Lawmakers in Missouri, Virginia Hit the Brakes on Retail Choice

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On the heels of the recent Florida Supreme Court decision in Florida striking the proposed retail choice constitutional amendment from this year’s ballot – Lawmakers in Virginia and Missouri have also put the brakes on electric retail (deregulation) choice.   

In Virginia – and after proponents heralded the introduction of retail choice legislation in the House of Delegates – the Old Dominion’s State Senate seriously downgraded the possibility of deregulation legislation moving onto Governor Northam’s desk this year. On January 29, the State Senate’s Labor and Commerce Committee’s Subcommittee on Energy voted down a proposal (SB 379) by Jeremy McPike (D-VA) to expand further the state’s very limited retail choice structure. In voicing his opposition to the measure Virginia Senator Tommy Norment (R-VA) said “There is no way you will persuade me that there is not going to be a cost-shift on this.”  

Senator Norment is right because — as we pointed out last month – Virginia’s neighbors with fully deregulated electric markets (MD, DC) have higher retail rates than the Old Dominion while its four neighbors with fully regulated markets (TN, KY, WV, NC) have lower rates.  

The reality of increased rates in a deregulated retail electric market also led to the defeat of a proposed constitutional amendment in a Missouri Senate Committee — just one day after choice proponents suffered their defeat in Virginia. The defeat of Senate Joint Resolution 34 is an interesting tale of what retail choice proponents will do to achieve their goal of higher rates and less reliability for the consumer. 

 SJR 34 is sponsored by Senator Doug Libla (R-MO) — Chairman of the Transportation, Infrastructure and Public Safety Committee. Senator Libla moved his legislation to his own committee after the proper committee of jurisdiction – Committee on Commerce, Consumer Protection, Energy and the Environment – declined to consider his legislation. Even with SJR 34 in a favorable environment – Chairman Libla’s committee failed to approve the legislation on a tie vote.

In voting down Senator Libla’s retail choice constitutional amendment Senators on his committee realize – as other state legislators have to come realize in their states – there’s no point in subjecting their constituents to an unknown, new electric rate structure when rates are already the fifth lowest in the country according to the Energy Information Administration (EIA).

Coupled with the Florida Supreme Court’s decision to prohibit proposed language from appearing on this year’s ballot, the defeats of retail choice language in Virginia and Missouri brings the number of setbacks this unfriendly consumer policy has befallen it to three in January alone.    

As we noted last May when the retail choice discussion was in its infancy in Virginia,  “The record is clear…Electricity deregulation not only raises electric rates and threatens power supply reliability, but also exposes consumers to deceptive, predatory sales and marketing practices.”  

Through their actions last week, policy makers in Virginia and Missouri listened and acted to protect their constituents from the perils of retail choice.