Rhode Island Lt. Governor looks to increase electric rate competition

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Rhode Island Lt. Governor Daniel McKee seeks to provide consumers with more options, when it comes to heating, powering, and cooling their homes and business. The Lt. Governor also expressed interest in the development of a “shopping website,” that could allow consumers to compare and shop for offers from competitive energy suppliers.

The Warwick Beacon
Contact: John Howell

Lt. Gov. Daniel McKee, who says the recent increase in electric rates will cost Rhode Island residents and businesses a whopping additional $105 million, told a group of realtors and energy brokers Tuesday evening that there needs to be more competition in the energy business.

McKee also said he intends to be an intervener on behalf of the public and small business when any proposed utility rate increases come before the Public Utilities Commission (PUC). He mentioned natural gas and water in addition to electric. The PUC also regulates wastewater treatment rates of the Narragansett Bay Commission as well as motor carrier and intrastate ferry rates.

The former Cumberland mayor intervened even before taking the oath of office as lieutenant governor. McKee intervened when National Grid sought a 23 percent increase in electric rates in December. The PUC went along with the increase, but spread it over a year, rather than six months. Residential electric bills therefore increased 14.25 percent for the year.

But McKee pointed out that customers have options, and they don’t have to accept the standard offer that National Grid is required to provide. If customers don’t make contact to buy their electricity elsewhere, they automatically get the standard offer that jumped from 8 to 10.72 cents a kilowatt hour as of Jan. 1.

McKee noted that National Grid buys power months in advance to when it is used and that the company simply passes that cost along to the consumer.

“Grid isn’t making any money on that,” he said.

Yet, as McKee said he is doing personally, there are alternatives to the standard offer that are less costly.

“What can be done?” he asked of those gathered at the DeFelice Center on Post Road in Warwick. DeFelice operates real estate and energy brokerage companies from the center.

Thomas DeFelice, founder of DeFelice Energy and partner with Ross Weaver of Quest Energy, said it was McKee’s op-ed commentary in the Providence Journal underscoring the importance of small business to the state’s economy that prompted him to invite McKee to speak to the group.

McKee found a well-educated audience that knows first-hand how energy costs can impact decisions as to whether to locate in the state and what it means to businesses operating here.

“It’s a little misguided to beat up on National Grid,” said Maurice Cooney, director of sales for DeFelice Energy. “It’s the capacity of the pipeline.”

As National Grid outlined during the rate hearings, natural gas –which generates about 40 percent of the electricity in the region – is plentiful and cleaner burning than coal and oil. During the winter the demand for natural gas increases, but the pipelines delivering the product have a limited capacity. Preference is given to heating homes and businesses, meaning that gas-fired generating plants close or need to be converted to more costly oil. That pushes up the cost of electricity.

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