The Southern Environmental Law Center submits the following responses to the questionnaire prepared by the Consumer, Environment and Education Task Force of the SJR 91 Joint Subcommittee.

These responses should be viewed against the backdrop of our general support for electric utility restructuring, as well as the comments and remarks we have previously presented on the tremendous current and potential environmental impacts of electric power production. SELC believes that restructuring can produce economic, health, and environmental benefits. However, unless done properly, restructuring will harm our environment, our health, and our pocketbooks.

This task force has broad responsibility to develop environmental and consumer protection recommendations. In addition to the recommendations suggested below, we believe that a guiding principle of restructuring should be that it not be undertaken unless it protects consumers, provides environmental benefits, and does not result in increased pollution.

Public Benefits Charges

In light of the first question and the follow-up nature of the other questions in this section, we have geared our responses in this section to low income programs, although we support public benefits charges for a broader range of programs (see below).

As part of implementing electric utility restructuring in Virginia, should the General Assembly establish any rate subsidy and/or energy efficiency assistance programs for low-income households?

Yes. The General Assembly should provide funding for a statewide electric service payment assistance program and an energy efficiency assistance program for low-income households. Low-income households spend a disproportionate amount of their resources on electricity, and need payment assistance; investments in energy efficiency enable these customers to reduce their electric bills by installing equipment that provides essential services while using far less electricity.

How should any such program(s) be structured in terms of eligibility?

Eligibility for assistance may vary depending upon the purpose of the public benefits funding. The criteria for eligibility for low income energy efficiency programs, for example, could be borrowed from criteria for current weatherization program.

How should any such program(s) be funded?

These programs should be funded by a non-bypassable, competitively neutral charge on all users of the retail electric system.

How should any such program(s) be administered?

SELC does not have a position on the implementation of a payment assistance fund. The low income efficiency fund should be administered by an independent entity as part of a more broad public benefits fund for energy efficiency, and existing mechanisms for similar programs (such as weatherization) should be used as much as practicable.

Are there any programs that could or should serve as an alternative or supplement to any such programs? If so, describe.

Supplemental federal and private funds may be available for these programs.
Please identify any other issue(s) falling under this topic you believe are important, and provide comments on that issue.

SELC does not wish to comment on any other issue under this topic at this time.

Consumer Education

What should be the general purpose of any consumer education program preceding and accompanying Virginia's transition to retail competition?

Consumer education should have three purposes: 1) to inform consumers about retail competition and what it entails; 2) to educate consumers about how to shop for electricity and about what consumer protections are available; 3) to provide information on how to use electricity efficiently and in an environmentally sound manner.
When should these programs be conducted?

These programs should be conducted in advance of the advent of retail competition, during the transition to competition, and for at least a reasonable period of time after competition begins.

Who, if anyone, should have regulatory oversight over such programs?

The State Corporation Commission should oversee these programs, though implementation of the programs may best be performed by contractors such as non-profit organizations.

Which state regulatory agencies, if any, should participate in this program, and in what capacity?

In addition to the State Corporation Commission, agencies with consumer expertise and contacts, and the Department of Mines, Minerals, and Energy should participate.

How should such programs be funded?

These programs should be funded by a non-bypassable, competitively neutral charge on all users of the retail electric system.

Should any long-term consumer education program be established, to continue after the transition to retail competition is completed? If so, describe its scope, oversight and funding.

Yes. The need for consumer education will continue after the advent of retail competition, although to a lesser extent. Education programs will be bolstered considerably if the General Assembly requires clear and uniform disclosure of prices, terms, fuel mix and emissions by electricity suppliers. Long-term consumer education programs should be overseen and funded in the same manner as described above.

Please identify any other issue(s) falling under this topic you believe are important, and provide comments on that issue.

SELC does not wish to comment on any other issue under this topic at this time.

Customer Aggregation

Should customer aggregation be permitted in Virginia in conjunction with restructuring?

Yes; aggregation should be permitted and encouraged. It is essential to increase consumer buying power and to give residential and small commercial customers a reasonable opportunity to benefit from restructuring.
Should aggregators be subject to mandatory licensing by any regulatory authority, or be required to furnish evidence of financial soundness?

Yes. Aggregators should be subject to mandatory licensing by the SCC and be required to furnish evidence of financial soundness.

Should aggregators be subject to any other requirements? If so, describe them.

