THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Tuesday, September 19, 1995 TAG: 9509190039
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: Medium: 52 lines
Someday, futurists say, Americans will buy electricity the same way they do long-distance telephone service: by choosing from competing suppliers.
Electric utility executives, regulators and consumer advocates aren't so sure. But they're talking a lot about it.
On Monday, Virginia's State Corporation Commission moved the issue from board rooms and conference agendas smack onto its center stage. The commission launched an investigation into the benefits and disadvantages of introducing competition into electricity services. In so doing, it is inviting public comment on the matter.
The action puts Virginia's commission on a growing list of state regulatory agencies taking up the matter. A few, like California's, have actually advocated full-blown competition - known in the industry as retail wheeling. North Carolina already has an investigation similar to Virginia's under way.
In its order Monday, the Virginia commission pointed out that the state's electric utilities charge rates below the national average. ``Such standing does not mean, however,'' it added, ``that there are no improvements that can be made to provide reliable service at lower cost.''
Virginia Power and other major U.S. utilities have already felt the effects of increased competition. In recent years, federal regulators gave wholesale buyers of electricity - like cooperatives and municipalities - the right to shop around for power. That's helped drive down wholesale electricity prices and accelerated cost-cutting efforts by utilities.
The Federal Energy Regulatory Commission has proposed rules that would pave the way for retail customers - factories, shopping malls, even individual consumers - to shop around, too. That commission, known as FERC, envisions local utilities distributing power to those customers from any number of competing electricity generators.
Such a development, however, could not take place unless state regulators ease their rules. Electric utilities are heavily regulated at the state level.
Virginia Power said it welcomed the state commission's study. But E.M. Roach Jr., the utility's vice president-regulation, cautioned: ``Any change must come about in a careful, orderly manner.''
Environmentalists aren't sure of the wisdom of competition.
Trip Pollard, a staff attorney with the Charlottesville-based Southern Environmental Law Center, said he is concerned that a more freewheeling market will pressure utilities to rely more heavily on dirty but cheap-to-operate power plants. by CNB