Bill Slams Exits Used for Electricity Competition
Legislation that effectively eliminates two avenues for electricity customer choice in Virginia gets its first public hearing in a House subcommittee Thursday afternoon.
House Bill 2477, introduced by House Commerce and Labor Committee Chairman Terry Kilgore, prohibits additional customer choice if a utility’s overall demand is not growing more than two percent annually. That describes both Dominion Energy Virginia and Appalachian Power Company. It also requires customers who leave to keep paying non-fuel generation and transmission capacity related costs, things not previously charged to customers buying power elsewhere.
There are only three ways to break free of the Virginia monopoly electric service providers. Large industrial or commercial customers with a demand in excess of five megawatts can seek an alternative supplier. State law also creates an opportunity for a group of customers to aggregate their demand to reach that demand threshold and shop for electricity together.
The third route, open to all customers large and small, is the right to buy 100-percent renewable-sourced electricity from an outside supplier if the utility doesn’t have its own rate for such a product. That process is not changed by this bill. APCo now has such a tariff, closing that door, and Dominion was working on one but withdrew its application earlier this month.
The aggregation path to competition has been allowed for more than a decade, but the first commercial aggregation petition was approved for the Reynolds Group earlier this year. A series of such petitions have now been filed by companies including Costco, Wal-Mart and Sam’s Stores. All must make their case at the State Corporation Commission. State law will only allow customers representing one percent of the utility’s load to go elsewhere, and the SCC must reject a petition deemed harmful to the rest of the utility’s customers.
Departed customers do continue to pay utility distribution charges, since they continue to use the utility’s wires. Adding those generation and transmission-capacity costs mentioned in Kilgore’s bill reduce or wipe out the price advantage of competition.