Cover Story

Shedding Some  Light on Virginia  Energy Choice
by Jeb Hockman, Contributing Writer

Choice: It’s the American Way

America is the land of choices. We can choose where we live, what we wear, what kind of car we drive — even at which fast-food restaurant we eat. In Virginia, many of us will have the opportunity to choose who supplies electric power to our homes and businesses.

With the implementation of Virginia Energy Choice, the price of electricity supply will no longer be regulated or set by the State Corporation Commission. The theory behind Virginia Energy Choice is that suppliers will compete for your business. As an electric cooperative customer, you can choose to get power from your cooperative or from a competing supplier, called a Competitive Service Provider or CSP. You do not have to choose! Staying with your cooperative is a choice.

The 1-2-3 of Getting Power to You

Now, your electric cooperative (1) generates and/or purchases wholesale power, (2) transmits the power to your area and then (3) distributes the power to your home, farm or business. This is called “bundled” service.

Virginia Energy Choice opens step 1 to competition and gives consumers the choice of the company who will generate and supply power. No matter which supplier you choose, your electric cooperative, as your Local Distribution Company (LDC), will continue to be responsible for delivering the power to you.

The cost for each step will be separate on your monthly bill. And, even though the SCC will no longer regulate the cost of generating electricity, the charges for delivering your power will continue to be set and controlled by this government agency.

How Many Choices?

You may have two or three choices. You may have none. Virginia Energy Choice simply gives Competitive Service Providers the opportunity to compete for your energy-supply business.

Initially chances are that if you live in a more densely populated suburb, you may have more choices than someone who lives in a less populated, rural area of the state.

As time goes by and more suppliers enter the market, there could be more choices than when the program initially begins.

For your protection, all Competitive Service Providers must first be certified and approved by the SCC and obtain additional permission from your local electric cooperative.

A Kilo-what?

When we compare prices for gasoline, we check the price-per-gallon. To compare the cost of electricity, cents per kilowatt-hour is a typical measure.

A kilowatt is simply 1,000 watts of electricity. Your energy usage is computed in kilowatt-hours. A kilowatt-hour is a 1,000-watt unit of electricity used for one hour. The cost is shown in cents per kilowatt- hour (c/kWh). For example, the typical Virginia home may use around 1,000 kilowatt-hours per month.

Your Price to Compare

Soon, your electric cooperative will provide to you a “price to compare.” This is the price that a competitor would have to beat for you to pay less than you now pay for the energy-supply portion.

But be aware that the price to compare isn’t the only factor to consider when choosing an energy supplier. Before choosing an electricity supplier, make sure you compare such things as the length and terms of the contract, types of payment plans, if the price is fixed or variable, whether there are any additional fees, and are there any non-monetary costs or benefits.

Another Choice: Share Your Info or Not?

Virginia Energy Choice requires all utilities, including your local electric cooperative, to provide customer information to Competitive Service Providers certified by the SCC to sell power in Virginia. This information would include your name and address and your history of electricity usage.

You have the choice to share or not share this information with other service providers. If you do not want your co-op to release this information, you must contact your co-op and “opt out.”

“Opting out” can be done by marking a box on your monthly bill, contacting your local cooperative business office by letter, telephone or, in some cases, completing a form on their Web site.

Be aware that even if you decide not to share this information, you may still be contacted by a marketer who may have obtained your name and address by other methods. “Opting out” of the mass listing does not mean you cannot choose.

Virginia Energy Choice: Learn the Terms

Competitive Service Provider (CSP): A person or company licensed by the State Corporation Commission to offer and sell competitive energy services in Virginia.

Competitive Transition Charge: A fee that can be added to your monthly bill by your Local Distribution Company (LDC) if you choose a Competitive Service Provider for your energy. This fee is to cover commitments made by the LDC when it was required to provide energy-supply service for all of its customers.

Distribution: The delivery of electricity by a Local Distribution Company directly to a home, farm or business.

Generation: The production of electricity by a power plant fueled by various raw energy sources (nuclear, coal, oil, natural gas, hydro, etc.).

Kilowatt-hour (kWh): A 1,000 watt unit of electricity used for one hour.

