REPORT OF THE CONSUMER ADVISORY BOARD
to the
LEGISLATIVE TRANSITION TASK FORCE

December 8, 1999

The Consumer Advisory Board met on November 29, 1999. The meeting encompassed two distinct areas: the State Corporation Commission's draft report of its Consumer Education Plan, and consideration of amendments to the Electric Utility Restructuring Act addressing low-income energy assistance and renewable energy sources.

PART I: CONSUMER EDUCATION PLAN

In response to the request of Senator Norment, Judge Moore of the State Corporation Commission mailed a draft of the consumer education plan to each member of the Consumer Advisory Board on November 15, 1999. Members were invited to provide any comments and suggestions quickly, in order that they could be considered prior to finalizing the report.

Ken Schrad of the SCC's Division of Information Resources presented the draft of the consumer education plan to the Board at its November 29 meeting. Comments and suggestions made by members of the Board included:

• Ensuring that low-income persons and representatives of the Consumer Advisory Board, the Department of Education, and small business organizations are represented on the "Virginia Energy Choice" Education Advisory Committee to be established by the Commission;
• Ensuring that information provided by electric suppliers is consistent with the information to be provided under the SCC's education plan;
• Broadening the membership of the proposed speaker's bureau to include persons other than SCC employees;
• Identifying licensed aggregators, suppliers, and rate options;
• Providing a process to resolve disputes between the Commission and vendors regarding marketing materials;
• Addressing how "green" energy will be evaluated;
• Involving the cooperative extension service in outreach efforts;
• Addressing confusion that may result when information materials are disseminated to areas served by municipals power providers and cooperatives, where the provisions prepared for areas served by investor-owned utilities may not apply;

The Consumer Advisory Board adopted a motion stating that it generally supports the State Corporation Commission's draft Consumer Education Plan, and wishes to commend the SCC's Division of Information Resources for its work on the plan. The Board also wished to note its specific recommendations concerning the plan, some of which may have been incorporated into the final versions of the Plan released on December 1.

Though it is outside the scope of the Electric Utility Restructuring Act, the Consumer Advisory Board recommends that the members of the Task Force consider the issue of whether the natural gas deregulation legislation (Senate Bill 1105) from the 1999 Session should be amended to direct the establishment of a consumer education program for natural gas customers that can be coordinated with the consumer education program for electric industry restructuring.

PART II: AMENDMENTS TO THE ELECTRIC UTILITY RESTRUCTURING ACT

A. Renewable Energy

The Consumer Advisory Board received presentations relating to the issue of renewable energy from (i) the Southern Environmental Law Center, (ii) Atlantis Energy, Inc./Solar Building Systems, (iii) MDV-SEIA, (iv) BP-Solarex, and (v) Old Mill Power Company. Written comments were also submitted by Ogden Energy Systems.

Specific statutory language for the implementation of proposals were presented to the Consumer Advisory Board by:

• The SELC, which would establish a public benefits fund, financed by a one-half mill per kWh charge on electricity consumption, to fund programs to support renewable energy resources, energy efficiency, and low-income weatherization; and
• MDV-SEIA, which would require the establishment of renewable energy portfolio standards that will establish minimum percentages of the total electricity sold that must be derived from renewable energy systems. The MDV-SEIA also proposed a public benefits fund, financed by a one-half mill per kWh charge on electricity consumption, that is similar to the proposal offered by the SELC.

The Consumer Advisory Board took no action with respect to these proposals. The groups who addressed the Board were advised to present their recommended legislative amendments to the Electric Utility Restructuring Act to this meeting of Task Force. The Board intends to take up the issue of the proposed amendments relating to renewable energy at its next meeting, and to provide this Task Force with the Consumer Advisory Board's reaction at your next meeting.

B. Low-Income Energy Assistance

The Consumer Advisory Board debated at length a variety of issues relating to the development of a low-income household energy assistance program. Among the issues with which the Board wrestled were:

• Whether any energy assistance program should be funded by a public benefits charge on electrical service, by a charge levied on electricity and other energy sources on a energy-equivalent basis, or by general fund appropriations;
• Whether an energy assistance program should provide assistance with needs of low-income households regardless of energy source, or seek to ensure a basic level of affordable electric service; and
• Whether the formulation of a comprehensive approach to the energy needs of low-income Virginians is necessarily tied to the introduction of competition into electric utility services.

The Consumer Advisory Board ultimately recommended that the best course was to continue studying this complex issue for another year. In order to ensure that the Board has jurisdiction to look into related topics that may extend beyond issues relating to the Electric Utility Restructuring Act, it was recommended that the Task Force be asked to endorse the introduction of a study resolution in the 2000 Session of the General Assembly, in the form provided.

PART III: OTHER ISSUES

At the last meeting of this Task Force on November 9, the Board noted in its report that a member of the Board wished to bring to your attention his concern that some study should be conducted evaluating the likely impact of deregulation on the price of electrical generation that various classes of consumers, especially residential and small business consumers, will likely have to pay after the capped rate period.

A copy of the statement of Jack Greenhalgh elaborating on his concerns is attached. The basic element raised is that additional study is needed to determine how the aggregation process can be effectively implemented. Mr. Greenhalgh's concerns are submitted in order that this Task Force may, in its discretion, look into these concerns or ask another entity to do so.