Overview of Public Power in Virginia: Transparency, Accountability, and Wholesale Contracts

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Public power in Virginia is characterized by accountability, transparency, and efficient service. Local government oversight ensures citizen input and approval in decision-making processes. Wholesale power supply contracts with entities like American Municipal Power and Dominion Virginia Power enable cities and towns to access reliable electricity. Factors impacting municipal electric rates, such as purchased power costs and transmission expenses, are managed to ensure affordable and sustainable service for customers.

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Municipal Electric Power Association of Virginia VML Annual Meeting October 2, 2018 Thomas Dick MEPAV Lobbyist

Public Power in the United States 1. 2000 public power systems, serving 14% of electric customers nationwide 2. Local government oversight directly accountable to its citizen- owners 3. Rates, generation investments, policies and procedures publicly discussed and approved 2

Electric Utility Customers in Virginia PERCENTAGE OF POPULATION SERVED 4.3 17.1 IOUs Co-ops Munis 78.6 3

Public Power in Virginia - Accountable and Transparent Subject to the Virginia Public Procurement Act, Freedom of Information Act and Conflict of Interests Act Public action by the local governing body to approve budgets and electric rates Local, advertised public hearings Responsive and timely action on issues raised by citizens and industry Excellent reliability - typically faster service outage restoration than neighboring utilities 4

Wholesale Power Supply Contracts Cities of Danville and Martinsville and the towns of Bedford, Front Royal and Richlands have long term contracts with American Municipal Power (AMP) for power from certain generation projects and the PJM energy market Tennessee Valley Authority (TVA) - power to BVUA through 2028 American Electric Power (APCO) - power to VA Tech through 2027 and to Radford and Salem through 2026 Dominion Virginia Power - power to the cities of Franklin, Manassas and HEC and the towns of Blackstone, Culpeper, Elkton and Wakefield through 2031 5

Factors Impacting Municipal Electric Rates Cost of purchased power by far the most significant part of rates around 75%. Determined by existing long term power contracts. Transmission expense VA municipals are transmission dependent utilities Municipals have no control over PJM transmission costs but work with like-minded organizations to protect our interests Power cost adjustments and fuel cost adjustments from wholesale providers typically flow thru automatically to retail customers 6

Ratemaking Local elected officials set the electric rates for 13 munis BVUA rates are set by the local Authority board members with TVA oversight Virginia Tech, a state agency, sets their own rates Harrisonburg Electric Commission empowered by city council to establish rates. Harrisonburg has the lowest residential rate in Virginia. The City of Manassas and Towns of Front Royal and Elkton have lower residential rates than 99% of the Commonwealth. 7

Previous legislative issues Obtained municipal exemption from deregulation and re-regulation provisions of the Electric Utility Regulation Act. Defeat of efforts to require SCC oversight of municipal electric utilities. Defeat of proposals mandating a renewable portfolio standard for municipal electric utilities. Obtained an exemption from certain wireless infrastructure requirements for attachments on municipal facilities. Defeated proposals to place restrictive contract provisions in the Code of Virginia. 8