Electric competition expansion is dead for the year, after Senate committee kills remaining proposals

By: - February 25, 2020 2:38 pm

Power transmission lines. (Ned Oliver/Virginia Mercury)

The powerful Senate Commerce and Labor Committee chaired by Senate Majority Leader Dick Saslaw, D-Fairfax, finished off the last remaining bills that would have expanded electric competition in utility-dominated Virginia at a meeting Monday night.

Sen. Tommy Norment, R-James City, characterized the proposals as a form of deregulation, telling colleagues that he couldn’t recall the legislature making a similar move “without a very deliberate process.”

“I think it would be precipitous for us to move down the path of deregulation at this time,” he said.

Sen. Tommy Norment, R-James City, (Ned Oliver/Virginia Mercury)

The view of the retail competition bills put forward in the House and Senate this session as dangerous steps toward deregulation has been staunchly promoted by both of the state’s electric monopolies, Dominion Energy and Appalachian Power Company. 

“It is deregulation and it’s taking us down a path that we’ve been down before,” said John Watkins, a former Virginia legislator-turned-Dominion lobbyist, who also cautioned lawmakers that allowing large customers to exit the utilities’ customer pools would result in larger costs being levied on ratepayers.

The State Corporation Commission last February found that if Walmart was allowed to obtain energy from a non-utility company, monthly bills could rise for Appalachian Power customers by five cents and for Dominion customers by 13 cents.

Proponents of the bills, however, have argued that far from deregulating Virginia’s tightly controlled electric market, the energy competition proposals would simply solidify and broaden competition provisions already written into state law.

Those provisions, which appear as part of the Virginia Electric Utility Regulation Act passed in 2007, have permitted retail competition in the commonwealth for 13 years in three instances.

The first is when a non-utility is selling “100 percent renewable energy” but the incumbent utility is not. The second is when a customer’s annual power use exceeds five megawatts. And the third is when a customer has multiple sites whose total power load is five or more megawatts — a situation affecting big companies with multiple facilities like Walmart and Costco — and the SCC finds that letting them “aggregate” those loads won’t harm other customers or go against the public interest.

The electric competition bills proposed in both chambers, largely by Democrats but including the bipartisan SB 376 from Republican Sen. David Suetterlein of Salem and Democrat Sen. John Bell of Chantilly, would have stabilized and expanded those exceptions.

Most critically, all of the bills would have done away with an existing provision that closes down the renewable energy market as soon as the incumbent utility has its own green energy tariff approved by state regulators. An application by Dominion that would result in this outcome is currently pending before the State Corporation Commission, while Appalachian Power’s tariff has been in place since January 2019.

About half of the bills would also have let all large customers aggregate their loads in order to get their power from someone other than the utilities.

But despite enthusiastic support from long lines of environmental and renewable energy industry groups who showed up to lobby on behalf of the changes, lawmakers in the Senate held a firm line against any intrusions on the utilities’ customer bases. 

Senate versions of all proposals were struck down early in the session by Commerce and Labor

In the House, however, Democrats and several Republicans bucked the utilities’ desires in committee and floor hearings to pass two electric competition vehicles. Passed back to Senate Commerce and Labor for its review, however, both died swift deaths Monday.

One, HB 868 from Democratic Del. Jeff Bourne of Richmond, will be back next year. That narrow bill aims to remove the market closure provision for renewable energy and, at the motion of Norment, was continued to the next session for further consideration.

The other, HB 889 from Democratic Del. Mike Mullin of Newport News, would have achieved the aim of Bourne’s bill while also expanding large customers’ right to aggregate. A Hail Mary attempt to get the legislation through the Senate committee by transforming it into a limited pilot study that would evaluate whether the changes would produce the cost-shifting utilities warned lawmakers would result, failed; a motion to kill the bill squeaked through on an 8-6 vote with Norment abstaining.

“It is unfortunate that efforts to preserve competition in the market for those that want to pursue 100% renewable energy for the benefit of the commonwealth didn’t move forward this session,” said Bryn Baker, director of policy and innovation for the Renewable Energy Buyers Alliance, a group representing large retail and industrial customers like Amazon and Microsoft. “This will result in less choice, slower renewable energy deployment and higher costs for customers.” 

Jesse Dickerman, director of corporate affairs for third-party energy provider Direct Energy, called the votes “a clear win for Dominion’s monopoly and a loss for the people of Virginia.

“There’s nothing more expensive than allowing Dominion to control all decisions around the green economy,” he said.

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Sarah Vogelsong
Sarah Vogelsong

Sarah is the Mercury's environment and energy reporter, covering everything from utility regulation to sea level rise. Originally from McLean, she has spent over a decade in journalism and academic publishing. She previously worked as a staff reporter for Chesapeake Bay Journal, the Progress-Index and the Caroline Progress, and her work has been twice honored by the Virginia Press Association as "Best in Show" for online writing. She was chosen for the 2020 cohort of the Columbia Energy Journalism Institute and is a graduate of the College of William and Mary. Contact her at [email protected]

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