost.

Who is offsetting the increase

State relief comes in the form of credits. Gov. Dan McKee’s office said in late September that the PUC approved $28 million in winter bill relief: $20.45 per residential account in each of January, February and March 2027, or $61.35 per account. The governor’s office said the credit will reach more than 450,000 residential accounts.

In addition, electric customers receive about $14 a month beginning in October under a hold-harmless settlement stemming from PPL’s 2022 commitment to shield customers from acquisition-related tax costs. Those credits continue monthly through September 2027.

Both are flat per-account credits. The supply charge, by contrast, rises with every kilowatt-hour a household uses.

The shareholder side

The usual version of this story is simple: customers absorb the swings while investors are protected. The rate-case record is more detailed. On Aug. 21, the PUC left Rhode Island Energy’s allowed return on equity — the profit rate regulators permit on the company’s equity — at 9.275%, rejecting the utility’s request for 10.75%. It also set the equity ratio at 52%, below the 57% the company had proposed, according to Attorney General Peter Neronha’s office, which said the decision delivered about $170 million in bill credits. The PUC also required shareholders to pay about $1 million a year for new offices in Johnston.

A move aimed at summer, not winter

On Oct. 23, Rhode Island Energy filed a three-year purchasing plan covering Jan. 1, 2027 through Dec. 31, 2029. The company wants the PUC to raise the share of power bought on the spot market from 15% to 25% from April through September, with a corresponding reduction in fixed-price contracts. Winter would remain at 15% spot market purchases.

The filing says its backcast estimates $5.64 million in combined savings from buying an additional 10% of summer power on the spot market since 2016. The same filing acknowledges that spot purchases can at times cost more than fixed-price contracts, and its analysis says 75% to 85% of load would still be under fixed-price contracts. More of the summer supply would be exposed to market swings in both directions.

Providence’s rate

Providence Community Electricity, the city’s program, set its default winter rate at 16.929 cents, one-tenth of a cent below the utility’s. The city’s product page says its prices include a $0.001-per-kilowatt-hour fee for its aggregation consultant. Its summer residential rate was 13.519 cents. The city says bill credits will keep total costs at or below summer levels.

What customers can do

The 2027 purchasing plan is available under PUC Docket 26-38-EL. The PUC’s commission clerk is Stephanie De La Rosa, 89 Jefferson Blvd., Warwick, [email protected]. Households on SNAP or Medicaid may qualify for Rhode Island Energy’s discount rates of 25% to 30%, according to the city of Providence, which also directs customers to the utility’s budget billing program.

The current purchasing plan expires Dec. 31. The 17.029-cent rate runs through March 31, and the next scheduled reset of the default rate is April 1, 2027.