Virginia Bill Seeks To Eliminate Several Current Options For Electric Choice

January 20, 2023

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Copyright 2010-21 EnergyChoiceMatters.com
Reporting by Paul Ring • ring@energychoicematters.com

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Virginia HB 1770 would eliminate several of the current limited mechanisms for retail electricity choice in Virginia

As filed, SB 1265 was identical to HB 1770, but a Senate committee has recommended removing from the Senate bill the provisions which would revise the current electric choice paradigm in Virginia. The new choice restrictions remains in the current house Bill

HB 1770 would eliminate the option for two or more customers to aggregate demand in order to meet the demand threshold to purchase electric energy from a licensed supplier, and would eliminate the option for customers, who do not meet the size threshold, to purchase electric energy provided 100 percent from renewable energy from a licensed supplier if the customer's incumbent electric utility does not offer an approved tariff for electric energy provided 100 percent from renewable energy.

HB 1770 would further require that the purchase of electric energy from a licensed supplier of electric energy by a qualifying individual retail customer is limited to the purchase of electric energy provided 100 percent from resources that qualify as a renewable energy standard eligible source applicable to the customer's incumbent electric utility and requires a finding by the State Corporation Commission, after considering potential cost shifting impacts, that neither the customer's incumbent electric utility nor retail customers of such utility that do not obtain electric energy from alternate suppliers will be adversely affected in a manner contrary to the public interest.

Specifically, HB 1770 as introduced would provide that:

Only individual retail customers of electric energy within the Commonwealth, regardless of customer class, whose demand during the most recent calendar year exceeded five megawatts but did not exceed one percent of the customer's incumbent electric utility's peak load during the most recent calendar year unless such customer had noncoincident peak demand in excess of 90 megawatts in calendar year 2006 or any year thereafter, shall be permitted to purchase electric energy from any supplier of electric energy licensed to sell retail electric energy within the Commonwealth, except for any incumbent electric utility other than the incumbent electric utility serving the exclusive service territory in which such a customer is located, subject to the following conditions:

a. Any such purchase from a licensed supplier shall be limited to the purchase of electric energy provided 100 percent from resources that qualify as a renewable energy standard eligible source applicable to the customer's incumbent electric utility pursuant to subsection C of § 56-585.

b. The Commission shall only permit such a customer to purchase from a licensed supplier upon a finding by the Commission, pursuant to a petition filed by the customer, that neither the customer's incumbent electric utility nor retail customers of such utility that do not obtain electric energy from alternate suppliers will be adversely affected in a manner contrary to the public interest by granting such petition, and in making any such finding the Commission shall specifically consider any potential cost-shifting impacts to the utility's electric supply customers should the petition be granted.

For customers who didn't meet the current size threshold and had participated in retail choice under the renewable energy option (which would now be closed to such small customers), HB 1770 provides that any individual retail customer that, prior to January 1, 2023, entered into an agreement with a licensed supplier to purchase electric energy from such licensed supplier and that is no longer eligible to make such purchase may continue to purchase electric energy from the licensed supplier through the unexpired term of such agreement. The bill requires such customer to purchase electric energy exclusively through its incumbent utility following the expiration of such agreement.

The Retail Energy Advancement League opposed HB 1770, stating that the bill, "will raise electricity costs for Virginians, further restrict competition and stifle innovation in the state’s electricity markets, increase the carbon emissions and hand unjustifiably high profits to private electric utilities."

In a letter to lawmakers, REAL noted that, in 2021, there were 4,599 industrial and commercial customers (using > 5MW) enrolled with a competitive supplier (a 6,000% increase in enrollment from 2017-2021)

The majority of these customers chose energy with a higher renewable energy makeup at less cost than what their utility provides, REAL said

"From 2017-2021, Virginia C&I customers enrolled with a competitive supplier saved a total of $105,239,684 compared to Dominion Energy’s C&I rates for the respective years (source: EIA Electric Sales, Revenue, and Average Price with Data for 2021)," REAL said

Costco Wholesale noted that it has benefited from the current ability in Virginia for it to participate in electric choice

"We are continuously identifying ways to reduce costs and overhead so we can pass those savings on to our members. Energy usage is a significant operating cost and the ability to shop the competitive market, choose our energy supplier and tools to help us manage our energy usage is critical to maintaining our business model," said Shay Reed, Buyer: Energy, Utilities & Environmental Reporting for Costco Wholesale

Christopher Ercoli, President and CEO of the Retail Energy Advancement League, said, "Utilities should have to compete for their customers, and the swift response from Virginia's businesses demonstrates how frustrated we are to see another attempt to reinstate monopolies and force customers to use one utility. Now is the time to reduce barriers to competition in Virginia’s energy market and encourage innovation in products for an affordable transition to a clean energy economy. This bill does the opposite."

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