The passage of Senate Bill 1269 (1999), establishing the Virginia Electric Utility Restructuring Act, marked the start of a new era in the way Virginians buy electric power. Starting in 2002, consumers in the Commonwealth will have the ability to choose the entity from which they purchase electrical generation services.

Implementing the deregulation of the generation component of electric service is a complex undertaking. For most of the past century, electric power was sold at retail by licensed public utilities that were granted service monopolies within specified areas while their rates and services were subject to regulation by the State Corporation Commission. In moving to retail competition for electricity generation services, Virginia has joined a growing number of other states that seek to take advantage of the efficiencies and lower costs that a market-based system offers. While generation is being made competitive, other elements of electric utility service will continue to be provided as they were prior to the passage of the Restructuring Act. The distribution and transmission of electricity will remain regulated by the Commission and the Federal Energy Regulatory Commission, respectively.

While the shift to competition creates new opportunities for economic efficiencies, the General Assembly has acknowledged that implementing retail choice must be done in a manner that maintains the Commonwealths position as a low-cost electricity market and ensures that residential customers and small business customers benefit from competition.

Though the Restructuring Act was the product of three years of intensive work by a legislative joint subcommittee, it is widely acknowledged that the General Assembly's work did not end with the enactment of SB 1269. Restructuring Virginia's electric utility industry will be an ongoing endeavor, requiring monitoring of competition and addressing issues that arise as the framework established by the Act is implemented.

The Legislative Transition Task Force was established pursuant to § 56-595 of the Restructuring Act to work collaboratively with the Commission in conjunction with the phase-in of retail competition in electric services. The Task Force met eight times between June 23, 1999, and January 19, 2000. The Task Force recommended, after receiving valuable information and participating in lively airings of a range of perspectives, that the Restructuring Act be amended in the 2000 Session to address a variety of issues. Recommendations of the Task Force to the General Assembly include:

• Directing the State Corporation Commission to report to the Task Force, commencing January 1, 2001, with a recommended schedule and draft plan for implementing competition for metering services, billing services, or both.

• Implementing the Commission's proposed consumer education program, to be funded through the special regulatory taxes that the Commission is authorized to levy under existing statutes.

• Eliminating the possibility that incumbent electric utilities may be assessed negative wires charges if the projected market price for generation and other allowable charges exceeds the capped rate for electric service.

• Clarifying that a person providing legal services or uncompensated educational services, default services, or conducting certain other activities will not need to obtain licensure from the Commission as an aggregator.

• Re-writing provisions of 1999's Senate Bill 1286 relating to the conversion of the local consumer utility tax on electricity from a tax based on the cost of power consumed to a tax based on the amount of power consumed.

• Refining the definition of "projected market price for generation."

• Directing the Consumer Advisory Board to continue and expand its study of low-income energy assistance programs.

The Task Force also recommended several technical and clarifying amendments to the Restructuring Act. The recommendations of the Task Force were introduced in the 2000 Session as Senate Bills 163, 532 and 585 and Senate Joint Resolutions 95 and 154. All of the recommendations of the Task Force were enacted by the General Assembly.

Though the Task Force tackled a number of the controversial issues raised by passage of the Restructuring Act, its work is not completed. The Task Force is scheduled to remain in existence until July 2005. Until that time, it will continue to monitor the Commission's introduction of retail choice for electrical services, recommend appropriate legislation, and study the issues delegated to the Task Force by various provisions of the Restructuring Act.