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Rerras town-hall meetings detail electricity rate issue
April 4, 2007 - Eastern Shore News

Two gatherings on Saturday give senator audience for General Assembly overviews

By Stacia Childers

ONLEY -- Real-estate tax relief, fair electricity rates and alternative energy were the main topics of conversation at a town meeting held by state Sen. Nick Rerras here Saturday.

Rerras sponsored two of the meetings this weekend -- the first, held earlier that morning in Cape Charles, and said they went well, with an estimated 40 people in attendance.

Among the approximately 25 attendees who enjoyed lunch -- Rerras' treat -- at Redwood Gables Restaurant were Parksley Mayor Rick Chase; Gwenda Harte; Hallwood Town Councilman Tim Raynor; Myra Watson, the community coordinator for the local chapter of AARP; and Northampton County Chamber Director Deborah Christie, an Onancock resident.

Rerras is being challenged in the November election by Dr. Ralph Northam, an Eastern Shore native and Norfolk child neurologist.

Rerras recapped some of his recent accomplishments and legislative priorities, including $500 million in funding for Chesapeake Bay cleanup; passage of Abraham's Law, allowing some teens more flexibility and options in choosing medical care; maintaining the autonomy of the Chesapeake Bay Bridge-Tunnel and sponsorship of legislation that would limit real-estate tax increases to no more than 5 percent a year.

But the hot topic at both meetings was what Rerras described as "the thing that is hurting people the most on the Eastern Shore" -- rising energy costs.

"We have to do whatever we can to contain (electric rates)," he said.

Rerras said that he is working with Del. Lynwood Lewis to "make sure that companies like Delmarva Power have to honor their original memorandums of understanding requiring them to provide fair cost of service rates, not market-based."

Bill Stephens, director of Energy Regulation at the State Corporation Commission, was on hand to explain the recent spike in electricity rates for Delmarva Power customers.

After deregulation actions taken by the General Assembly in 1999, Delmarva Power bargained with the SCC to allow it to sell off their generation units.

Delmarva promised what Stephens referred to as the "virtual utility concept," where they agreed to price electricity during the rate cap period as if it still owned the generation.

The SCC approved the plan, Stephens said, "because we essentially had protection."

As part of this MOU between the state and Delmarva, there was a frozen fuel factor between Jan. 1, 2001, and Jan. 1, 2004. The rates would not increase, causing sticker shock for Delmarva customers when the company began "playing catchup" in 2006.

Other companies, such as Accomack-Northampton Electric Cooperative, had been phasing in the increases all along, Stephens said, so they don't seem as drastic.

Stephens said that many people are under the impression that Delmarva Power rates are much higher than A&N, but this is due to the sudden, 25 percent spike in 2006, he explained. He provided a price comparison that showed a little less than $25 difference between the two companies for the same number of kilowatt hours.

"Co-ops buy through an affiliate and buy a significant amount from the market so they're susceptible to the market," he warned.

Questions about alternative energy and alternative energy sources continued the energy economics lesson.

"Solar power is still an expensive technology," Stephens said, and wind power often encounters obstacles from people. Rerras acknowledged that more needs to be done with renewable energy and that "we need more fuel sources here in the U.S."

Nick Rerras for VA State Senate
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