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Virginia Reviews Municipalization Threat

Fortnightly Magazine - February 15 1996

The Virginia State Corporation Commission (SCC) has stepped into the middle of a dispute between Virginia Electric and Power Co., an electric utility, and the City of Falls Church, VA. The city had planned to displace the utility as the supplier of electricity for city residents by purchasing a minimum amount of facilities from the utility and soliciting bids for power supplies outside the local system. Under the plan, labeled by some "municipalization light," Falls Church has proposed to purchase Virginia Power's "electric meters and nothing more" and has made a formal request for transmission service from the utility. According to the SCC, the city has said that it intends to acquire the facilities without state approval and has also failed to respond to allegations by Virginia Power even after the SCC initiated a formal case to review the matter (see Virginia Electric and Power Co. v. City of Falls Church, Virginia, 161 PUR4th 631 (Va.S.C.C. 1995)).

Relying on "uncontested facts" alleged in Virginia Power's petition, the SCC found that the city's plan would clearly result in the expropriation of utility property. Since Virginia Power does not acquiesce in the acquisition, the city must condemn the property to acquire it. The SCC concluded, however, that state public utility law requires its approval for such an action. Virginia Electric and Power Co. v. City of Falls Church, Virginia, Case No. PUE950017, Nov. 27, 1995 (Va.S.C.C.).

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