Attorney General Neronha insists Rhode Island Energy pay consumers what they are owed

Attorney General Neronha insists Rhode Island Energy pay consumers what they are owed

Published on Friday, October 24, 2025

Attorney General Peter F. Neronha today announced the filing of his position paper and supporting expert testimony with the Public Utilities Commission (PUC) arguing that Rhode Island Energy's proposed bill credits severely undervalue the amount owed to Rhode Island ratepayers.

In 2022, the Division of Public Utilities and Carriers (DPUC) approved the sale of The Narragansett Electric Company to Rhode Island Energy based on the Company's commitment to hold ratepayers harmless from any increased costs attributable to the sale. The Attorney General's expert estimates that Rhode Island ratepayers could lose up to $39 million if an appropriate discount rate is not used to determine the present value of Rhode Island Energy's commitment.

"If Rhode Island Energy wants to front load some of the hundreds of millions of dollars secured for Rhode Island ratepayers at the time of the sale, that's fine by me, but they better be coughing up every last penny that they owe," said Attorney General Neronha. "Immediate relief for skyrocketing and unstable energy costs is desperately needed. However, the discount rate that Rhode Island Energy used to calculate how much they owe ratepayers shortchanges Rhode Islanders by tens of millions. Rhode Island Energy needs to keep up their end of the bargain and provide the full value they owe to ratepayers, many of whom are struggling to make ends meet. Look past the smoke and mirrors and what you'll see is a company placing profits over people, and we want Rhode Islanders to get the full relief they deserve."

On February 23, 2022, the Division of Public Utilities and Carriers (DPUC) approved the sale of Narragansett Electric from National Grid to Rhode Island Energy. The approval was conditioned on several commitments made by the Company, including the Hold Harmless Commitment, which states that "PPL will hold harmless Rhode Island customers from any changes to Accumulated Deferred Income Taxes ("ADIT") as a result of the Transaction." In other words, the Commitment is meant to protect ratepayers from increased expenses that would happen only because of the sale.

Recently, Rhode Island Energy sought to change the method of satisfying the Hold Harmless Commitment through a proposal for miscellaneous bill credits to be issued in the winters of 2026 and 2027. Rhode Island Energy determined the amount of money that would be owed to ratepayers under the Hold Harmless Commitment through 2062 (the last year impacted by the changes in ADIT) to be approximately $241 million. Rhode Island Energy then discounted that nominal total to determine a present value that could be used to compensate customers today, considering the time value of money. They used the company's Weighted Average Cost of Capital (WACC) as a discount rate and concluded the present value of the Hold Harmless Commitment to be approximately $148.7 million.

Attorney General Neronha argues, as supported by expert testimony, that the discount rate used by Rhode Island Energy significantly understates the value owed to ratepayers by $37-$39 million dollars. When Rhode Island Energy uses its WACC as a discount rate, they overlook the obvious fact that Rhode Island Energy's customersare differently positioned than the companyin terms of their ability to invest the money coming into their pockets today, instead of in the future. The Attorney General contends that using more reasonable discount rates, including the Customer Deposit Rate or the 10-year Constant Maturity U.S. Treasury rate, would result in tens of millions of dollars in value that Rhode Island ratepayers are rightfully owed by the Company.

For more information and to review the filings, please visit our website.

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