Local Distribution Company (LDC): The utility that owns, maintains and operates the distribution lines and equipment to deliver electricity to customers. (Your electric cooperative will remain your LDC whether or not you choose a CSP.)

Price To Compare: The average price per kilowatt-hour of electricity now charged by your local electric cooperative, less any Competitive Transition Charge, which may be used to compare offers from other energy suppliers.

State Corporation Commission (SCC): The Virginia state government entity that oversees electric utilities and the Virginia Energy Choice program.

Transmission: The movement of electricity from a generating facility to the Local Distribution Company.

Have Questions? Ask Us.

Change can be scary. Never fear, your electric cooperative is here to help. And we’re as close as a phone call or a visit to our local business office.

One of the advantages of being a cooperative member is that we are right here in your community with friendly people available to answer your questions and concerns. The more you know about Virginia Energy Choice, the better the chance you will make the decision that’s right for you. At your cooperative, our first job is always to answer to you.

And if you have questions or comments you would like addressed in future issues of this magazine, contact Cooperative Living magazine by e-mail (bsherrod@odec.com), or send questions and comments by mail to Energy Choice Questions, c/o Cooperative Living, P.O. Box 2340, Glen Allen, VA 23058-2340.

Other sources of information are our Web site (www.odec.com) or the Virginia Energy Choice Web site (www.yesvachoice.com). You can also call toll-free: 1-877-YES-2004.

All Energy Suppliers Aren’t the Same

Your electric cooperative is different from most energy suppliers.

Cooperatives are operated on a not-for-profit basis and put the needs of their customer-owners first. Other energy suppliers are privately-held or investor-owned companies in business to make a profit for their owners or stockholders.

Since the 1930s, Virginia’s 13 member-owned electric cooperatives have provided reliable service at the lowest possible cost. In fact, electric cooperatives were organized to get power to the thousands of Virginians living in rural areas that the big utilities considered too sparsely populated to provide energy at a profit. Today, Virginia’s electric cooperatives serve over 1 million people in 64 counties.

With local management and business offices and a board of directors elected from the membership, your hometown electric cooperative is there to keep your lights on 24 hours a day, 365 days a year, now and for years to come.

Cooperatives return any profits to you, the owner and ratepayer.

Some Answers ...

Who Do I Call if the Lights Go Out?

You call the same people you have always called —  your hometown electric cooperative. 

Even if you choose another provider for your power and energy supply, your local cooperative will continue to provide the reliable service you have enjoyed for years. Lightning, ice storms or whatever Mother Nature may bring, we’ll be here to restore your power and keep the lights on.

If I Choose a CSP, Will I Still Be a Cooperative Member?

Yes, you remain a member-owner of your local cooperative whether you purchase your power from the cooperative or from another service provider. You will be treated the same as always. And best of all, you will still have a voice in how your local cooperative is operated.

However, your capital-credits allocation will change, since your patronage with your cooperative will have changed.

Will My Monthly Bill Change?

Your new bill will be different, as Virginia Energy Choice requires that the amount charged for electricity be shown separately from the charges for delivering it to your residence or business. Applicable taxes will also be included, as will information about your energy use during the past 12 months. So, your new bill will contain much more information than it has in the past.

Customers who choose a new energy provider may also see a “competitive transition” charge on their monthly bill. During the transition period (through July of 2007), state law permits your present service provider, such as your electric cooperative, to add a charge to help pay for past investments in power plants.

Do I Have to Choose an Energy Supplier?

No, you have the choice of “choosing not to choose.”

If you want to continue having your local cooperative provide your power, you don’t have to do anything. To protect you from unscrupulous marketers, Virginia Energy Choice makes it illegal for Competitive Service Providers to switch or “slam” you without your written permission.

When Will Virginia Energy Choice Begin?

It depends on where you live and which electric cooperative serves you.

Virginia Energy Choice may begin in your area in the next few months, while in others it may not be available until the program is fully implemented in January of 2004. Your local cooperative will keep you informed as to when Virginia Energy Choice will begin in your service area. No matter who you are served by, Choice will be available no later than Jan. 1, 2004.

Remember, Virginia Energy Choice does not guarantee that you will have an opportunity to choose providers. This depends on whether a Competitive Service Provider decides to offer service in your area.

 

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