Public Utilities Generating or Distributing Electricity in Virginia

Government-Owned Utilities

Manassas built a small dam on the Occoquan River to provide electricity to the rural town, after the utility in Alexandria refused to extend its lines to serve such a distant area. Today, sprawl has incorporated Manassas into Northern Virginia's megalopolis - but the city still owns the distribution facilities to provide power to residents. The city purchases power at wholesale rates, and the pricing system is designed to discourage high demand for short periods of time. Coal and nuclear generating plants run more efficiently when producing power at a steady rate, so the price for "base load" power is set relatively low compared to the cost for "peak rates" of high, but short, demand.

The city now uses a series of gas turbines to generate its own power at times of peak demand, typically on hot summer afternoons. The gas generators are expensive to operate, but they run only for short periods of time. The cost for the capital investment and operations of the gas turbines is still cheaper than paying a higher base rate throughout the year to the primary supplier (Dominion).

Cooperatives

The co-ops are private businesses (not "public power") that were created by customers in rural areas. In the 1920's and 1930's, the rural areas were unable to get electricity lines built to their farms and small towns while major utilities were busy creating infrastructure to serve the denser population areas. During the Great Depression, the new federal Rural Electrification Administration offered low-cost loans to such customers. That allowed member-owned cooperatives to finance building the power lines and other infrastructure, while the private sector companies built facilities to supply the population centers (where they could make a better profit).

The co-ops obtain much of the power they distribute through contracts with other companies, particularly the Dominion Generation subsidiary of Dominion Power. (NOTE: The power companies have various subsidiaries - you may still see "Virginia Power" on the utility trucks for the distribution arm of Dominion Power, until they are repainted to read "Dominion Virginia Power.")

The Old Dominion Power Cooperative supplies an alliance of 12 co-ops in Virginia. Co-ops still serve small geographic areas, reflecting their community roots, but this alliance consolidates both buying power and political influence.

Co-op service areas

A good indicator of the rural nature of the co-op service areas is that Old Dominion serves 10% of the state's population, but about one-third of the state in area. At the national level, the ratio is about the same, with 30 million co-op customers in one-third of the United States. There is a co-op serving customers in 80% of the counties in the country. A large majority of elected officials represent constituents that benefit from co-op access to low-cost Federal financing.

The need for government support of rural electrification may have changed since the economics of the Depression. Some once-rural regions, especially Northern Virginia, are now densely-settled. However, the growth in customers and voters, and the conversion of some co-op service areas from rural farmland to suburbia, did not result in a downsizing of low-cost Federal loans to support the "needy" co-ops. Even after deregulation of electricity, it is unlikely that investor-owned (i.e., private) distribution systems will be extended into member-owned service districts. Instead, those companies selling power (rather than distributing it) may see the first benefits from increased competition.

The Old Dominion Electric Cooperative generates about 50% of the power required by 12 associated cooperatives that distribute it. ODEC owns 50% of the Clover coal-fired plant in Halifax County and 11.6% of the South Anna nuclear plant in Louisa County. Both are base-load plants, providing slightly over half the power required by the co-ops. In addition, the cooperative has invested in several plants fueled by natural gas.