Declaring An Energy Affordability Emergency and Providing Ratepayer Relief to Mitigate Winter Price Spike

High Rates and Rising Costs Are Driving Rhode Island’s Energy Affordability Crisis

WHEREAS, Rhode Island has among the highest electricity costs in the nation, with the U.S. Energy Information Administration ranking Rhode Island as having the fourth-highest average retail electricity price in the United States, more than 85 percent above the national average; any further increase in winter residential rates would therefore place added pressure on households already facing exceptionally high energy costs; and

WHEREAS, residential electricity rates have increased by more than 25 percent in just three years, more than three times the rate of inflation, placing mounting financial pressure on households already confronting elevated costs for essential goods and services; and

WHEREAS, the number of residential electric accounts in arrears for ninety or more days has increased by over 40 percent since May 2023, and the average balance owed by these deeply delinquent households has nearly doubled over the same period, such that any further increase in the cost of electricity would drive additional already-strained families into severe arrearage, force impossible tradeoffs between paying for power and affording food, medicine, and other necessities, and deepen the financial distress of households least able to absorb higher bills; and

WHEREAS, current hardship indicators show that energy affordability strain in Rhode Island is already acute and widespread, with United Way of Rhode Island reporting a nearly 20 percent increase in cold-weather utility assistance requests from 2024 to 2025, and the 2025 Rhode Island Life Index finding that more than nine in ten respondents view difficulty paying utility bills as descriptive of their community; and

WHEREAS, demand for utility-bill assistance has surged, with the United Way of Rhode Island’s 2-1-1 line receiving more than 5,700 energy-related calls in May and June 2026, nearly five times the 1,184 such calls received during the same two months of 2025; and

WHEREAS, according to the United States Census Bureau’s Household Pulse Survey, more than a third of Rhode Island adults reported reducing or skipping basic household necessities, such as food or medicine, in order to pay an energy bill within the preceding twelve months, the highest rate among the six New England states; and

WHEREAS, Rhode Island households have less capacity to absorb rising utility costs than many neighboring households, with median household income below that of Connecticut, Massachusetts, and New Hampshire; a winter residential rate increase would therefore fall hardest in Rhode Island on households already most at risk of arrearage or reliance on public and charitable assistance; and

WHEREAS, Rhode Island families have endured the most severe national inflation in four decades, and just as that historic surge began to ease, the military conflict with Iran conducted by the Trump administration has driven regional energy prices up more than 18 percent and prices at the pump up nearly 34 percent over the past year, reigniting inflation across the region and prolonging the erosion of household purchasing power with no period of relief before winter; and

WHEREAS, federal tariff actions have raised the average effective tariff rate on imported goods to its highest level in more than eight decades, increasing the prices of everyday goods that Rhode Island families purchase, including clothing, food, vehicles, appliances, and household materials, with independent economic analyses estimating that these measures reduce the purchasing power of the average American household by as much as one thousand dollars or more per year and impose the heaviest relative burden on low and moderate income households, leaving families even less able to absorb a utility rate increase without falling into debt or sacrificing other essential needs; and

WHEREAS, the ongoing impacts of H.R. 1 are further straining Rhode Island families and households, with the loss of enhanced Affordable Care Act tax credits and new federal restrictions on Medicaid and SNAP threatening health coverage and food assistance for tens of thousands of Rhode Islanders; and

The Conflict in Iran and Other Disruptions Will Cause a Surge in Already High Winter Rates

WHEREAS, the escalation of armed conflict involving Iran in 2026 has materially disrupted global energy markets, including the markets for crude petroleum and liquefied natural gas (LNG), and these disruptions are transmitted into the New England region with particular force because the region’s energy supply is subject to constrained natural gas pipeline capacity and limited delivery infrastructure that restrict the region’s ability to source additional supply during periods of peak winter demand; and

WHEREAS, New England’s winter electricity prices are often driven by the region’s reliance on imported LNG during periods of peak demand, therefore disruptions in international fuel markets are transmitted directly into the wholesale and retail electricity and heating costs borne by Rhode Island households; and

WHEREAS, effective March 1, 2025, ISO New England implemented a new Day-Ahead Ancillary Services market design that was projected to add $140 million in incremental costs, but that the ISO’s Internal Market Monitor has since estimated at $974 million in its first year of operation, nearly seven times the projected amount; these costs are allocated regionally and recovered from Rhode Island customers through the supply portion of their electric bills; and

WHEREAS, as a result of these disruptions, the Last Resort Service rate charged to Rhode Island Energy’s residential electricity customers is set to increase by approximately 15 percent relative to the prior winter period, with double-digit increases also expected from all other suppliers, causing the supply portion of residential electric bills to spike during the winter heating season and placing additional financial strain on Rhode Island households; and

