Many Rhode Islanders perplexed by the glossy mailings from energy provider North American Power last month, or the company’s television ads, never thought about buying electricity from anyone other than a utility.
In 1996, Rhode Island became the first state to “deregulate” its electricity market, allowing customers to buy electricity from independent providers.
The practice of shopping for power among nonutility providers is well-known to large businesses, but has struggled to take hold in the residential market.
Now companies, including Connecticut-based North American Power and North Kingstown-based First Point Power LLC, are making a push to tap that market.
As of October 2013, the most recent month of data available, 19,800, or 4.1 percent, of the 485,000 homes and businesses served by utility National Grid buy their power from an independent provider. And 10,700 of those buying independently are commercial or industrial users.
But the number of business and residential customers buying independently, while small, has risen slowly and steadily since Rhode Island deregulated power purchase in 1996.
In October 2004, there were 2,900 “competitive supply” customers, a total that rose to 9,800 in 2010 and 17,000 in 2012, all with relatively minimal marketing. And measured by the amount of power sold, instead of number of customers, independent providers now sell a little more than half as much as National Grid.
“Larger users have been doing this for years,” said National Grid spokesman David Graves. “But this is the first time in my memory the option of buying from an alternative marketer has been the subject of a direct mail effort.”
Perhaps more customers in Rhode Island and across the country haven’t been tempted by independent power suppliers because of the complexity of the arrangement.
If they aren’t buying electricity from an independent supplier, almost all power customers buy it from National Grid through what is called the “standard offer.”