Americans across the country have learned to simply accept their utility rates, opting to try and change their own behaviors rather than demand that their provider lower the bill. For many of us, we don’t actually have the freedom to decide who provides our electricity or where it comes from. In most states, utility companies offer an entire package of electricity services and wield monopolistic power as the only provider of energy in an entire state or geographic region..
Energy choice is the ability for consumers to make their own decisions about which companies they buy their electricity from and how that energy is generated. In the past, electricity was what economists call a natural monopoly because extremely high equipment costs kept new producers out of the market, and the average cost of providing electricity decreased with every new customer of a given established provider. Today, however, new technologies have yielded new methods of generating electricity, and the only remaining barriers keeping those technologies out of the market are the monopoly-based regulations still lingering from the invention of the steam engine. Americans deserve the liberty to make their own informed choices about the sources and costs of their electricity, especially in the face of an accelerating climate crisis and continued environmental degradation from fossil fuel extraction.
Virginia and Dominion Energy
In Virginia, the primary utility monopoly is Dominion Energy, which provides electricity to over seven million of the state’s 8.5 million residents. Each year, Dominion spends billions upon billions of ratepayer dollars to fund energy infrastructure projects that, by Virginia’s own laws, will be futile in 20 years or less after the end of construction.
In April of 2020, Virginia state representatives passed the Virginia Clean Economy Act, which established new renewable energy portfolio standards. These standards require the state’s electric grid to be entirely carbon-free by the year 2045. Despite this mandate, Dominion Energy continues to abuse its monopoly to sponsor nonrenewable energy infrastructure projects and leave Virginia ratepayers to foot the bill.
In 2014, Dominion Energy, along with North Carolina’s Duke Energy, announced it would start construction of a natural gas pipeline spanning from West Virginia through Virginia and down to North Carolina. The pipeline was named the Atlantic Coast Pipeline, and construction was set to begin in 2017 and cost $5.1 billion. However, issues quickly befell the project as Dominion became increasingly tied up in litigation having to do with the pipeline’s path, which crossed through several protected wildlife areas, including the George Washington National Forest and Blue Ridge Parkway. Throughout legal battles over the pipeline, Virginian protesters showed up in droves outside courthouses to express their opposition to the project.
What is so wrong with pipeline projects, you may ask? In the United States, since 1986, there have been more than 8,000 pipeline incidents, including spills, contaminations, injuries, and deaths. These incidents have resulted in more than 500 deaths, over 2,300 injuries, and nearly $7 billion in damages. In addition to human detriment, pipeline construction and incidents have, unsurprisingly, been proven to harm biodiversity and ecosystem functions, not to mention that additional pipeline construction continues to enable a fossil fuel-dependent society and further contributes to the climate crisis. A major issue with pipeline projects is not just that these problems exist, but exactly who is being forced to reckon with them.
Environmental activists were joined by racial justice advocates after it became clear that Dominion Energy had blatantly ignored and subverted environmental justice requirements by intentionally misrepresenting the demographics of pipeline-affected communities. Such was the case in Union Hill, Virginia in 2019, when Dominion reported that “no environmental justice community” would be “disproportionately impacted” by their Atlantic Coast Pipeline construction despite only 17 percent of the population of Union Hill, the proposed site of a compressor station, identifying as White.
After years of lawsuits and protests from environmental health and justice activists, the Atlantic Coast Pipeline was ultimately canceled in July of 2020, but not before costing upwards of $8 billion, wasting 31 miles of pipeline, causing 83 miles worth of deforestation, and the labor of countless Virginians who had to protect their own communities when their government failed to do so.
In Virginia, the State Corporation Commission (SCC) has regulatory authority over the commonwealth’s utility companies, but it struggles to control the large companies who actively resist regulation. Since 2017, the SCC has estimated that Dominion Energy has earned $500 million above the legally permitted fair-profit margin for electric monopolies. Because there is no competition to drive rates down, and no other providers for Virginians to turn to, they are stuck paying illegal, rent-seeking rates set by Dominion.
The current state of Virginia’s energy market places the burden of protecting their local environment and communities from the harmful effects of natural gas pipelines, and disproportionately impacts the most vulnerable and marginalized communities of the Commonwealth. Dominion will continue to manipulate and break regulations, leaving activists and the courts responsible for holding the corporation accountable to the people of Virginia.
Moving Forward: The Virginia Energy Reform Act
The Virginia Energy Reform Act is a bipartisan bill that strives to invite competition-driven innovation to the energy market and check the power of rent-seeking, state-sponsored monopolies like Dominion. In place of a state-sponsored monopoly, the Commonwealth can introduce clean energy utility companies that give citizens the option to choose the source of their energy and their utility rates. In an increasingly politically divided state, this bill’s bipartisan support in the form of the Virginia Energy Reform Coalition will ensure that constituents from all over the commonwealth will agree on this much-needed infrastructure update.
If Virginians have any hope of achieving 100 percent carbon-free energy by 2045, lawmakers must immediately begin making serious investments in renewable energy infrastructure. Despite apprehension about the cost of these investments, the benefits of decarbonizing the state’s electricity grid greatly outweigh the cost of continuing to rely on a system that’s burdening consumers with high energy costs and fueling a climate crisis. Taking action today saves billions in future damages and costs from the climate crisis. Additionally, this legislation promotes improvements to environmental impact and equity by reducing pollution, which disproportionately burdens marginalized communities.
Virginians, and all Americans, deserve the right to choose clean energy and break free from the captivity of state-backed monopolies that this act would provide.