The Spike in Energy Prices Will Harm Thousands of Rhode Island Households 

WHEREAS, rapidly increasing electricity costs have created a point of crisis for many Rhode Islanders, requiring bold executive action to mitigate immediate impacts on ratepayers and pursue lasting reforms that address the underlying causes of rising energy costs; and

WHEREAS, persistent inflation and rising costs for housing, food, health care, prescription medications, and other essential goods have significantly strained household finances; additional increases in electricity costs will likely force more Rhode Island families to choose between paying their utility bills and meeting other essential needs; and

WHEREAS, an unaffordable winter rate increase inflicts harm even where service continues uninterrupted, as households ration heat to unsafe levels, sacrifice food and medicine to keep the lights on, and accumulate arrearage debt compounded by penalties and interest that they cannot repay, endangering the health and financial security of families across the state; and

WHEREAS, existing low-income rate relief is insufficient to meet the needs of Rhode Islanders as middle-income household earnings fail to keep pace with inflation and the rising cost of essential goods and services; and

WHEREAS, absent State action, these disruptions threaten Rhode Island residents with abnormal increases in winter electricity and heating costs that endanger the health, safety, welfare, and resources of the people of this State, particularly during the months of peak heating demand; and

Regional Greenhouse Gas Initiative Funds Are Available for Rate Relief

WHEREAS, in January 2026, the Governor of New Jersey declared a state of emergency arising from electricity affordability conditions and directed state agencies to deploy available resources, including proceeds associated with Regional Greenhouse Gas Initiative (RGGI), toward relief for ratepayers facing elevated energy costs; and

WHEREAS, multiple states participating in RGGI, including New Hampshire, Maryland, New Jersey, Virginia, and Delaware, have in recent years directed auction proceeds, or state energy funds supported in part by such proceeds, to direct relief for ratepayers facing elevated energy costs; and

WHEREAS, ISO New England’s 2025 Annual Markets Report found that RGGI and Massachusetts carbon allowance charges increased regional energy market costs from approximately $690 million in 2023 to approximately $1.1 billion in 2025, accounting for roughly 12 percent of total energy market costs; because New England clears power at a single regional price, those charges are reflected in the wholesale electricity prices paid by Rhode Island ratepayers; and

WHEREAS, Rhode Island law expressly contemplates the use of RGGI auction proceeds to reduce costs for ratepayers; and

WHEREAS, Rhode Island General Laws § 30-15-9(e)(1) authorizes the Governor to suspend the provisions of any regulatory statute prescribing the procedures for the conduct of state business, or the orders, rules, or regulations of any state agency, if strict compliance with the provisions of any statute, order, rule, or regulation would prevent, hinder, or delay necessary action in coping with the emergency; and

WHEREAS, pursuant to § 30-15-9(e)(2), the Governor is authorized to use all available resources of state government to cope with the emergency.

NOW THEREFORE, I, DANIEL J. MCKEE, by virtue of the authority vested in me as Governor of the State of Rhode Island, pursuant to Article IX of the Rhode Island Constitution and the Rhode Island General Laws, including, but not limited to, Title 30, Chapter 15, do hereby order and direct the following:

1. A state of emergency is declared for the State of Rhode Island due to the impending double digit increase in the winter supply rate charged to residential electricity customers, which is resulting from energy market disruptions, including the 2026 conflict involving Iran and the unanticipated regional costs associated with the implementation of the Day-Ahead Ancillary Services market.  This rate increase is occurring at a time of exceptionally high existing electricity costs, mounting household financial hardship, and persistent increases in the cost of essential goods and services.
    
2. The Office of Energy Resources (OER) shall allocate and disburse twenty-eight million dollars ($28,000,000) from available RGGI auction reserves to provide cost-effective direct rate relief to all Rhode Island residential consumers, as contemplated by §§ 23-82-6(a)(3)-(4), for the purpose of mitigating abnormal winter energy cost increases attributable to the disruptions described herein.
    
   
   1. OER shall file a petition with the Public Utilities Commission to apply these funds as direct rate relief for all residential electric customers such that the full twenty-eight million dollars ($28,000,000) is applied as a uniform credit to residential electric accounts during the winter heating season. The credit shall be structured to mitigate the winter price spike, maximize the number of Rhode Island residents receiving relief, and remain consistent with the statutory objective of providing cost-effective direct rate relief.
   2. In implementing this rate relief, OER shall avoid materially disrupting or impairing ongoing projects and programs currently funded through RGGI.
   3. To effectuate the relief required by this Executive Order, the requirements of § 23-82-6 are hereby suspended, but only to the extent necessary to implement the across-the-board rate relief directed by this Executive Order. All other RGGI proceeds shall continue to be allocated in accordance with § 23-82-6.

This Executive Order shall take effect immediately.

So Ordered:

Daniel J. McKee
Governor