Aside from basic consumer protections, aggregators should not be subject to any other requirements that we are aware of at this time.

Should localities (counties, cities or towns) be permitted to aggregate their residential load?

Yes.

Should localities be permitted to aggregate their residential load on an "opt out" basis?

Yes; otherwise, localities may not serve as aggregators, possibly depriving consumers of their best opportunity to combine their load to bargain for lower electric rates. The recent Massachusetts legislation contains provisions which could be used as a model for this approach.
Should localities be permitted to form inter-locality aggregates?

Yes. Localities need to be able to join together to pool a larger number of customers, since this will increase their bargaining power and may enable them to present a more attractive load profile.

Should localities be permitted to aggregate load with private entities outside their territorial jurisdiction?

Yes. Localities should be given broad authority to act as aggregators to increase their bargaining power. Of course, they should not be permitted to aggregate load outside their territorial jurisdiction on an "opt out" basis.

Should localities be permitted to aggregate load with private entities or localities outside of Virginia?

SELC does not have a position on this question at this time.

Please identify any other issue(s) falling under this topic you believe are important, and provide comments on that issue.

SELC does not wish to comment on any other issue under this topic at this time.

Consumer Protection

Should electric service providers and aggregators be required to disclose standard information in their marketing materials, and in their proposals and contracts for service? If so, what basic information should be provided?

Yes. Consumer choice is meaningless without adequate information. Providers and aggregators should be required to disclose information in a clear, consistent format in all marketing materials. Among other things, this information should include the price and terms of electricity service offered as well as information on the supplier's fuel mix and the emissions resulting from the power offered.

Should any kinds of marketing practices by electric service providers or aggregators be specifically prohibited? If so, what practices should be barred?

Yes. Certain marketing practices should be specifically prohibited, such as unfair and deceptive advertising, including misrepresentations of providing "green" power.

Should Virginia restructuring legislation establish limits on the size of utility service deposits that may be required by electric service providers and aggregators? If so, what limits should be established?

SELC does not have a position on this issue at this time.

What kinds of standard information should electric bills contain after restructuring? If so, what information should each bill be required to provide?

Consumer choice is meaningless without adequate information. Electric bills should contain standard information in a clear, consistent, easily-understandable format. The separate charges for various unbundled services, contract terms and conditions, the supplier's fuel mix, and the emissions resulting from the power provided should be shown.

Should Virginians be given any statutory rights to cancel utility service contracts with electric service providers or aggregators within a specified number of days following acceptance? If so, what special rights of recission or cancellation should be provided in statute?

SELC does not have a position on this issue at this time.

Should Virginians be given any statutory protection against unauthorized switching of electric service providers, or "slamming?" If so, what anti-slamming protections should be adopted?

Consumers should be protected against unauthorized switching or slamming. SELC does not have a position at this time on the specific content of such protection.

Should Virginians be given any statutory protection against any electric service provider or aggregator telemarketing practices? If so, what?

Consumers should be protected against unfair and deceptive advertising, marketing and business practices.

Should consumers be furnished assistance by any state regulatory agencies in resolving complaints against electric service providers or aggregators? If so, which agencies should be involved, and what should their responsibilities include?

Consumers complaint resolution services are needed and should be provided by the state. SELC does not have a position at this time on the agencies that should provide this assistance or on their specific responsibilities.

Please identify any other issue(s) falling under this topic you believe are important, and provide comments on that issue.

Adequate protection also must be given to protect customer privacy.

Environmental Protection

Should Virginia restructuring legislation in any way promote or encourage the use of renewable energy in the generation of electricity? If so, how?

Yes. Renewable energy offers a number of important public benefits, including reduced air pollution, economic development, fuel diversity, and system reliability benefits. In addition, consumers have indicated a strong desire to be able to choose cleaner power sources. Restructuring should promote and encourage renewable energy use in three primary ways: 1) by creating a Public Benefits Fund for renewable energy development and commercialization to help overcome market barriers to these valuable resources; this would be a funded by a non-bypassable, competitively neutral charge on all users of the retail electric system, which would be administered by an independent non-profit entity; 2) by requiring disclosure of electricity suppliers' fuel mix and emissions profile so customers can choose providers using a higher percentage of renewable resources; 3) by adopting a renewable portfolio standard, which would require a certain percentage of the power offered for sale by each retail electric supplier to be generated form renewable resources. In addition the General Assembly should consider adopting a net metering provision to allow customers to receive credit for electricity they generate in excess of their usage.

