In a region that has benefitted from competition, readers should be skeptical of a fear-based argument to benefit the utility. Instead, a reliable, affordable and sustainable clean energy future begins with ending Dominion’s grip on all–things electric in the commonwealth.
Eight hundred dollars more per year. That’s how much it will cost each Virginia household to achieve the commonwealth’s clean energy goal. Why? The state’s largest electric utility, Dominion, is a monopoly and Virginians must buy their power from the utility. Competitors can’t provide alternatives for more affordable clean power sources, at a time when Virginians should be benefiting from historically low power generation prices in the competitive markets.
Defenders of monopoly utilities are attempting to scare Virginians into accepting a future without electric choice by arguing that a proposed bill to introduce competition would lead to blackouts such as those recently experienced in Texas and California. The author of a recent Op-Ed provides no evidence beyond the claim that the legislation would “deregulate” Virginia’s electric industry, noting that California and Texas have deregulated — which is to say, competitive — electric industries.
But energy experts at the R Street Institute have identified several ways in which competition has improved generator performance, including that competitive markets have a superior reliability track record relative to monopolies. And several distinctions show Virginians have nothing to fear — and much to gain — from competition.
Virginia is part of a multi-state interconnected grid, PJM Interconnection. Its competitive markets are overseen by the independent Federal Energy Regulatory Commission. In contrast, Texas is largely isolated with few connections to neighboring states, unable to benefit from nearby surplus power during emergencies. Despite having more interconnections than Texas, California also largely operates as a siloed grid. The responsibility for maintaining sufficient resources for reliability is murky. This creates an accountability challenge when the lights go out.
In Virginia, however, the responsibility for reliability lies with PJM. PJM secures commitments from power providers to be able to generate electricity three years into the future through its capacity market. Neither Texas nor California operates a similar market.
While Virginia regulators currently oversee in-state power generation investment decisions, generators across the PJM region can compete to provide reliable power. PJM knows three years ahead of time that if a generator in Virginia fails, a generator in any of the 12 other PJM states could pick up the slack. This helps keep the lights on.
It is false that competitive regions lack oversight or the ability to plan for extreme weather events. All generators are subject to mandatory standards imposed by the North American Electric Reliability Corporation. Following cold snaps in 2013-14, PJM modified its market to provide weather preparation incentives for generators — which helped cut outages during a similar 2017-18 weather event nearly in half. PJM did not implement blackouts in either event.
In addition to the costs and reliability benefits of markets, clean energy advocates recognize that markets provide a clear path to a sustainable clean energy future — at a potentially lower cost than Dominion’s expensive plan. That’s why legislators are considering expanding competition to meet Virginia’s clean energy goal.
A 2020 study found that a carbon price in PJM would save consumers nearly $3 billion annually over the status quo. While carbon pricing is the gold standard for efficiently and economically reducing emissions, opening Virginia’s power generation to competition is a positive step.
Attempting to scare Virginians by loosely comparing California and Texas to Virginia, the author fails to mention Dominion’s $800 annual increase or the demonstrated reliability of PJM’s system. In a region that has benefitted from competition, readers should be skeptical of a fear-based argument to benefit the utility. Instead, a reliable, affordable and sustainable clean energy future begins with ending Dominion’s grip on all–things electric in the commonwealth.