RICHMOND — Nine organizations from across the ideological spectrum have formed an unlikely alliance to call for change in the way Virginians get their electricity, including breaking up the state’s monopoly utilities and letting customers choose their power providers.
Former state Attorney General Ken Cuccinelli (R) and others from conservative or libertarian groups stood alongside representatives from such left-leaning groups as the Virginia Poverty Law Center on Tuesday to announce the Virginia Energy Reform Coalition.
The coalition highlights what a lightning rod the political power of Virginia’s electric utilities has become. Dominion Energy is the state’s largest power provider and its biggest corporate political donor, spreading its influence to both major parties and helping to write its own regulatory legislation. The smaller Appalachian Power has similar clout in the southwestern section of the state.
The coalition’s slogan makes its target clear: “It’s Time to Take Back Our Dominion.” Its members said the state should allow monopolies only for the network of wires that distributes energy. Power production should be open to competition, they say.
“In this day and age, when there seem to be more and tougher obstacles to working across party and ideological lines,” Cuccinelli said, “I’m proud to stand here today with a politically eclectic group that is committed to modernizing Virginia’s electricity markets.”
Cuccinelli said the various groups had found unity in the goal of breaking up the insider influence of the utilities and setting up a competitive market.
The current system is built around a “fundamental imbalance,” said Brennan Gilmore, executive director of the progressive group Clean Virginia, which has been encouraging political candidates to refuse contributions from Dominion and Appalachian Power. “Our utilities have taken advantage of Virginians” to protect their “privileged and lucrative” monopolies, Gilmore said.
A spokesman for Dominion warned that the proposals would harm consumers.
“Deregulation isn’t the way forward for Virginia’s energy future,” Rayhan Daudani said via email. “In fact, it would be a step backward. Customers in deregulated states pay rates that are more than 40 percent higher on average and don’t receive nearly as much in return.”
Virginia tried deregulation once before, and it didn’t work. The General Assembly restructured the electricity market in 1999, during an era when many states experimented with opening energy markets to competition. But most such markets struggled, and in 2007 the legislature abandoned the experiment.
The State Corporation Commission has authority to oversee Dominion and Appalachian Power, setting rates and issuing rebates to customers when profits get too high. But in the past few years, the General Assembly has diluted the commission’s power. In 2015, with Dominion’s help, lawmakers passed a rate freeze that stripped the SCC of its power.
Faced with increasing political backlash, last year Dominion led the General Assembly in a comprehensive rewrite of regulatory law. The SCC is again restricted in its ability to oversee electricity rates, and the utilities are granted wide latitude to reinvest profits in new technologies and expansion projects.
The members of the Virginia Energy Reform Coalition said states such as Texas and Ohio have devised successful ways to deregulate the energy market and usher in competition that saves money for consumers. They consulted with Pat Wood III, who led the Texas utility commission in the late 1990s and served as chairman of the Federal Energy Regulatory Commission under President George W. Bush.
Wood said at the press conference that the idea is to construct a market that allows consumers to benefit from competitive pressures that can drive down energy prices, just as Dominion and Appalachian Power benefit now from fluctuations in the wholesale market.
In Texas, he said, that involved breaking up the big utilities and selling off their generation plants. As a result, he said, the energy market has evolved faster to embrace new technology and alternate sources.
Daudani, the Dominion spokesman, said later that the utility is already embracing renewable energy and modernizing the grid. “This coalition’s collection of grab bag policies was tried and failed and ultimately led to the bankruptcy of Enron,” he said. “We know how this story ends, and it is wrong for Virginia.”
The coalition was put together by James Presswood of the Earth Stewardship Alliance, a conservative conservation group. Other organizations involved are Appalachian Voices, Piedmont Environmental Council, the Reason Foundation, R Street Institute and the Virginia Institute for Public Policy.