As an anonymous student of life once
noted, “I like progress. I just hate change.” Yet progress never seems
to happen without it. And, unfortunately, sometimes progress doesn’t
happen with it, either. Such was the conclusion reached earlier this year by
the Virginia General Assembly, when it passed legislation basically undoing
the law it had passed in 1999 deregulating the Commonwealth’s electricity
The intent of the ’99 legislation was
simple, and admirable: to save money for
ratepayers. Proponents believed that the deregulation law would help create
a viable free market, in which competitive suppliers would vie for the
’s electricity consumers,
from small residential to large industrial users. The hope was that the
benefits of this competition would be enjoyed across the Commonwealth, from
the Cumberland Gap to the Eastern Shore, and from Southside
to the D.C. suburbs.
was hardly alone in pursuing this free-market approach, in which the actual
electricity would be available from an array of suppliers, while the
delivery of that electricity would continue to be provided by the incumbent
utility. In all, about a dozen-and-a-half states decided to give electric
deregulation a chance, with the warmest of intentions that it would benefit
consumers. However, warm intentions met cold reality, and ultimately few to
no alternative suppliers
showed up to market power to
’s consumers. In fact, few suppliers showed up in any of the deregulated
states, and most that did offered higher, not lower, prices.
is well-known as a state that prides itself, with good reason, on having a
business-friendly climate. Trying to lower electric rates for all was a
good-faith effort to further burnish that reputation.
So the law passed by the 2007 General
Assembly may therefore be seen as a pragmatic, sensible acknowledgement that
electric deregulation simply did not work. This year’s law, which became
effective on July 1, returns Virginia to a model more like (but not
identical to) that followed for almost 100 years, with the State Corporation
Commission involved in all aspects of the electric-utility business, from
the generation of power, to its delivery to the Commonwealth’s homes and
farms and businesses.
This “hybrid reregulation”
legislation encourages several positive elements, including more
electric-generating capacity, more conservation, and more utilization of
renewable, or “green,” energy resources, all of which will likely be
needed to meet
’s rapidly growing demand for power.
Will this legislation result in lower
electric bills for consumers? In all likelihood, no. Will it result in
smaller increases than would have been experienced had
continued on the former (deregulation) course? Yes, probably.
Have rising costs for virtually all
fuels, both here and elsewhere around the world, already increased the cost
of electricity? And will rising concerns in Congress about greenhouse gases,
and likely legislation to limit them, also result in higher electricity
costs, no matter what Virginia’s (or any other state’s) legislature did,
or does? Yes, and almost definitely, yes again.
But in the midst of all these dizzying
changes, please remember there’s one thing that will NOT change: that is,
your electric cooperative will continue to provide you and your family with
electric service AT COST, just as it’s done for three generations.
That’s been the cooperative business model since our founding in the
1930s. The consumers are also the owners of the business; the business
provides service at cost to these consumer-owners; and the business, being a
cooperative, returns to them any funds left over, in the form of patronage
This business model is what allowed
’s 13 local cooperatives to electrify most of the Commonwealth’s
countryside, and to build the infrastructure powering the growth of emerging
suburbs across the state. This same business model has been faithfully
followed since our beginnings, through changes large and small.
So, with our business model firmly
established, our mantra moving forward will be a familiar
one: To put you first, as electricity consumer
and utility owner, through regulation, deregulation, reregulation, or
whatever may come next.