Public Benefits Charges.

1. 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?

Virginia Power favors establishing an independent, statewide, non-profit heating assistance program, similar to the company's EnergyShare winter fuel assistance program. Funding for the program should be derived in part from the public benefits charge. Other sources of funding would include contributions from electricity suppliers and distribution companies and voluntary donations from customers.

The program would provide last resort heating assistance, available not only to low-income consumers but also to those facing a financial crisis after exhausting other means of support. Funds should be available for electricity, natural gas, fuel oil, kerosene, wood, or whatever means recipients use to heat their homes.

The state should also develop an expanded weatherization program to help low-income Virginians make energy-saving home improvements such as insulation and storm windows. Both the energy efficiency and weatherization programs should be supported by revenues from the public benefits charge assessed on all consumers of electricity.

With these other assistance programs in place, Virginia Power does not believe establishing a separate low income household rate is necessary.

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

Depending on what programs are selected, the appropriate agencies should develop eligibility requirements with public input.

3. How should any such program(s) be funded?

Funding for the heating assistance and the low-income weatherization projects will be derived from the public benefits charge. Other sources of funding may include voluntary customer contributions and contributions from suppliers and distribution companies.

Generally, the nonbypassable public benefits charge should be used to provide funding for public benefits programs, including universal service, consumer education, energy efficiency, renewable energy, and worker retraining and outplacement programs, in addition to the assistance programs cited above. These projects may last beyond the transition period.

4. How should any such program(s) be administered?

Energy payment assistance, energy efficiency, and weatherization programs should be administered by appropriate state and local public assistance agencies. Additionally, non-profit organizations should be used to the greatest extent possible to reach as many consumers as possible.

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

A statewide voluntary program modeled on Virginia Power's EnergyShare program could serve as a supplement to energy assistance programs supported through nonbypassable public benefit charge.

6. Please identify any other issue(s) falling under this topic you believe are important, and

provide comments on that issue.

Consumer Education.

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

Consumers, who have no experience shopping for electricity, need to be well informed, in advance and on a continuing basis, about changes in the way they may purchase electric energy services. Consumer education also should include information on using electric energy safely, efficiently, and in an environmentally sound manner. The program should also inform customers about the rights and protections they would be afforded under such a system.

8. When should these programs be conducted?

Consumers, who have no experience "shopping for electricity," need to be well informed, in advance and on an on-going basis, about changes in the way they may purchase electric energy services. Consumer education should begin by July 1, 1999, giving customers adequate lead time to learn about competition before its arrival.

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

The SCC should be the principal agency that contracts with other state governmental agencies and appropriate private non-profit organizations and other media, educational, and consumer organizations to implement such public information campaigns.

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

State agencies should include, but not be limited to, the State Corporation Commission, Virginia Department of Aging, and Department of Social Services.

11. How should such programs be funded?

These educational programs should be funded by a nonbypassable public benefits charge determined by the General Assembly with input from the SCC and imposed on all purchasers of electric energy. The programs should be carried out by sources independent of utilities and others supplying electricity.

12. 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, an ongoing consumer education program should include information on using electric energy safely, efficiently, and in an environmentally sound manner. Ombudsman, similar to these in other programs, should be available to help customers resolving disputes or problems.

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

The SCC should contract with appropriate private non-profit organizations and media, educational, and other organizations experienced in consumer education and outreach to implement such consumer education programs.

Customer Aggregation.

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

Yes, we support giving consumers (especially residential customers and small businesses) the right to aggregate, or join together to increase their "buying power" in the marketplace. Aggregation requirements should be as flexible as possible.

15. Should aggregators be subject to mandatory licensing by any regulatory authority, or be required to furnish evidence of financial soundness?

If aggregators are also suppliers they should be required to obtain licenses from the SCC and should have to demonstrate their financial strength. Other aggregators should be subject to appropriate licensing standards.

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

If aggregators are also suppliers they should be required to demonstrate their ability to deliver reliable and efficient service, including the maintenance of an adequate reserve margin. Substantial penalties should be imposed on suppliers who fail to maintain these standards.

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

Yes

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

No. All aggregators willing to serve groups of customers should have equal access to them to enhance competition. Customers must make an affirmative decision to join an aggregation and should not be automatically included in an aggregation made by their local government. Customers should have the ability to make choices on an opt/out or opt/in basis depending on whether a municipality already offers electric service.

19. Should localities be permitted to form inter-locality aggregates?

Yes

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

This should be studied carefully from a tax equity standpoint.

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

No

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

The non-jurisdictional status of government customers may need to be reexamined in light of restructuring. Also, local government aggregation should not grant them any preferential treatment. Rather, they should be equal to other aggregators.

Consumer protection.

23. 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?

Any material providing information on rates and charges should follow the same uniform, informative and easy-to-understand format to be developed for customer bills. If suppliers discuss environmental matters in their marketing material, they also must present their fuel mix and emissions data in the same format as that used in customer bills.

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

The bill should provide consumers with some protection against intrusive and abusive telemarketing. The legislation should reiterate prohibitions against fraudulent and deceptive advertising. These provisions would reinforce the consumer protection laws already banning dishonest practices. Clear provisions to prohibit "slamming," the unauthorized switch of suppliers, should be in the bill, along with stiff penalties for their violation. The bill should require that all contracts be made in writing and not simply over the telephone, and contain a provision that customers have at least three days to five days in which to change their minds. The bill should also contain a standard of conduct for suppliers placing more explicit restrictions on marketing behavior.

