Virginia is taking a careful approach to establish an effective competitive market for the generation of electricity. The overriding principal is to ensure service reliability and maintain reasonable prices.
Virginia’s competitive energy supply market will develop gradually. While the transition occurs, electric rates are capped until July 1, 2007. After that date, competition will determine the price consumers will pay for electric supply.
The Virginia General Assembly approved the Electric Industry Restructuring Act in 1999 following several years of study. Lawmakers will continue to monitor Virginia’s energy supply market and, if problems arise, can modify Virginia law as needed to advance competition.
Virginia has learned from California and other states that are further along in their efforts to develop a competitive energy supply. The Commonwealth wants to avoid their mistakes and build on their successes.
Virginia developed pilot retail choice programs to test the new structure of the marketplace. Virginia’s electric utilities are not being forced to sell off generating units. Although generation assets may be spun off into unregulated subsidiary companies, these power plants are expected to remain available to meet Virginia’s growing need for electricity.
New power producers have also announced plans for constructing several power plants in Virginia. If built, these proposed new projects could add another 6,000 megawatts of electricity to the power grid.
When purchasing generation from the competitive wholesale market, Virginia allows long-term contracts to be signed to protect against price volatility and ensure adequate supply for future needs.
Clearly, no one can predict the future. But Virginia is confident it is taking a thoughtful and responsible approach to electric industry restructuring that will allow competition to work as the General Assembly has directed.
For additional information, please call Virginia Energy Choice toll-free at 1-877-YES2004, e-mail Virginia Energy Choice, or write Virginia Energy Choice c/o State Corporation Commission, P.O. Box 1197, Richmond, Virginia 23218.