2014-02-28 / Front Page

Electricity Market Amps Up

By Tom ­Walsh

After flooding Aquidneck Island and the rest of Rhode Island with targeted marketing materials, officials of Connecticut-based North American Power hope that current National Grid residential and smallbusiness customers will switch to them for their electricity supply.

But time is growing short. The company’s offer expires Feb. 28.

Rhode Island became the first state to deregulate its electric industry in 1996. That opened the door for unregulated companies such as North American Power to compete with regulated companies such as National Grid. In January, North American elevated its profile with an aggressive direct mail and television advertising campaign that included a spot in the Super Bowl’s local advertising menu.

The company’s thrust so far has been to take advantage of a National Grid price increase to 8.88 cents per kilowatt hour. North American Power’s temporary price has been set at 7.49 cents per kilowatt hour. The company promises to charge less than National Grid at least through June 30, when rates for both companies could change. Customers are free to cancel the arrangement at any time without penalty.

“We feel as though we have a product that all Rhode Islanders should be interested in taking a look at,” said Tiffany Eddy, North American Power spokeswoman. “Our goal is to help people save money and to empower people with options.”

Aquidneck Island is an inviting prospect. According to a 2010 study by the Opinion Dynamics Corporation, National Grid had 30,163 residential customer accounts and 5,194 non-residential accounts in Newport, Middletown and Portsmouth. According to American’s marketing documents, “more than one million consumers throughout New England have chosen a new retail electric supplier.”

Eddy said that at last count, more than 5,000 Rhode Islanders had signed up to switch to North American Power. She said she did not know how many of them are from Aquidneck Island. In its most recent direct mail package, the company said the offer applies to the first 10,000 new customers who switch from National Grid. However, the document also states that the offer expires on Feb. 28. Eddy confirmed that the North American Power campaign is set to close at month’s end.

How can the unregulated electricity newcomer undercut National Grid’s price this way?

“When energy choice came to Rhode Island, it created opportunities for companies like ours to buy electricity on the wholesale market and sell to utility customers, thus giving us the ability to pass a percentage of those savings on to you in the form of a lower rate,” wrote Kerry Breitbart, North American Power founder and CEO, in a letter that may have arrived in just about every Aquidneck Island mailbox over the past two months.

“You can choose a new, non-regulated power producer in Rhode Island with security and confidence that National Grid will continue to deliver the electricity through the wires, poles, and meters that they own and operate,” North American Power maintains. “National Grid will continue to service your lines, read your meter, and send you the same bill with your new, non-regulated power producer’s competitive electric supply charge instead of National Grid’s supply charge.”

Eddy also said that customers who switch to North American Power for their electricity supply will receive a phone call from the company during April to discuss a new rate offering available to them prior to June 30. “They will be able to make whatever decision is right for them,” she said. “We are a company that believes in the community and in solving problems.”

David Graves, a National Grid spokesman, estimated that as of late 2013 there were about 6,000 Rhode Island residential customers using unregulated electricity suppliers. He could not estimate how many National Grid customers had responded to North American’s marketing campaign. He said large commercial and industrial National Grid customers have long been engaged with alternative electricity supply companies.

“But this is the first time in Rhode Island that this kind of marketing campaign has occurred at the residential level,” Graves said. He added that customers opting for alternative suppliers do not have an impact on National Grid’s bottom line.

“If a customer wants to do this, he or she should make the best decision for themselves,” Graves said. “Our advice to them is to know your energy needs and make an informed decision.”

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