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RI PUC Waives Fee for Swapping Power Suppliers

July 8, 2015 By Cheryl Kaften

The Rhode Island Public Utilities Commission (PUC) voted to waive an electricity “billing adjustment” that had riled up ratepayers. The three-member PUC unanimously found that customers should not be assessed for switching from National Grid, the state’s dominant utility, to any retail competitor that offered lower rates.

The individual ratepayer charge was eliminated, effective immediately, according to the Providence Journal. Instead, the money owed to National Grid will be invoiced equally among nearly all electricity users in the state. Although the commissioners admitted that the charge was allowed under state law and that National Grid did nothing wrong in trying to recover money that it was owed, they also called it antithetical to the years-long — and largely unsuccessful — effort to create a free and vibrant electric market in Rhode Island.

“I think it causes undue confusion to consumers,” Commissioner Paul Roberti said of the charge.

National Grid had defended the invoice charge, noting that the utility pays up-front for the electricity it buys — and spreads that cost out over the course of each customer’s annual billing period.

The state Division of Public Utilities and Carriers — the commission’s sister agency — had pushed for elimination of the charge, as had the offices of Rhode Island Lt. Gov. Daniel McKee and Attorney General Peter Kilmartin.

National Grid also finally had relented and advocated for slashing the charge because of the customer dissatisfaction it was causing. “We’re ready to comply with the commission’s order,” National Grid Spokesman David Graves told reporters outside the Rhode Island PUC’s offices in Warwick after the vote. “All we want to do is recover the costs, and this provides the mechanism through which to do that.”

In a formal statement released by his office after the vote, McKee said, “I applaud the PUC for voting to end the billing adjustment, which has been a barrier to the type of competitive electricity market that could bring small businesses and residential customers real relief in their energy bills.”

The billing adjustment charge, which was put in place in 2010, was designed to compensate National Grid for the difference in the fixed rate it charges consumers for electricity in each six-month billing cycle and the underlying variable rates it pays to power generators from month to month. National Grid averages its retail rates to create a measure of price stability for its customers. The adjustment charge could add up to hundreds and sometimes thousands of dollars, and though it only repays the utility for money it has already spent, it can be a heavy — and in most cases unexpected — burden on ratepayers.

“I intervened in this case on behalf of small businesses,” the Lieutenant Governor said, “which face some of the highest energy costs in the nation. The Division of Public Utilities and Carriers, along with our office and the office of the Attorney General, received hundreds of complaints about the adjustment, and all of the parties in the case, including National Grid, favored eliminating it.”

Although the charge had been in effect for five years, the Providence Journal reported that it became an issue of widespread public concern only this past winter, when National Grid’s electric rates in Rhode Island spiked — as did those in other New England states — due to projected increases in the wholesale cost of power in the region. Many more residential and small-business customers than usual switched to alternative suppliers and retroactively received bills in the mail charging them for the shortfall in National Grid’s revenues.

Customers who already paid National Grid will not be issued a refund, according to the PUC.

2 comments on “RI PUC Waives Fee for Swapping Power Suppliers

  1. Very nice job of explaining the RI PUC’s actions and recognizing that National Grid was following regulations by collecting the Billing Adjust Charge. Your headline referred to the charge as a fee we charged customers who switched to an alternate energy supplier. It was cost recovery from which we did not profit, not a fee.
    David D. Graves
    Principal Media Relations Rep.
    National Grid

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