Santa made an appearance at the Rhode Island Public Utilities Commission hearing on National Grid’s request to increase electric bills by nearly 24 percent starting next month.
But he wasn’t too jolly, nor was he carrying gifts. For that matter, he didn’t have a bag of coal, either.
His message was simple – he’s sick of getting gifts at this time of year in the form of electric rate increases.
“It’s their Christmas gift to us,” he said.
Paul McNeil’s performance injected a bit of levity into a situation that, for the moment, appears to have no solution. National Grid is the supplier, not the producer, of electricity. The company contracted in September to buy electricity to meet its standard rate offer for the winter. According to documents filed with the PUC, National Grid procured the power at the lowest possible bid.
The issue is that that rate will boost the current 8.5 cents per kilowatt-hour to about 12 cents, an increase of about 50 percent. Because the standard rate offer is just a portion of the bill, the actual increase works out to about 24 percent for residential customers. It is even higher for commercial customers.
The PUC heard numerous pleas that it deny the increase. Testimony was given that low-income families and elderly could not afford the increase and that businesses, such as assisted living facilities that depend heavily on electricity, would be faced with expenses which hadn’t been budgeted. People wouldn’t be getting raises. There would be layoffs. The state’s economy would be sent into a tailspin.
There were cries from those filling the hearing room to “just say no,” and assertions that National Grid – which Robert Marlin of the Sierra Club projected would make $2.5 billion in profits – can well absorb the added cost. Marlin said an investigation is needed, and, he added, “Gas and more fossil fuels [for power generation] are not the answer.”
But natural gas, which is one of the cheaper forms of fuels and also one of the cleanest, is the issue.
As David Graves of National Grid explained earlier this week, pipeline supplying natural gas to the region are not large enough to meet the winter demands for residential and commercial heating that take priority, as well as supply electric generating plants. This forces these companies to convert to oil or coal to fire their plants, which pushes up the price of electricity. In addition, some gas-fired plants are required to shut down, which constricts supply and forces up prices.
Steven Pitassi addressed the problem.
“Let’s hope something can get done in a couple of years and it doesn’t take a decade,” he told the commission. “We should look into the pipeline, cut the red tape and get it done.”
Douglas Gablinske, executive director of The Energy Council based in Bristol, summarized the problem by saying the region has moved further and further away from oil and coal to generate electricity and grown more reliant on natural gas. The latter now accounts for about 40 percent of the fuel used to generate power in New England.
“But pipe distribution/transmission constraint is severely limiting its availability in Rhode Island, thus this imbalance in supply and demand is the root of the problem and commodity pricing is the symptom, not the problem,” he said.
Gablinske, as well as several other speakers, opposed Attorney General Peter Kilmartin’s suggestion that the PUC “spread out” the increase over a year, rather than six months. Gablinske argued spreading out the increased costs “will divert the efforts of our elected officials to solve the problem.”
Catherine Orioff of Providence, who gave the commission a list of what they should demand of National Grid, said spreading out the increase is something one would expect from a “PayDay loan outfit, but not from a body that is supposed to work for the best interests of consumers.”
Dan Allegretti, vice president of Exelon, said spreading out the increase would push up the price of future power purchases, as it would add an element of risk on top of market risks for default suppliers.
“This is a negative message for business opportunity,” he said.
Gablinski also called on the PUC to announce proposed rate increases earlier than five weeks before they are to take effect.
In comments prior to the hearing, Lt. Governor-elect Daniel McKee said, “We’re asking the wrong question. It’s not how can we do it, but how we can do it better?”
McKee filed as an intervener in the rate increase request and was accompanied by John Farley, formerly of the Energy Council of Rhode Island and now a resident of Florida. Farley said the PUC should look at the supply to National Grid and seek to remove the volatility of prices from the equation.
Billing himself as the advocate for the small business, and being the owner of a small business, McKee pointed out Pascoag Electric, a small supplier in Rhode Island, is asking for a 1- to 2-percent rate increase.
“Obviously Pascoag did it right,” he said. “Let’s find people who care.”
Steve Boyle, president of the Cranston Chamber of Commerce, said small businesses are at a “tipping point” and that an increase in their costs would result in layoffs.
Rep. James McLaughlin (D-Dist. 57), who represents Cumberland and Central Falls, said many of his constituents couldn’t afford the higher cost of electricity.
“Reject this ridiculous increase,” he said.
McLaughlin said approval of the increase would take $75 million out of the state’s economy.
Providence resident Deleimy Castillo made a similar plea. She spoke about her family and her dreams for her family. She also offered some advice to the commission.
“Making the right choice always has good consequences,” she said.
The commission only heard testimony Tuesday. It is scheduled to meet Dec. 23 to make a decision.
Comments
No comments on this item Please log in to comment by clicking here