Consumers are protected

Published 9:41 am Friday, April 19, 2013

To the Editor:

Recently, Thomas H. Council, Jr. wrote a letter to the editor asking for help for consumer protection for the Franklin community regarding the City of Franklin’s provision of electric utility service. He also accused the Municipal Electric Power Association of Virginia (MEPAV) of legislative efforts that have left municipal electric consumers without consumer protections. He is incorrect.

There is state and federal regulatory oversight over municipal electric utilities. Among other things, the State enforces the provisions of the federal Clean Air Act and Clean Water Act that are applied to electric utility generation units owned and operated by municipalities. There are also federal reliability standards for electric utility operations that are enforced. All work on utility lines must be done in conformance with federal standards.

MEPAV strongly believes that consumer protection is greater when local governments provide local utility service. Generating profit for investors scattered around the world is not important to municipal electric utilities. While a high return on investment may be necessary for investor-owned electric utilities (lOUs), providing safe, reliable and affordable electric power is the driving motivation for local government-owned electric utilities. There are over 2,000 electric systems that are publicly owned in the country and since the late 1800s, the price of power from publicly owned electric utilities has been widely considered the benchmark for competitively priced electric power.

The national average price of electricity from investor-owned electric utilities for retail residential customers was S128.29 per 1000-kilowatt hours in July of 2012. All of the Commonwealth’s municipally owned electric utilities have rates well below this rate. Five of the six lowest residential rates in Virginia are from municipals. Eight of the state’s sixteen municipal electric systems have residential rates lower that Dominion Virginia Power, the state’s largest (and State Corporation Commission regulated) electric utility. Thirteen municipals, including the City of Franklin, have rates lower than the state’s second largest IOU, Appalachian Power

In a functioning democracy, there is local citizen control over local government services. It is quicker and more cost effective to contact local officials about local issues than to contact agencies of state government and expect a timely response and a thorough understanding of what is happening in your community. Most people do not want an additional and unnecessary layer of government to try to solve their problems. We believe any issues citizens have regarding local government services should continue to be dealt with at the local level.

Michael C Moon,
President of Municipal Electric Power Association of Virginia
Richmond, Virginia