Is "Think Energy's" cheaper electricity pitch for real? Maybe not

Investigation Reveals Misleading Marketing in Rhode Island Electricity Market

By Uprise RI Staff

Rhode Island residents, already grappling with some of the highest electricity rates in the continental United States, are being targeted by alternative electricity providers promising relief from high winter rates. But a closer examination of these offerings reveals a complex pricing strategy that could leave consumers paying more, not less, for their electricity.

Think Energy, one of several third-party electricity providers operating in Rhode Island, recently launched a direct mail campaign promoting rates lower than those offered by RI Energy, the state’s primary electricity provider. While the marketing materials trumpet potential savings, our investigation found that the real story lies in the seasonal rate differences and contract terms that many consumers might overlook.

The Winter Switch

Think Energy’s current offering advertises a rate of 13.5 cents per kilowatt-hour (kWh), comparing favorably to RI Energy’s winter rate of 16.39 cents/kWh. At first glance, this appears to be a significant savings. However, the math becomes less favorable when examining summer rates and usage patterns.

The issue isn’t the winter rates — it’s what happens when summer arrives. Most Rhode Island households use significantly more electricity during summer months when air conditioners are running constantly.

When summer arrives, Think Energy’s rate remains at 13.5 cents/kWh while RI Energy’s rate drops to 10.4 cents/kWh (assuming 2024 rates). This price difference could eliminate any savings accumulated during the winter months and potentially cost consumers more over the course of a year.

Marketing vs. Reality

Think Energy’s website presents what appears to be misleading information about RI Energy’s rates. Their regulatory compliance page for Rhode Island shows RI Energy’s Summer 2024 rate as 14.9 cents/kWh — significantly higher than the actual rate of 10.4 cents/kWh.

The company’s terms and conditions reveal additional concerns:

• The ability to pass through additional costs due to regulatory changes or “market conditions”
• Mandatory arbitration clauses that waive rights to court trials and class action lawsuits
• Automatic data sharing with Think Energy’s solar affiliates
• Complex legal language that may obscure important terms

The Political Context

Some Rhode Island politicians have suggested that RI Energy’s high winter rates result from monopolistic practices and profiteering. Representative David Morales tweeted this Fall about RI Energy’s “wrong” rate increase:

Similarly, Representative Enrique Sanchez has proposed additional taxes on RI Energy:

However, these claims overlook a crucial fact: under Rhode Island law, RI Energy must pass through their actual cost of electricity without markup. Their profit comes solely from delivery charges, which cover infrastructure maintenance, employee costs, and storm damage repairs.

The Regional Reality

The high electricity rates plaguing Rhode Island reflect regional challenges rather than corporate profiteering. Several factors contribute to the region’s elevated rates:

1. Natural gas constraints: New England’s limited pipeline capacity drives up prices during peak demand periods.
2. Limited renewable energy infrastructure: While renewable energy provides price stability, Rhode Island’s renewable capacity remains limited.
3. Regional market dynamics: Electricity providers throughout New England face similar cost pressures, with some neighboring states experiencing even higher rate increases than Rhode Island.

A Consumer Strategy

For savvy consumers, Think Energy’s offering might present an opportunity for savings — but only with careful timing. Since the company doesn’t charge early termination fees for residential customers, consumers could theoretically:

1. Switch to Think Energy during winter months to benefit from lower rates
2. Return to RI Energy during summer months when their rates become more favorable

However, this strategy requires vigilance and an understanding of rate changes that many busy consumers might find challenging to maintain.

Reducing Your Bill

Rather than switching providers, consumers can often find more substantial savings through energy efficiency measures:

• Avoid electric heaters and heating appliances (except heat pumps) at all costs as they are much less efficient for the heat they produce.
• If your central A/C has a fan-only mode, be sure it is not running all the time.
• Consider upgrading to an energy-efficient induction cooktop if you have an electric stove
• Call RISE at (800) 422-5365 to schedule a FREE in-home energy efficiency assessment. This assessment is completely free and often includes free energy-efficiency upgrades for your home. There are no gimmicks or sales tactics. The assessment is paid for by a small charges added to all RI resident’s utility bills, so you might as well take advantage of it! EDITOR'S NOTE: I've used them and they're terrific.   - W. Collette
• Monitor device energy consumption using a Kill A Watt meter.

The Bottom Line

While Think Energy and other 3rd party providers’ winter rates might appear attractive, consumers should carefully consider the full annual cost impact before switching providers. The company’s marketing strategy appears designed to capitalize on winter dissatisfaction with high rates while potentially recovering those losses during summer months when electricity usage typically increases.

For most Rhode Island residents, the most reliable path to lower electricity bills lies not in switching providers but in reducing consumption through efficiency measures and taking advantage of free state-sponsored energy assessments.

Those considering alternative electricity providers should:

• Compare both summer and winter rates
• Read all terms and conditions carefully
• Consider the timing of high-usage months
• Understand their rights and obligations under the contract
• Monitor rate changes and be prepared to switch back if necessary

As Rhode Island continues to develop its renewable energy infrastructure and address regional gas pipeline constraints, residents may eventually see more stable electricity rates. Until then, careful consideration of alternative providers and a focus on efficiency measures remain the most reliable paths to managing electricity costs.