It’s long past time for utility reform. Sen. Victoria Gu and Rep. Megan Cotter are introducing bills to reign in utility companies’ profit margins—because right now, many Rhode Islanders are paying more than they should.

Here’s the core issue in simple terms:

• Utilities earn profits based on how much they spend on infrastructure, not how efficiently they operate (they could double the cost of a project and that would double their profits)

• The current allowed return (9.275%) is much higher than what would be reasonable under Supreme Court precedent (see this Economic Liberties Report), but the utility justifies it by saying this is the profit margin that other states’ utilities are getting

• Higher infrastructure spending = higher profits for utilities.

  Those extra costs are passed directly to you, the ratepayer

To fix this, Rep. Cotter and Sen. Gu are proposing two possible solutions. We need one of them to pass in order to reign in excess profits:

• H-7887 / S-2202 Require regulators (the RI PUC) to set profit rates that match the actual cost of capital (what the utility needs to raise money)—the utility must refund customers if the utility makes more profit than that

• H-7888 / S-2777 Cap utility profits at 4% annually

At the end of the day, utilities are essential services. Our goal is simple: make sure they serve the public, not just their investors, and ensure families and seniors aren’t forced to choose between heating their homes and affording basic necessities.

We’re having the bill hearings in the next couple weeks, and the utility lobby is coming out forcefully against these bills, of course, so we need your testimony! Write to your legislators and the Senate Commerce committee through this form: