SALEM CONSIDERS ELECTRIC DEAL

                         Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: THURSDAY, March 18, 1993                   TAG: 9303180254
SECTION: VIRGINIA                    PAGE: C-4   EDITION: METRO 
SOURCE: DAVID M. POOLE
DATELINE:                                 LENGTH: Short
SALEM CONSIDERS ELECTRIC DEAL
The Salem Electric Department could save an estimated $4.3 million over 10 years under a proposed contract with a Midwestern power company.
But Salem is unlikely to pass on the savings to electric customers.
Director Doug Smith said the city may put the money into a reserve fund to guard against future electric rate increases.
Salem City Council is to decide this month whether to approve an agreement with Public Service of Indiana for 10 megawatts of wholesale electricity.
Indiana would charge less than what Salem would pay to buy the same amount of electricity from Appalachian Power Co. Smith said the savings estimate - which is subject to change - could be as much as $4.3 million over the term of the contract.
The 10 megawatts from Indiana would provide about 15 percent of Salem's peak electrical need. The city would continue to buy the balance of its power from Apco.
The proposed contract also must be approved by other members of the Blue Ridge Power Agency, a consortium of municipalities that operate their own electric companies.

by Archana Subramaniam by CNB