The newsletter includes key updates, announcements, and highlights about CVEC projects, achievements, and upcoming events. We encourage members to take a moment to read through it once it lands in your mailbox. The web version is available on the Current Communicator Newsletter page.
Letter from the President (Excerpt from the March edition of CVEC’s Current Communicator)
Spring has arrived in central Virginia, but the harsh reality of the impact of winter weather on electricity prices remains an important topic for CVEC members. We’re seeing early signs of the challenges created by the imbalance between electric supply and demand. Electricity shortages during peak periods are highlighting the weak decision to depend on short‑term markets to guide investment in multi‑billion‑dollar, long‑lead power supply projects that must contend with frequent changes in market design and evolving state and federal policies. Until society resolves these fundamental challenges, the imbalance will continue.
CVEC purchases most of its electricity through various fixed-cost contracts with generation facility owners and power market trading organizations. For periods of unexpectedly high electric demand, CVEC purchases the additional electricity necessary to supply members through the PJM Interconnection (www.pjm.com), an organization that operates the transmission grid and power markets in a multistate region. The total cost of the electricity sold through PJM in January 2026 was double the cost of January 2025 and February was almost as high. All utilities who purchased any electricity from the PJM markets were impacted.
CVEC based its present Power Cost Adjustment (PCA) factor on power supply costs of $70 million, but the prices of just the extra electricity used by our members for the last week of January and first week of February cost $14 million more than budgeted. CVEC will need to increase the PCA again later this year to recover this additional cost. The monthly cost of electricity doubled even though weather, demand, and generation were similar to last year. In a regulated environment, the costs would have been limited to the actual cost of producing the electricity plus a fixed margin. However, the current market design allowed for billions of dollars in wealth transfer from electric ratepayers to power suppliers, including $14 million from CVEC members. Given that power plants take nearly a decade to permit and build, relief from these outrageous costs is not in sight.
CVEC is voicing concerns about the imbalance of generation and electric load growth, and about the market design that allows unfair charges well above the cost of making and delivering electricity. We are also working on initiatives to limit the amount of electricity that we must buy at peak times to help keep your bills as affordable as possible until our society takes the necessary steps to balance new generation and supply resources with the growing demand for services and devices that use more electricity.