Having just survived Winter Storm Fern, Virginians understand the importance of a reliable electric utility. The number of outages across the state was lower than many anticipated. Keeping the power on and getting it restored quickly is a testament to years of preparations by the electric company, first responders, lawmakers, energy regulators and local leaders.
This resiliency is also tied to the fact that in Virginia and other Southeastern states, utilities own the power plants, the transmission lines and the distribution system — and they operate under the oversight of state regulators. It’s a “regulated” electricity structure that is proven and accountable.
A winter storm is a good example of the benefits of traditional electric utility regulation. Before the first flake falls, Virginia’s power companies will have crews pre-staged, equipment positioned, and mutual aid workers on the way. Because they control the entire system, they can more effectively coordinate storm response.
This is the kind of practical reliability Virginians depend on when ice starts weighing down tree limbs.
But reliability is only half the story of sensible utility regulation. The other half is cost.
In 2024, residential customers in states that “deregulated” their electric markets paid about 42 percent more for electricity than customers in states with vertically integrated utilities. Indeed, eight of the ten most expensive states for electricity have competitive retail markets created through deregulation. In Illinois and other deregulated states, customers have paid billions more for electricity under retail choice programs than they would have under the traditional utility model.
Competition was supposed to lower energy costs. Instead, it has often raised them. This is because deregulation sidelines utility regulators and exposes customers to volatile energy markets that determine electricity prices.
Despite the downsides of electric deregulation, there are voices in Virginia that want to end the regulated model and push the commonwealth into a more market-based structure. This would essentially put out of state and unelected non-government officials — with no accountability to Virginians — in charge of how electricity is delivered.
In fact, in the General Assembly, there currently is legislation that would give an upper hand to commercial customers while shifting cost burdens to residential and small business customers. The legislation would allow customers to shop for electricity while removing existing regulatory safeguards that currently protect them.
In addition to exposing residential customers to shady retail suppliers that nearly always charge more for electricity than the incumbent regulated utility, it would take existing regulatory authority away from the State Corporation Commission. This regulatory authority currently protects residential and small business customers from cost increases they would experience from large commercial customers leaving the utility. In other words, by allowing large industrial customers to shirk their responsibility for maintaining the electric grid, it shifts those costs to the little guy.
Ultimately, letting large and small customers shop for electricity would mean higher — not lower — power bills for Virginia residents, schools, hospitals, fire departments and pretty much everyone in the commonwealth.
At the end of the day, the fundamental problem with deregulation is that electricity is not a normal consumer product. It requires massive, long-term investments in infrastructure that must operate reliably every hour of every day. That is why the regulated utility model was created in the first place.
As lawmakers in Richmond look for ways to help families facing rising costs, they will hear about proposals to deregulate the market or expand retail choice. But these ideas have been tested elsewhere, and they repeatedly fail to deliver lower prices or increase reliability.
The better question for lawmakers in Richmond is the simplest one: What approach benefits customers?
For Virginia, the answer is the model we already have. Regulated, vertically integrated utilities provide the reliability we count on during storms, the planning we need for the future, and the stable prices families can afford.
Brad Viator lives in Arlington and is the president of Power for Tomorrow, a pro-utility regulation group.