The competitive landscape of the Rhode Island electricity market has matured substantially over the last 12 months as new alternative suppliers have started to offer service to residential customers. Though Rhode Island was one of the first states to approve and enact an electricity choice law, which went into effect in 1996, only recently have Rhode Island households had the ability to truly shop for competitive prices. While knowledge of electricity choice is spreading in the state, the majority of customers are still unaware of the ability to search for alternative options to National Grid.
National Grid, formerly Narragansett Electric, is the major regulated electricity utility of Rhode Island. As a regulated utility they are responsible for delivering power to all customers within their service area as well as maintaining the power lines and wires. National Grid receives revenue by charging regulated distribution charges. These charges usually make up 20-30% of the National Grid electric bill in Rhode Island, with the remaining portion being composed of electricity generation supply charges.
The generation supply charges are the portion of the electric bill that is open to competition. Consumers who do not search for alternative electricity offers pay a default rate through National Grid which is named the ‘Standard Offer Service’. Standard Offer Service rates are determined through an auction that National Grid holds for competitive suppliers. Electricity suppliers who are licensed by the state of Rhode Island can bid to service a portion of the Standard Offer Service customer pool. National Grid collects the money as they remain in charge of the electric billing process, and then transfers the money to the companies who have won the auctions.
Essentially every Rhode Island electricity customer is already paying money to an alternative supplier. By taking the time to shop customers have the power to potentially lower their electric bill or choose a plan that aligns with their needs or values. Alternative Rhode Island electricity companies can often offer more attractive pricing than the Standard Offer Service as they are more flexible to purchase power in the wholesale market at any given time. Whereas National Grid holds the Standard Offer Service auctions at specific dates for service periods that will take place in future months, competitive suppliers can make purchases in the wholesale market today for a service period that starts tomorrow.
In addition to purchase flexibility, alternative suppliers can also offer rate term contracts of various lengths as opposed to the one size fits all length of the Standard Offer Service. Since the Rhode Island Standard Offer Service changes every six months, customers are at the mercy of the broader wholesale energy markets which can result in large price fluctuations from one six period to the next. Rhode Island electricity choice has given consumers the ability to lock in their electricity price by selecting a long term fixed rate offer as long as three years offered by some alternative electricity suppliers. Whether a customer wants to lock in a long term multiple year contract, or continuously watch the market while entering into short term contracts is at the sole discretion of each individual, at that is the goal of Rhode Island electricity choice – to give the consumer options.
Below is a list of current alternative Rhode Island electricity offers to the Standard Offer Service. All rate plans and the Standard Offer Service are updated daily.