Alice here from Staunton. Virginia's retail choice program has been expanding and I'm seeing more competitive suppliers targeting my commercial clients. Currently analyzing whether to recommend switching a large office complex from Dominion Energy's default service rate Schedule GS-3 to a competitive supplier offering 8.5¢/kWh fixed for 24 months. Dominion's current generation rate is around 7.8¢/kWh but it's variable. The client uses about 500,000 kWh annually. What factors should I be weighing beyond just the headline rate? This is my first deep dive into Virginia's choice program.
Dominion Energy Virginia Default Service vs Competitive Supply Analysis
Alice, Randy from Memphis here. First thing to check is whether that 8.5¢ rate includes all the same components as Dominion's default rate. Look for transmission charges, capacity costs, renewable energy charges, and any monthly service fees that might not be in the headline price. Also verify the supplier is licensed with the Virginia SCC and check their complaint history. A 0.7¢ premium for rate certainty isn't unreasonable but make sure you're comparing apples to apples.
Alice, I've worked with Virginia choice accounts in Duke Energy territory down in southern Virginia. Randy's advice is spot on about the rate comparison. Also check the contract termination terms carefully. Some suppliers have hefty early termination fees that can wipe out savings if the client needs to exit early. For a 500k kWh account, even small fee differences add up quickly.
Alice, from my experience with competitive markets in other states, don't forget to factor in Dominion's fuel adjustment clause volatility. If natural gas prices spike, that 7.8¢ default rate could jump significantly. The question is whether 24 months of price certainty at 8.5¢ is worth the premium given current market conditions and your client's risk tolerance.
Alice, I'd also recommend getting a detailed breakdown of the supplier's rate structure. Here in Ohio with FirstEnergy territory, some competitive suppliers quote low generation rates but then add transmission and ancillary service charges that weren't clearly disclosed. Ask for a sample bill showing exactly what charges will appear and how they'll be calculated.
Thanks everyone for the great advice. I requested the detailed rate breakdown from the supplier and found several issues. They were excluding PJM capacity charges ($2.50/kW-month) and RPS compliance costs from their headline rate. When I added these back in, their effective rate was closer to 9.2¢/kWh. I've advised the client to stick with Dominion default service for now and revisit when we get better competitive options.
Smart analysis Alice. Those PJM capacity charges are killers and suppliers love to hide them in the fine print. 9.2¢ vs 7.8¢ variable doesn't make sense for most commercial clients unless they have very specific budget certainty requirements. You saved your client from a costly mistake.
Alice, excellent work on the detailed analysis. This is exactly why commercial customers need professional auditors reviewing these competitive offers. The suppliers are getting very sophisticated with their marketing but the hidden costs are still there if you know where to look. Keep us posted on future Virginia opportunities you evaluate.
Alice, your experience mirrors what I've seen in other PJM states. The capacity market costs have been climbing and suppliers either hide them or pass them through at retail rates higher than what the utility pays wholesale. Always dig into those PJM cost components when evaluating competitive offers in mid-Atlantic markets.
Great thread Alice. We don't have retail choice in Oklahoma but I follow these discussions to understand market dynamics. It sounds like Virginia suppliers are using similar tactics to what I've heard about in Texas and Pennsylvania - low headline rates with hidden adders that show up in the fine print.
Alice, I'm new to the forum but wanted to thank you for sharing this analysis. I'm working on similar competitive evaluations in Arkansas where we're seeing early discussions about retail choice. Your methodology for breaking down all the cost components is exactly what I'll need when our market opens up.
Alice, just wanted to circle back on this thread. Have you seen any improvement in competitive offers in Virginia since your original analysis? I'm curious if suppliers have gotten more transparent with their pricing or if it's still a minefield of hidden charges for commercial customers.