While electricity deregulation in Virginia has been a widespread failure to this point, a new survey released this week showed that an astounding 85% of Virginians want to have the option to choose an electricity supplier.

Conducted by Richmond, VA-based Conquest Communications Group on behalf of energy retail provider Direct Energy LLC, the survey of 800 Virginians found overwhelming support for energy choice and opposition to pending legislation that would eliminate the possibility of competition among Virginia electricity providers.

“We think customer choice and competition is right for all Virginians,” said Frank Lacey, director of government and regulatory affairs for Direct Energy. “Based on the results of the survey we think Virginians feel the same way.”

That legislation is currently moving full steam ahead in the state with both houses in Virginia’s General Assembly having passed separate bills being pushed by Dominion Virginia Power that would end retail choice early and set up a hybrid form of regulation, ensuring a set rate of return for utility generation, distribution and transmission. SB1416 currently awaits action from Gov. Tim Kaine (D). The governor has until March 26 to send amendments back to the legislature for them to accept or reject.

“Virginians want energy choice and are opposed to this utility-supported power play in Richmond,” said Brian Greene, spokesman for the Coalition of Marketers for Energy Competition (CMEC). “We call on Governor Kaine to amend this legislation to allow for fair competition among energy providers.”

Seizing an opportunity in December, a few months after state regulators cited a laundry list of retail market failures, Dominion floated its proposal at the General Assembly’s Commission on Electric Utility Restructuring with an aim of returning to a regulated market structure. The plan, which has changed little since being presented, would remove the rate cap on retail power sales in Dec. 31, 2008 rather than in Dec. 31, 2010, would abolish retail customer choice for small customers at the end of 2008 — customers with more than 5 MW of demand would still have choice — and would set the company’s rate of return (ROE) on generation, distribution and transmission at 600 basis points over the yield of long-term investment grade bonds in the Baa category.

There is no denying that retail deregulation has failed to this point in Virginia as shown in reports by state regulators that highlight the fact that competition has yet to develop. Without competition, it was acknowledged that something needed to be done to avoid allowing Dominion to become an unregulated monopoly once price caps were lifted. While there is a lack of competition in the state, some suggest that it is due to the way the electricity market is structured rather than a lack of support from Virginians.

“The Virginia market has had a wires charge, which is another name for stranded cost charge, but it was only going to be charged to customers who switched suppliers, so it rendered the market uneconomic the entire time,” Lacey told Power Market Today. “While the wires charge is now gone, I think there are still some provisions that they could re-implement the wires charge, but now the rates are just not competitive. Certainly Direct Energy would love to serve Virginia customers. If Dominion ever truly allowed competition, we would be there. If the markets were open, right and well developed we would be in the market serving customers. They’re just not there and they have never been there.”

The survey also found that 66% of Virginians favor competition among electricity providers to keep rates low, while only 18% believe residents should rely on government regulation of monopoly electric utilities to maintain low rates. Nearly 67% believe the cost of building nuclear and/or coal power plants should be borne by the utility and oppose plans to have those costs covered by ratepayers, while 76% of Virginians are unaware of the just-passed utility-supported legislation. Seventy-two percent believe Governor Kaine should make changes to the legislation to create the possibility of more competition among electric providers.

“If signed into law, this monopolization bill will benefit only the utilities and the special interests behind it,” said Irene Leech, president of the Virginia Citizens Consumer Council. “Virginia residents and small businesses should not allow this to happen. They stand to lose too much.”

The survey of Virginians has a margin of error of +/- 3.54, meaning that in 95 out of 100 cases, this survey will yield results within 3.54 points of actual opinion among the population surveyed.

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