The proposed bill will expedite a more affordable and reliable transition to a clean energy economy and expand access to the products and services available in the competitive energy market.
RICHMOND – Virginia Customers for Energy Choice, a diverse coalition of customers, businesses and environmental groups banded together to support Senate Bill 591 (SB 591) to expand competition with state electric utilities and reduce restrictions on customers being able shop for affordable and clean energy products. Sponsored by Senator Jeremy McPike (D-29), this legislation leverages Virginia’s existing retail electricity laws to help address increasing costs for consumers and achieve state-mandated clean energy goals.
The majority of Virginia’s electric market is controlled by two utilities. Compared to other states that allow competition, Virginia imposes significant restrictions on the limited number of commercial and industrial customers allowed to access the competitive energy market and choose their energy supplier. Currently, no residential customers may choose a clean energy or associated retail product if their utility offers a clean energy plan, even if it is more expensive or has less attractive renewable attributes than competitors. A 2021 survey revealed that 83% of Virginia’s residents support energy choice.
State utilities have projected an increase in electric demand, reliability concerns, a lack of renewable energy to meet existing and future demand and the need to deploy energy efficiency and energy use management tools. Fewer market participants, innovations, and private investments in the market will result in singular and narrow, costly paths forward and fewer opportunities to affordably and reliably address these challenges for Virginia’s residents.
According to the Energy Information Administration (EIA) in 2022, Virginia’s utilities increased electric rates 18% for commercial and industrial customers. The limited Virginia customers that were able to shop saved more than $105 million compared to utility rates between 2017-2021 and the majority were enrolled in plans that were 100% renewable energy.
“We are continuously identifying ways to reduce costs and overhead so we can pass those savings on to our members,” said Shay Reed, Assistant General Merchandise Manager for Costco Wholesale. “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.”
Virginia’s top economic drivers are energy intensive industries. However, state utilities warn they cannot accommodate the growing demand, jeopardizing future investments and creating uncertainty for existing customers. Energy is a top operating expense and businesses want options on price, renewable make-up and energy use management tools and products. Competition supports jobs, increases tax revenue, and drives investments in clean energy technologies.
“Energy is a top operational expense for our commercial enterprise. With Senate Bill 591 removing some of the barriers to competitive energy markets, we will have the freedom to select the most cost-effective supplier, enabling us to enhance our competitiveness in Virginia’s business landscape,” said Robert Pizzini, Managing Partner and CEO for iFLY. “Ultimately, these savings will help offset the increases in minimum wage, Dominion Energy rates, and other notable cost increases over the past three years. This bill enhances our ability to thrive and grow, driving economic prosperity within our community.”
States that allow competition with utilities outperform those with monopolies by reducing overall electric costs and carbon emissions, supporting the transition to clean energy, promoting electric vehicle adoption, and implementing energy efficiency and use management tools without relying on ratepayer or state dollars. Allowing retailers to compete for the state’s larger customers will reduce the amount of capacity the utility must purchase from the wholesale market during periods of peak demand, ultimately lowering the cost of electricity for ratepayers who remain with their utility.
The coalition supporting SB 591 represents a wide spectrum of Virginia business and environmental interests and can be viewed here.
About Virginia Customers for Energy Choice
Virginia Customers for Energy Choice is a coalition of customers, businesses and Virginia organizations representing environmental and economic interests that support legislation to reduce barriers to electric competition and create access for customers to purchase energy products and services from the competitive market.
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