State Files to Put $28M in Climate Cash on Winter Electric Bills

Rhode Islanders have watched a parade of winter bill relief schemes over the past year — a $149 million utility credit plan that appeared and vanished, a $23.50 monthly credit patched together by regulators, low-income assistance stretched thin. Now the state is trying something different: paying households directly out of the money power plants pay for polluting.

On August 6, the Rhode Island Office of Energy Resources filed a tariff advice petition at the Public Utilities Commission — Docket 26-28-EL — seeking approval to direct $28 million in Regional Greenhouse Gas Initiative proceeds to residential electric customers as bill credits during the winter rate period. If regulators sign off, more than 450,000 households would share in the money. For the average ratepayer, roughly $61 in total credits would fully offset the coming rate increase during the three most expensive winter months, according to Governor Dan McKee's office.

Here is the mechanism, because the mechanism matters. RGGI is a cap-and-trade partnership among eleven states, Rhode Island included since 2007, that forces fossil fuel power plants over 25 megawatts to buy allowances for every ton of carbon dioxide they emit. Those allowances are sold at auction, and the states pocket the proceeds. Rhode Island has historically spent its share on energy efficiency, renewables, and rate relief for low-income customers — McKee has used more than $15 million in RGGI funds over past years to help low-income Rhode Islanders with their electric bills.

The new filing goes further. McKee signed an executive order on July 23 declaring an energy affordability emergency and expanding the allowable use of RGGI funds to cover all residential electric customers, not just low-income ones. The order came the same day Rhode Island Energy proposed a roughly 15% winter rate increase for the season starting October 1.

"Rhode Islanders have been pushed to the breaking point on energy costs," McKee said. "Too many residents are already choosing between paying the electric bill, buying groceries, or filling a prescription."

The distress signals back him up. United Way Rhode Island's 2-1-1 line received more than 5,700 energy-related calls during May and June — nearly five times the number from the same period last year. The 2025 Rhode Island Life Index found more than nine in ten Rhode Islanders say difficulty paying utility bills is a challenge facing their community.

This is also, in miniature, how the state has learned to work around its utility. Last November, Rhode Island Energy withdrew a $149 million bill credit plan tied to its parent company PPL's 2022 acquisition commitments, after the PUC raised questions and Attorney General Peter Neronha's office argued — with expert testimony — that the company's discount rate understated what ratepayers were owed by $37 to $39 million. Regulators then cobbled together alternative relief: a $23.50 fixed credit plus rate reductions averaging another $8.40, about $32 in savings on winter bills for January through March of this year. The RGGI proposal is a separate pot of money entirely, one the state controls, and PUC Chairman Ronald Gerwatowski has already said he is "very worried" about rates rising into winter 2027.

Some caveats, honestly stated. The PUC has not approved the filing, and no hearing or decision timeline has been made public. The exact distribution method — flat credit versus something usage-based — is not yet detailed. And $28 million spent on bill credits is $28 million not spent on efficiency programs that lower bills permanently; Rhode Island is following a national pattern here, with states directing 23 percent of RGGI investments to bill credits in 2024, up from 10 to 19 percent in prior years.

But the arithmetic for households is simple. About $61 back, on bills set to climb 15%, in the months when heat is not optional. Whether that check arrives now sits with three commissioners on Jefferson Boulevard — and winter rates take effect October 1.