In keeping with a national trend, Rhode Island’s gas prices have fallen from $3.38 per gallon to $2.16 per gallon over the past year, according to the federal Energy Information Administration. But the University has not seen a significant drop in its overall energy budget, said Stephen Maiorisi, vice president for facilities management.
The Department of Facilities Management spent $90,000 on vehicle fuel in 2014 and expects to reduce this cost by $35,000 this year, Maiorisi said. But these savings would be insignificant within the department’s total budget of more than $60 million, he added.
The University purchases fuel from many vendors, signing contracts that set a standard price for several months, regardless of market fluctuations, Maiorisi said. “We expect that vendor pricing will go down, but it is too short of a period of time over the last several months to see immediate change in pricing,” he said.
But for everyday consumers, the drop in gasoline prices has allowed for more frequent driving, said Bob Ramaldi, an employee at East Providence Auto Sales.
“You can afford to travel. If you want to go to Newport, you can go to Newport. If you want to go to Narragansett, you can go to Narragansett. The low gas prices make it affordable to travel and spend money in businesses,” Ramaldi said, though he added that he has not noticed any change in car sales since gas prices began to drop.
“It feels like a big tax cut,” said Larry Chretien, executive director of the nonprofit heating oil supplier People’s Power and Light.
“It’s actually even better than a tax cut because it doesn’t hurt our budget,” he added. “It’s not like we have to cut spending in order to have more money in our pocket.”
Heating oil and natural gas prices have also fallen, with residential heating oil dropping to $2.73 from more than $4 per gallon in early 2014, according to the EIA.
“We are spending around $40,000 a year now compared to $250,000 a year on heating oil because of fuel switching and energy efficiency efforts,” said Christopher Powell, assistant vice president of sustainable energy and environmental initiatives for Facilities Management. The University is increasingly using natural gas as a less expensive fuel alternative, he added.
About 33 percent of Ocean State residents use oil to heat their homes, while most other households use natural gas, according to the EIA. As prices for both types of fuel have gone down, consumers may spend around $1,000 less this year to heat their homes, Chretien said. But he noted that people may be less likely to change their home heating habits than their gas consumption in response to fluctuating fuel prices.
In contrast, electricity prices have been rising, with National Grid raising rates by about 24 percent, according to the company’s website. But the University will not see higher electricity costs this year.
“We’re still insulated from the rising prices for another year because of a long-term hedge,” Powell said, adding that he expects to see a 6 to 7 percent increase in electricity prices starting next year, which would be far less dramatic an increase than that faced by Rhode Island residents.
Amidst rising fuel prices, some state residents and the University are looking to more energy-efficient practices.
“We have to face the fact that we’re at the end of the transmission line,” Chretien said. “Most of our energy in New England is from out of state, and Rhode Island can do better by trying to use resources within the state such as investing in energy efficiency.”
The University has also invested millions of dollars to become more energy efficient, Powell said. “The biggest hedge we have is using less energy and doing everything we can do for efficiency.”