ELECTRICITY PILOT PLAN STILL HAS NO BIDDERS ; FOR THE SECOND MONTH IN A ROW, NO FIRMS HAVE SOUGHT TO...

Oct 21, 2004 - Richmond Times-Dispatch
Author(s): Greg Edwards

Volunteers for Dominion Virginia Power's pilot programs for energy choice will have to wait to buy electricity from a competing company.

 

For the second month in a row, no competitors have bid to supply customers under the utility's pilot program for home and small- business customers.

 

Two other Virginia Power pilot programs, also designed to test the competitive marketing of electricity on the retail level, are also in limbo because of a lack of participation by competitive power suppliers.

 

"There's not enough room in the market for suppliers to make a competitive bid and cover their costs and make money," said David Holt, Virginia Power's manager of retail access.

 

He said he was not surprised there were no bidders, but he added that competitors seem interested in the pilot and will make bids when the market changes.

 

"That proves that in order for us to get competition in Virginia, we're going to have to be willing to pay significantly higher prices than we've historically paid," said Irene Leech, president of the Virginia Citizens Consumer Counsel. "It's not worth it."

 

Price caps in the state's deregulation law will protect consumers until 2011, says Tim Murtaugh, a spokesman for Virginia Attorney General Jerry W. Kilgore, whose office is responsible for representing consumers. "The fact that Virginia prices are below- market now is good news," Murtaugh said. "Our hope is that competition does emerge, because it can only keep prices low."

 

Despite the lack of activity in the pilot programs, Virginia Power's Holt said the test programs have provided valuable information on the competitive marketplace. "We're learning what suppliers are interested in."

 

As many as 43,000 volunteers could take part in the pilot if competitors decide to participate.

 

A second pilot, now under way, allows roughly 200 big industrial and commercial Virginia Power customers to try to find an alternative electricity supplier. But in that test, too, no suppliers have enrolled.

 

A third pilot allows participating localities to aggregate the electricity needs of their residents and, if they can, find a competitive supplier that would sell them electricity cheaper than Virginia Power. Localities that have shown an interest include Chesterfield, Charles City and Fairfax counties and the cities of Hampton and Charlottesville. Like the other program, this one also lacks competitive suppliers.

 

Virginia Power first planned to begin the competitive programs in January but delayed them for lack of supplier participants. In May, the utility received permission from the State Corporation Commission to change the programs to provide more incentives to suppliers to participate.

 

One major change was the elimination this year of a transition charge that would have been tacked onto the bills of utility customers who switch power suppliers and the elimination or reduction of that charge in subsequent years. Competitors had called the charge as a major barrier to competition.

 

Other expected developments that may boost competition are Virginia Power's membership in the PJM regional transmission organization, which is by law to occur by Jan. 1, and the elimination of wires charges on July 1, 2007.

 

 


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