By JIM BARON

PROVIDENCE — Your gas bill is going up. And your electric bill is going up even higher.

The Public Utilities Commission gave its blessing Thursday to dual rate hikes requested by two arms of the international energy conglomerate National Grid — one of which dominates the electricity market in Rhode Island, the other has near complete control of natural gas distribution in the state.
The electricity rate hike, 21.6 percent, will increase the bill of a typical customer using 500 kilowatt-hours of electricity from $76.77 a month to $93.44 a month, according to spokesman Thomas Kogut. The 10 percent rise in natural gas rates will add about $10 a month to the average customer's bill, Kogut added.
Both increases take effect on Tuesday. The electricity rate will stand through the end of December, the natural gas hike must be renewed Nov. 1.
Commissioners said the vote was an official act to formalize a foregone conclusion. They say they had little choice but to approve rate increases to compensate National Grid for the gas and electricity it buys to distribute to homes and businesses in Rhode Island. National Grid's Rhode Island companies do not generate any electricity or drill for natural gas, it purchases those two commodities and distributes it to customers.
Rate hikes to adjust for the price of electricity and gas, such as those the PUC approved Thursday, do not affect National Grid's bottom line one way or the other, commissioners noted, they are a “pass-through” expense.
“Needless to say, this is an extraordinarily difficult decision for the commission to make,” PUC Chairman Elia Germani told an audience made up mostly of reporters and poverty advocates who showed up to hear the three-member panel's decision. “To be asked to increase natural gas rates and electricity rates at the same time is a double whammy for our customers.” He noted that the price of heating oil, which the PUC does not regulate, has risen 80 percent or more per year.
“The PUC is required by law to pass on...to customers,” the increased prices for natural gas and electricity, Germani explained.
“There is no solution that will not be very painful to our customers,” the chairman said.
“It's unfortunate, it's unpleasant, it's distasteful, no one likes it, we feel bad about it, but it is reality and it is a spin-off of what has been happening in the energy markets internationally,” Commissioner Robert Holbrook added. “The world has gone wild as far as the cost of energy is concerned.”
Recalling the series of public hearings held throughout the state, where ratepayers, especially those in the lower income range, came to urge the commissioners against approving the increase, Commissioner Mary Bray said, “if anyone thinks their voices weren't heard, that's not true. They certainly were.
“I was fortunate enough to be at every one of those public hearings,” Bray said, “and, believe me, there wasn't one, when I left, that I wasn't heartsick over the stories that we heard.”
Henry Shelton of Pawtucket's George Wiley Center didn't buy the proposition that the PUC commissioner had little choice but to approve the increase.
“There was much they could do,” Shelton told The Times. “They didn't have to give them 100 percent (of the requested increases).
Shelton noted that during a public hearing in Pawtucket, City Councilor Thomas Hodge (Commissioner Bray is chairwoman of the Pawtucket City Council) said he resents the notion that National Grid should be able to pass on 100 percent of the cost of fuel. When fuel prices go up, Shelton quoted Hodge, other businesses have to eat some of the increase, a dollar-for-dollar hike is not automatic.
“The company should not expect and get from the commission 100 percent of their fuel costs, because everyone is suffering from fuel costs,” Shelton said. “Some of that should be modified and it should be a lower amount.”
But in both cases, commissioners warned, the increases are a matter of, in Holbrook's words, “pay me now or pay me later.”
Holbrook noted that if the current electricity rate of 9.2 cents per kilowatt hour remained in place through the end of this year, National Grid would have an “under collection” of its costs for electricity of $104 million. If the rate stayed at that level through 2009, the under collection would be $515.6 million. At the increased rate of 12.4 per kilowatt hour, he said, there will be a “slight overcollection” of just over $2 million.
Then a truly whopping increase would be necessitated to bring the utility current.
Germani told reporters after the meeting that the gas increase was approved until November and the electricity rate through December in the hope that the world energy market may level off and there could be a respite in price increases. But, he added, looking at the futures market and other factors, he expects there will be yet another increase in both rates when these expire.
Meanwhile, Germani wants to commission an audit by one of the large accounting firms to ensure that the numbers being provided by National Grid in support of their rate hike requests are accurate.
He said he hopes to have the report from that audit “before we have to approve another increase.”
The PUC would pick the accounting firm, Germani said, and PUC staffers would work with it, but the bill will be paid by National Grid.
“I think that's the least we can do when we are approving a rate increase of this magnitude,” he said.