25. 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?

Under the new system, charges for service deposits levied by distribution companies will continue to be regulated by the State Corporation Commission. We do not believe a legislatively determined limit on deposits for suppliers or aggregators is appropriate. In fact, a competitive market will act as a brake on such charges and likely drive them down.

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

Bills should use a uniform, informative and customer-friendly format. The charges for unbundled services and any taxes included in the bill should be clearly presented. The bill also should provide clear information about the nonbypassable wires charge, including a breakdown of the charge's components. Additionally, the bill should provide information about the supplier's fuel mix and the resulting emissions from power generation.

27. 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 rescission or cancellation should be provided in statute?

Virginians should be given some statutory protection enabling them to reverse their decisions within a reasonable period of time. If the contract contains a specified term of service, the law should provide at least a three to five day period for reversing the acceptance.

28. 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?

The statute should include strong measures to protect Virginians against "slamming," a practice which has tainted other competitive service markets. Suppliers should be prohibited from reassigning customers to other companies without the customers' consent. The bill should include provisions that contracts must be made in writing, not over the telephone, and that the customer should have at least three days to revoke the contract after its acceptance.

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

The law should protect Virginians from unreasonably intrusive telemarketing tactics by designating when such practices can take place. It should reiterate the customer's right to be removed from a telemarketing list if he or she requests it. Just as it would prohibit misrepresentation in any marketing materials, the law should provide stiff penalties for false or misleading claims made during telemarketing sessions.

30. 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?

In the restructured system, the SCC would continue to receive and investigate customer complaints against regulated distribution companies. Under existing state law, complaints against competitive service suppliers could be directed to the Department of Agriculture and Consumer Services or the Office of the Attorney General. Because we believe the SCC should license electric suppliers, it may also be appropriate for customers to present complaints against suppliers directly to the Commission. It may be appropriate to designate a specific state agency as a single point of contact for this purpose.

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

The bill should create an advisory committee of stakeholder representatives appointed by the governor to monitor the transition. This Customer Advisory Committee or Board would help in consumer education, consumer issues and/or problems, and report annually to the Legislative Transition Task Force.

Environmental Protection.

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

Restructuring legislation should contain programs and incentives to encourage the use of renewables. Research, development and demonstration of renewable technologies should be supported by funds collected via a nonbypassable public benefits charge.

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

Restructuring legislation at the state level does not need to address air quality directly as all existing federal and state environmental laws and regulations will continue to apply and all generators must remain in compliance in order to operate without fines and penalties. Future air quality issues associated with restructuring can be addressed if necessary at the federal level, consistent with the inter-state nature of competition and the competitive generation market.

Restructuring legislation should offer the opportunity to improve air quality indirectly by providing programs to encourage conservation and the use of renewables which will reduce emissions and the need for additional generating capacity.

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

Yes. Generators and, to the extent feasible, suppliers and aggregators should be required to disclose information on their fuel mix and air emissions. Such disclosures should take the form of a monthly report of the percentage of each fuel that contributed to the production of power sold by the supplier or generator during the reporting period. This information should be provided in customer's bills and be available from marketers upon request if feasible.

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

False or misleading representations regarding "green power" should be prohibited and subject to sanctions.

Energy Efficiency.

36. 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?

Yes. The state should provide additional support for voluntary energy efficiency and conservation programs.

37. 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?

As stated in response to the question regarding renewable above, legislation should provide for collection of funds via a public benefits charge in the form of a nonbypassable wires charge for R&D and demonstration in areas of energy conservation and efficiency.

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

Electric Utility Worker Protection.

39. 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?

A well-trained and highly skilled workforce will be a crucial element of the success of a competitive market for electricity. Help for workers whose jobs are affected or eliminated during restructuring and to provide outplacement services for such workers should be provided.

40. If any statutory protections for utility workers result in additional costs or expense, how should they be funded?

A portion of the public benefits charge assessed on consumers of electricity should be used to provide funds for the worker assistance program.

41. 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?

Under the new structure, suppliers of electricity to customers will be obligated to provide power to their customers or face significant sanctions, including loss of license. This will provide a powerful incentive to suppliers to maintain operations, including staffing levels, adequate to serve their customers' needs. Also under the new structure, utilities serving as distribution companies will continue to be required to serve all customers within their assigned areas. This obligation will act as an incentive for the maintenance of adequate staffing levels. It should be noted that under the current statutory requirement to serve, no staffing levels are mandated.

42. 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?

Purchasers of any generation unit or station sold after restructuring should be encouraged to abide by any contract which has not yet expired. However, these are issues usually left to the entities involved in the transaction and should not be the subject of law.

43. 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.

New entrants should come under federal, state and industry standards and requirements now imposed on existing providers to ensure quality, safety and reliability.

44. 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?

The current high standards for the electric utility workforce and contractors should be maintained. In the interests of employee and public safety, as well as fair competition, employees and contractors of new entrants should be required to meet equally rigorous standards.

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