The Autumnal Equinox for Utilities
By Richard G. Johnstone, Jr.

September speaks of change. It speaks in the cacophonous cries of newly filled schoolrooms, and in the soft whisper of a breeze lightly laced with the tangy smell of wood smoke. The month of September also speaks to many of us through visible changes in the landscape that begin in earnest during the month. The late esteemed nature writer Hal Borland described September’s most notable natural change — the autumnal equinox — this way, in his classic 1957 book, This Hill, This Valley.

"The obvious truth is that Summer is past. The season merges with Autumn. The winesap reddens on the bough. The cricket chirps in the corner. The equinox is only a confirmation."

Electric utilities in Virginia and many other states are now passing through their "Autumnal equinox," as the long, comfortable summertime of life as regulated monopolies ends, and deregulation and competition approach. Straight ahead is customer choice — actual competition among electric suppliers for the business of every citizen and every company in the Commonwealth. Will the impending "Autumn" of deregulation be a pleasant one for all? Or will it only be pleasant for some, while others suffer from the cold pangs of higher prices? Much is uncertain as we enter this new "season" for electric utilities.

This much, though, is certain. If not for electric cooperatives, the proverbial "little guy" would likely be in for a long, cold fall — and winter, too. Electric cooperatives fought hard for average consumers when legislation was being passed in the 1998 and 1999 sessions of the General Assembly, mandating that all Virginians have choice of their electric supplier by January 1, 2004. Rate caps and other protections for electric customers were supported by electric cooperatives, and were included in the ultimate legislation. (Remember, consumers will only be choosing the utility that provides their electricity. The utility that delivers this electricity to the home or business will remain the same.)

The recent experience in southern California with electric utility deregulation shows, though, that there’s no clear (and perhaps no painless) path from regulated monopoly to free-market competitor. Ratepayers in the San Diego area this past summer saw their electric bills double and sometimes triple, as San Diego became the first area in the state where utilities were allowed to pass along costs to consumers. And unfortunately for San Diego residents, costs skyrocketed as increased demand for power met a diminished supply. The city council declared a state of emergency, and the mayor asked other cities to join in an effort to repeal the state’s deregulation law.

Virginia, of course, (thankfully) is decidedly NOT California. Virginia’s legislators built in a longer timeline, and other consumer protections, in deregulating the electric utility industry.

But as choice approaches, it’s not clear how many — indeed, even whether — other utilities will be interested in serving the residential and small business accounts that are the very heart and soul of electric cooperatives. But whether electric utility deregulation ultimately ends up offering choice to all, or merely to the very largest users, one thing is certain. And clear.

Virginia’s 13 consumer-owned electric cooperatives have served their communities well for 65 years, providing top-notch service at reasonable rates to residences and businesses in dozens of rural areas, small towns, and emerging suburbs across the Commonwealth. This deep-rooted commitment to our consumer-owners will only grow stronger as deregulation gains hold in the state.