Virginians Deserve Choice When Shopping For Renewable Energy
A state law passed in 2007 allows for a competitive renewable energy market, so long as utilities don’t provide comparable renewable programs.
The ability to shop for renewable energy amongst competitive suppliers is popular for residential and commercial customers alike.
Because major utilities in Virginia now offer renewable energy, the competitive market is effectively dead; the General Assembly should amend state law to reestablish a competitive renewable market in Virginia.
Virginia’s General Assembly will kick off the 2022 regular legislative session next month. Powered By Facts is in the midst of a weekly series walking readers through key legislative priorities that will help advance clean, affordable energy policy for all Virginians. Last week, we urged the General Assembly to expand the on-bill tariff program for energy efficiency upgrades beyond electric cooperatives to include territories served by investor-owned utilities. This week, we’re looking into why a state law severely limiting the competitive renewable energy market needs to be amended.
Way back in 2007, during a session in which Republicans controlled the House of Delegates and Democrats controlled the state Senate, the General Assembly passed a bill establishing a competitive renewable energy market. As long as an incumbent utility didn’t offer renewable energy products, customers in that utility’s territory were free to shop for the cheapest renewable energy from private, competitive suppliers.
This law permitting a competitive renewable market wasn’t used extensively during its first few years on the books. But as the cost of renewables came down toward the end of the 2010s, residential and commercial energy customers alike began to tap into the competitive market. In one 10-month period, from September 2019 through July 2020, 12,000 business customer accounts switched to competitive renewables. This is unsurprising; many businesses have commitments to eliminate or reduce their carbon emissions and are attracted to states with options for renewable energy. For example, a group of big businesses including Microsoft, Best Buy, and Walmart sent a letter to the State Corporation Commission in 2016 asking for expanded access to renewable energy in Virginia.
But more energy customers choosing different suppliers means less earnings for large utilities like Dominion Energy and Appalachian Power. By July 2020, both Dominion and Appalachian began offering renewables to customers, effectively shutting down the competitive market in much of Virginia as set up under the 2007 law. Customers who had switched to competitive suppliers before this point were not required to begin purchasing their renewable energy from utilities, but no new customers in utility territory were permitted to choose who they bought renewable energy from.
In 2020, a bill passed the General Assembly that would have allowed Virginians to purchase renewable energy from competitive suppliers even if an incumbent utility offered renewable options. But the bill contained a provision requiring that it pass the General Assembly a second time in 2021 in order to go into effect. Like so many other energy customer-friendly bills, the 2021 bill was killed in the Senate Commerce and Labor committee.
Virginians should have the power to choose who they purchase their renewable energy from. During the 2022 session, the General Assembly should move to remove language from state law that prohibits competitive renewable energy in areas where an incumbent utility provides a comparable program. Doing so would help to lower energy prices for Virginians, make the state more attractive to businesses, and facilitate more investment in clean energy projects while creating jobs. Permitting a competitive renewable market is not just the clean choice, it’s the economical choice.