EnergyWindow MarketElert ^TM - November 2003 Supplement
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Focus on Virginia

Virginia has largely been a failed experiment in electric power deregulation. The percentage of qualifying load that has switched to competitive suppliers is one of the lowest in the country. In the summer of 2002, EnergyWindow experts, along with other energy deregulation experts, appeared before the Virginia State Corporation Commission to provide insights and recommendations for the Virginia electric power market. Many of these recommendations have been incorporated as part of an upcoming pilot program at Dominion Virginia Power, the largest electricity utility in the state.

In the new program, a change will be made in the way that participants' electric costs are unbundled. Although the bundled rate will remain unchanged, fifty percent (50%) of the costs that are currently treated as regulated "wire charges" will be redistributed as supply charges that are subject to competition. This creates more headroom for alternative suppliers to profitably compete with the regulated rate. Analysis performed by Virginia Power indicates that this should be sufficient headroom for competitive service providers (CSPs) to profitably offer savings to end-users with favorable load profiles. CSP feedback reaction to the pilot has been mixed. Time will tell whether the pilot will facilitate electric competition in Virginia Power territory.

Companies that would like to take advantage of the new pilot program must first register to participate. The initial registration period is November 15 - December 15. Representatives from Virginia Power say that web- and touch tone-based registration procedures will be in place by November 15. Companies with multiple facilities may find it easier to contact their Virginia Power account representative. On December 15, a lottery will be held to determine the initial pilot participants, up to a 200,000 kW ceiling.

EnergyWindow recommends the following rough timeline for those who are initially selected for the pilot program:
	12/15/2003 - 1/9/2004 - Participants should collect facility information, usage history, and other information to develop requests for quotations (RFQ).
	1/9/2004 - 1/23/2004 - RFQs should be made available to CSPs for bidding.
	1/23/2004 - 2/7/2004 - Final contract negotiations with the winning CSP.
	2/7/2004 - 4/6/2004 - The winning supplier must submit the change request to Virginia Power after February 7. The new contract will be effective as of the first meter read date after February 7.
	4/6/2004 - If a change request has not been submitted on behalf of the end user facility by April 6, then that facility is removed from the pilot program, returned to the capped Virginia Power Rate, and replaced in the pilot program by the next facility from the lottery (subject to the 200,000 kW restriction).

The pilot program is currently scheduled to end July 1, 2007. Pilot customers may return to the Virginia Power capped rate at any time, subject to minimum stay requirements imposed by Virginia Power and any termination fees owed to the CSP. Stay tuned to EnergyWindow Focus! for breaking developments.

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