Bipartisan bill seeks to demonopolize state electric energy market

Dels. Mark Keam and Lee Ware seek to create a “pro-choice” electric energy market

Published January 7, 2020 by Sydney Lake

State Dels. Mark Keam, D-Fairfax, and Lee Ware, R-Powhatan, held a press conference Tuesday to announce a bipartisan legislative effort to demonopolize Virginia’s electric energy market.

The Virginia Energy Reform Act — which does not yet have a bill number —would establish a competitive market for electricity retailers; require monopoly electric utilities to cease business generation; establish a nonprofit independent entity for distribution; remove financing barriers to customer-owned energy resources and build in consumer protections and education in energy choices.

In May 2019, a bipartisan coalition was formed to draft a bill that would address electric energy market competition and consumer choice.

“The bill is a way to make sure our state’s laws are catching up with what’s been going on in the marketplace for many, many years,” Keam said. “In Virginia, we are stuck with a century-old, business-as-usual model that benefits monopolies while suppressing competition and consumer choice. It’s time to reform the rules of the road.”

Dominion Energy and Appalachian Power own and operate all segments of the energy market for the consumers they serve in Virginia, from electricity generation to the distribution system of wires and power poles to retail customer services.

“While we don’t comment on pending legislation, deregulation isn’t the way forward for Virginia’s energy future. In fact, it would be a step backward,” Dominion Energy spokesman Rayhan Daudani said.

A goal of the legislation is to lower electric energy prices, thus making energy bills more affordable for low-income households. Virginia tried deregulating electric utilities 20 years ago and the effort was unsuccessful, largely because competitors couldn’t afford to undersell the consumer electric prices offered by Dominion and Appalachian Power. (See related story from July 2019.)

“Customers in deregulated states pay rates that are more than 40% higher on average and don’t receive nearly as much in return,” Daudani said. “As it stands today, our Virginia customers get a great value. They pay low rates, have great reliability and are getting more clean energy.”

Ware, however, argues that competition will drive down prices.

“We really believe that if we can unleash some of the innovation that’s available, that we can offer opportunities,” Ware says. “We can offer opportunities for both businesses and individuals to see better rates as a result.”

For regions across the state that rely more heavily on energy and electricity production for their economies, Ware says there will be a “reconfiguring” in the number of employees needed at major energy sources — hesitant to call it a disruption.

“There will be a reorientation in the nature of things,” Ware says. “In a sense, it’ll be a disruption, but I would say it’s reform, reconfiguring.”

The General Assembly convenes at 12 p.m. Wednesday, and the bill has been prefiled and will be introduced on Jan. 8. Its committee referral is pending.