(The Center Square) – Rhode Island’s model of assessing electric fees based on renewable sources and under the guidelines of a regional initiative taxing carbon emitters has led to one of the highest rates in the U.S., according to a recent study.
The American Legislative Exchange Council, an Arlington, Va.-based free market think tank, recently released the second edition of its Energy Affordability Report. The 20-page document takes a state-by-state analysis of electricity prices and energy policies and how they trickle down to consumers.
With a rate of 18.49 cents per kilowatt hour, Rhode Island ranked the fourth most expensive state in the country for electricity in the study, trailing Hawaii (28.72 cents), Alaska (20.22 cents) and Connecticut (18.66 cents).
Joe Trotter is ALEC’s energy, environment and agriculture task force director. He authored the affordability report.
Rhode Island is part of a cluster of New England states, Trotter said, that subscribes to the Regional Greenhouse Gas Initiative, which taxes producers emitting carbon. The states also use a renewable portfolio standard as a regulatory mandate to increase the energy of production from such sources as wind, solar and biomass.
“Additionally, (the states) impose state-mandated net metering policies on their utilities, which is where utility companies pay consumers who generate electricity from rooftop solar panels for any excess electricity these panels push back onto the electric grid,” Trotter wrote.
Trotter said ALEC’s new report was based on a number of pieces of criteria, including 2020 data from the U.S. Energy Information Administration.
“This included residential, commercial, industrial and transportation sectors,” Trotter said. “The weighted average price of electricity across all sectors was calculated, and then the states were ranked from lowest to highest average electricity price.”
The cost of electricity within Rhode Island has been a talking point within state government in recent months as customers brace for utility costs this upcoming winter.
The state’s Public Utilities Commission has announced the allocation of funds to credit and reduce constituents’ utility bills.
“In August, I announced with the Office of Energy Resources that $3.8 million in Regional Greenhouse Gas Initiative funds would be used to provide direct rate relief to approximately 39,000 of our most vulnerable constituents,” Gov. Dan McKee said in a news release.
McKee said he is exploring additional opportunities to reduce electricity costs, including the introduction of legislation in the upcoming session “to suspend the state’s 4 percent gross receipt tax on constituents’ electricity bills through the April 2023 utility billing period.”
In the ALEC report, Trotter said the ranking of Alaska and Hawaii were obvious placeholders for the top two spots.
“Given their isolated geographic locations, it is unsurprising that Alaska and Hawaii have the highest electricity prices,” Trotter wrote. “Contiguous states have the advantage of being better able to share infrastructure, such as transmission lines, and have the capability to import or export electricity across state lines.”
The five states with the lowest electricity rates on ALEC’s new report were Wyoming (8.10 cents per kilowatt hour), Washington (8.04 cents), Idaho (7.89 cents), Oklahoma (7.86 cents) and, at No. 50, Louisiana (7.71 cents).