Funding for Rhode Island’s energy-efficiency programs could be cut by more than $42 million next year in an effort to rein in residents’ soaring power bills. That rollback would deprive the state of more than $90 million in benefits and potentially eliminate hundreds of jobs while creating only modest up-front savings, a new analysis finds.

Rhode Island Energy, the utility that administers the state’s energy-efficiency offerings, has proposed to slash spending on that front by 18% compared to last year and more than 30% compared to the budget originally projected in the nonbinding three-year plan introduced in 2023. If approved, the cuts will save the average household $1.87 per month, according to Rhode Island Energy.

The result of these changes, according to climate action nonprofit Acadia Center, would be more expensive electricity and more exposure to volatile natural gas prices in the long run.

“Energy efficiency is a tool for suppressing supply costs, for suppressing infrastructure costs in the long-term,” said Emily Koo, Acadia Center’s program director for Rhode Island and one of the authors of the group’s analysis. ​“I am not seeing our leaders think beyond the immediate.”

Rhode Island has traditionally been a leader in energy-efficiency programming. Over the past 15 years, the state has repeatedly placed among the top 10 states in the American Council for an Energy-Efficient Economy’s annual energy-efficiency scorecard. Since 2009, the state has spent more than $2 billion on efficiency incentives and services, yielding more than $6 billion in environmental and social benefits.

Now, however, the dynamics of energy markets are creating new obstacles. Nationwide, electricity costs have gone up at twice the rate of inflation over the past year, and gas prices have increased by more than four times the inflation rate. Rhode Island, like other New England states, has the added difficulty of already having some of the highest electricity rates in the country. Add in cold Northeastern winters, and the state is girding for an expensive season ahead.

As in neighboring states, regulators, elected officials, and utilities in Rhode Island are scrambling for ways to provide some relief for residents and businesses. These efforts have increasingly looked to the bill fees that fund renewable energy incentives and energy-efficiency programs as possible targets for quick, if small, bill reductions. In Maine, for example, leaders from both sides of the aisle have sought to lower incentives for customers and community solar developments that send power back to the grid, and in Massachusetts, utility regulators ordered energy-efficiency administrators to cut $500 million from a planned $5 billion three-year budget.

Now, Rhode Island Energy is proposing rollbacks of its own, saying that its latest plan prioritizes customer affordability. The company has the support of the Rhode Island Division of Public Utilities and Carriers, which points to the growth in accounts with overdue utility bills to bolster its argument that the changes will provide needed relief to consumers.

“There is simply a financial limit as to how much cost the ratepayers can bear,” the department wrote in its public comments on the proposal.

Advocates, however, say the approach is short-sighted.

“This is weaker. It’s a retreat,” said Larry Chretien, executive director of the nonprofit Green Energy Consumers Alliance, which opposes the proposed cuts. ​“It just feeds into the narrative — that we don’t accept — that ratepayers aren’t seeing benefits from energy efficiency.”

Rhode Island’s energy-efficiency offerings include home energy assessments, weatherization services, rebates on energy-saving appliances and heating and cooling systems, and contractor training. Residents and businesses that take advantage of these programs generally save money by reducing their energy use.

The programs also create savings for the average consumer, whether or not they participate. Because the improvements slow energy consumption, they allow utilities to build less pricey infrastructure, the cost of which is passed on to customers. Efficiency measures can also lower peak demand, reducing the need to buy costlier, dirtier power from peaker plants. In Rhode Island, efficiency programs lowered electricity use 5% between 2005 and 2024; without these interventions, use would have increased 15%, according to an annual state report.

Advocates, therefore, argue that Rhode Island Energy’s plan to shrink energy-efficiency spending won’t actually result in more affordable power in the long run.

“You spend money on energy efficiency or you’re going to spend even more money on power supply,” said Forest Bradley-Wright, state and utility director for the American Council for an Energy-Efficient Economy.

Acadia Center’s analysis also finds that more than 800 jobs in the energy-efficiency sector could be at risk if the cuts are adopted.

The draft plan has been through multiple iterations; the most recent version was released on Sept. 5. The state energy-efficiency council is expected to vote on the proposal at its Sept. 25 meeting. The plan will then go to utility regulators for final approval.

Advocates say they intend to keep pushing for high funding levels until the process concludes. 

“The benefits we’re experiencing today are already translating into lower bills,” Bradley-Wright said. ​“There’s a track record of success, but let’s not take it for granted.”