Cheeseburgers and Pepsi
by Richard G. Johnstone Jr., Editor

Flash back, if you will, to NBC’s "Saturday Night Live" show in the late 1970s. One of my favorite skits featured the late John Belushi as a recent immigrant who’s running a diner. To every patron’s request — whether it be for a pastrami on rye or eggs over easy — he offers a simple reply. "Cheeseburger. No pastrami. No eggs. Just cheeseburger."

Then when the patron orders, say, a Coke or iced tea, he says, "No Coke. No tea. Pepsi. Pepsi and cheeseburger." Pepsi and cheeseburgers for breakfast, lunch and dinner. Such a meager menu not only makes good comedy, it also makes a good case for the benefits of choice. Man and woman cannot live on cheeseburgers alone, or wouldn’t want to, anyway.

A lot has changed since SNL aired that skit a generation ago. As consumers, we have a lot more choices now, in all areas of life, than we had even 25 years ago. Especially for banks and phone companies, deregulation in the early ‘80s led to benefits for consumers in giving us more choices of all kinds of new services. And by the end of the 1980s, only one regulated monopoly industry remained: electric utilities.

In the early ’90s, large commercial and industrial electric users began clamoring for choice in their electric supplier. And given our love as Americans for freedom of choice, it’s only natural that choice is now coming to electric consumers. In more than two dozen states, consumers either 1) for a couple of years have been, 2) are just now, or 3) soon will be, able to select the company that provides their electricity. Please note: In every state, the local utility that delivers the electricity through its wires to homes and businesses will remain the same. Choice — and thus competition — exists only with regard to which company provides the actual electricity flowing through the wires.

In Virginia, Virginia Power will begin a pilot program on September 1, in which up to 35,000 of its Richmond-area customers will be allowed to select their electricity supplier. One of Virginia’s 13 consumer-owned electric cooperatives, Rappahannock, has asked the State Corporation Commission to allow it to offer a pilot program for its consumers as well. And out of these two pilots and one that’s been proposed by American Electric Power will come insights that may help utilities, regulators, legislators, and average Virginians understand more about the who, what, when, where, why and how that drive a consumer’s choice of electricity supplier.

The pilots will be relatively short-lived, because real competition will begin just 18 months from now, on January 1, 2002, and be phased in over the succeeding two years, so that by January 1 of ’04, ALL Virginians will be allowed to choose their supplier of electricity.

Please know two things about electric cooperatives as customer choice approaches. First, that cooperatives view competition as a great opportunity to offer the advantages of the cooperative business model to new and different customers. For 65 years, Virginia’s electric cooperatives have combined local presence, stellar service and reasonable rates in a self-help recipe that has served dozens of Virginia communities well, and has generated a large and loyal following of folks who are members first, and customers second. Because of customer choice, there undoubtedly will be opportunities to offer this "Cooperative Advantage" to thousands of Virginians who’ve never been served by a cooperative before.

But secondly (and most importantly), please also know that your electric cooperative wants to remain as YOUR electricity supplier. Your cooperative was formed two generations ago to serve your area because no other utility was interested in serving it. Soon, there may be other utilities interested in providing your electric supply. And while your cooperative was your supplier of need in the past, it very much wants to be your supplier of choice in this new competitive environment.

As electric cooperatives, we welcome competition and choice. And we will continue to work hard to fiercely protect the interests of the residential customers who are so often forgotten in the discussion of electric choice. Because in almost every one of the two dozen states where electric choice is unfolding, suppliers are principally, if not solely, courting the large commercial and industrial customers. Electric suppliers, in state after state, are not vying to serve the small businessperson or the homeowner.

In fact, Adrienne Hahn, a lawyer for Consumers Union, which publishes Consumer Reports magazine, said recently that residential customers should consider pooling themselves to negotiate deals with power suppliers. What she’s proposing makes sense: that is, individuals banding together to do for themselves what none of them could do alone. What she’s proposing, of course, is a cooperative. An electric cooperative.