Shelter from the Storm 
By Richard G. Johnstone Jr., Editor

Richard Johnstone
Richard Johnstone

As you’re probably aware, there’s a storm raging out in California over how — and some folks are even asking, why — that state’s legislators restructured electric utilities five years ago. And today — partly because of the flawed nature of that legislation, partly because of weather extremes out West, and largely because California has built virtually no new electric generating capacity in over a decade (despite robust growth in demand) — California is a state in a state of crisis.

That state’s situation is not unlike the story of the man listening to the radio and hearing a live news account of a driver going the wrong way on the nearby interstate highway. Knowing his wife would be driving on that highway at about the same time, he calls her on her car phone and warns her that there’s a driver going the wrong way. To which she replies, “What do you mean a driver? There’s hundreds of them out here!”

All of a sudden, California is on a high-speed thoroughfare, going in the wrong direction with no road map. One of the state’s large utilities is in bankruptcy, another is near bankruptcy, rolling blackouts have been necessary on several days since January, the Public Utility Commission recently voted an increase in residential rates of as much as 80 percent, and a long, hot summer looms just around the next bend.

Will the California storm come East? We don’t believe so. Some Virginians will begin selecting their electricity supplier next January 1 and all Virginians will have choice by January 1, 2004. There may or may not be competitive energy suppliers looking to sell electricity to you. At this point, rural and suburban residential and small business accounts are of little interest to most competitive electricity suppliers, because these accounts offer little in the way of profit. Which, ironically, is why cooperatives were formed in the first place, to allow those in unserved areas to provide themselves with an essential service.

However fiercely the winds of change may blow, your electric cooperative will be there, your “shelter from the storm."


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