For people too young to remember or for those who are just not aware, Virginia already plowed the ground of electric deregulation years ago. As a member of the General Assembly, not only was I in favor of it, I sat on the study committee that created the report to the General Assembly and then Gov. George Allen that led to the Commonwealth’s experiment with deregulation.
The idea is simple: more competition equals more choices which means lower rates. Right? This is exactly what we thought as members of the General Assembly during the late nineties. We had hoped to help lower rising electricity prices for residents in the Commonwealth. After hearing testimony from many groups advocating in favor of the measure as well as those against, we decided to move forward but take a cautionary approach, partially deregulating and engaging in a multi-year study to see if the program would work so as not to put consumers and businesses at risk.
At the time, multiple other states including California, Pennsylvania, Maryland, and Delaware had implemented either partial or complete deregulation hoping for the same result of more competition leading to lower electric prices.
But this never happened. Not in Virginia, or in any other state.
What we witnessed was the exact opposite of what we had hoped for in price as electric rates soared in deregulated states while those that were regulated remained steady and below average. A trend that has remained to this day.
We abandoned the experiment and reregulated due to the failure to decrease consumer prices as well as fears of impacting grid security and consumer protection.
The current calls to restructure and deregulate Virginia’s electricity market simply don’t make much sense with the current reliability and affordability that we currently enjoy.
The role of regulated electric utilities is to provide reliable energy at steady and affordable rates, while protecting consumers from volatile wholesale market prices. This is exactly what Virginians currently have access to: secure, reliable energy at rates that currently are a healthy 8% below the national average. Compare this to our deregulated Mid-Atlantic and New England neighbors whose electric rates are a whopping 34% above the national average.
What is disappointing is this current push for deregulation doesn’t seem to have good intentions.
Seven months ago, I wrote an op-ed that referenced this very issue about which I am concerned. This seems to be nothing more than an anti-corporate campaign attacking Dominion Energy, regulators, and legislators, all of whom take great care in overseeing grid security and that consumers receive energy at affordable rates, protected from volatile wholesale prices.
What do these advocates think will come with deregulation? The irony is that what they are proposing will open the flood gates to rogue reselling and trading behemoths from out of state with no interest other than increasing their profit margins.
These companies have spent millions of dollars lobbying to gain access to states across the country. Now, many of these states are attempting to heavily restrict or completely reregulate due to massive consumer cost increases as well as fraudulent and predatory sales tactics, primarily targeting low-income communities and seniors.
The health and safety of Virginians, as well as the economic prosperity of the state, depends on electric security and affordability, which is exactly what we currently have, and it’s imperative for all Virginians that it remain that way.