Should Virginia restructuring legislation in any way address air quality, directly or indirectly? If so, in what way?

Yes. Although some potential adverse air quality impacts of restructuring are best addressed at the federal level, Virginia should adopt the approach taken by Pennsylvania, and endorse changes to federal clean air laws to apply equal emissions standards to all electricity generators so the market is not skewed in favor of older, dirtier plants. In addition, aggregation measures, measures requiring suppliers to disclose their fuel mix and emissions in marketing materials and in bills, and measures to promote energy efficiency and renewable energy all can benefit air quality.

Should Virginia restructuring legislation require electric service providers or aggregators to disclose generation fuels? If so, how should this requirement be implemented and administered?

Providers and aggregators should be required to disclose the mix of generation fuels, as well as resulting emissions. Consumer choice is meaningless without adequate information. All marketing materials and electric bills should contain standard information in a clear, consistent, easily-understandable format to enable consumers to comparison shop among competing suppliers and to act upon the desire many have expressed to choose cleaner sources of power. Numerous states that have moved to restructure their electric utility industry have adopted such a requirement and provide models for implementing and administering disclosure.

Please identify any other issue(s) falling under this topic you believe are important, and provide comments on that issue.

There are a number of other issues, such as market power and stranded cost issues, within the purview of other task forces which will impact the ability of renewable energy resources to compete in a restructured electric industry. This task force should highlight the environmental implications of issues before other task forces.

Energy Efficiency
Should Virginia restructuring legislation in any way promote or encourage energy conservation or energy efficiency, e.g., encouraging installation of energy efficient equipment or energy efficiency monitoring equipment? If so, what incentives should the legislation include?

Restructuring legislation should promote the installation of energy conservation and energy efficiency measures because these are the best tools consumers -- particularly low income, elderly, and rural consumers -- have for controlling their electric bill. Energy conservation and efficiency offers a number of other significant public benefits, including reduced air pollution, economic development, fuel diversity, and system reliability benefits. Restructuring should promote and encourage energy efficiency by creating a Public Benefits Fund for energy efficiency investments to help overcome market barriers to these valuable resources, particularly programs to help ensure that electricity remains affordable to the most vulnerable customers. Most states that have moved to restructure their electric industry have created such a fund. It should be funded by a non-bypassable, competitively neutral charge on all users of the retail electric system, and it should be administered by an independent non-profit entity.
Should Virginia restructuring legislation establish a public benefits charge for the purpose of encouraging research and development in the areas of energy conservation and efficiency? If so, how should it be assessed and administered?
In addition to funding installation of energy conservation and energy efficiency measures, funding from a public benefits fund should also go to encourage research and development of energy efficient technology. Some states have pooled such funding to leverage their investment in technology development.
Please identify any other issue(s) falling under this topic you believe are important, and provide comments on that issue.
As mentioned above, one of the purposes of consumer education should be to inform customers about how to use electricity efficiently.

Electric Utility Worker Protection
Should Virginia's electric utility workers be given any statutory protections in conjunction with the transition to a retail competition? If so, what protections should be provided, and through what mechanism?
SELC has no position on this issue at this time.

If any statutory protections for utility workers result in additional costs or expense, how should they be funded?
SELC has no position on this issue at this time.

Should providers of electric energy in a restructured market be required to maintain minimum staffing levels for purposes of reliability? If so, who should determine these levels, and what standards should be applied in doing so?

SELC has no position on this issue at this time.

Should the purchaser of any generation unit or station sold after restructuring, be required to (I) hire or continue the employment of such unit or station's employees, and (ii) furnish such employees the same wages, working conditions and benefits and terms and conditions of employment that were in effect prior to the sale?
SELC has no position on this issue at this time.
Should new entrants into Virginia's electricity market following restructuring be required to comply with any requirements concerning the qualifications of their electrical workers with regard to quality, safety and reliability of service? If so, who would establish such requirements.

SELC has no position on this issue at this time.
Should Virginia, in conjunction with restructuring, establish mandatory training and skill standards for all electrical workers responsible for systems and equipment that affect system reliability and safety?

SELC has no position on this issue at this time. Please identify any other issue(s) falling under this topic you believe are important, and provide comments on that issue.

SELC has no further issues under this topic at this time.