Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 5, 1992 TAG: 9201050016
SECTION: BUSINESS PAGE: E-1 EDITION: METRO
SOURCE: GEORGE KEGLEY BUSINESS EDITOR
DATELINE: LENGTH: Long
AEP'S WHITE GOES OUT WITHOUT POWER LINE
Pete White said he's not surprised by the growing opposition to Appalachian Power Co.'s proposed high-voltage line that would stretch from West Virginia to near Roanoke.But he's disappointed the issue was not resolved before he retired last week as chairman of Apco's parent, American Electric Power Co.
Any power line, anywhere today will be opposed, he said in a recent interview. "Yet society wants more energy. . . . The NIMBY [not in my back yard] syndrome is affecting all kinds of service," White said, "but these things have to go somewhere."
White had hoped that before his retirement at the close of 1991 he would see state regulators grant a license for the 765,000-volt line Apco wants to build from Oceana, W.Va., to Cloverdale.
But Virginia hearings on the line are three months away and a formal application has not been filed in West Virginia. The 110-mile line is one of the last segments in a loop of high-voltage power lines the utility has been constructing for much of the past two decades. It is also among the most controversial.
The complexity of environmental data required by the government's permit process and the widespread opposition from citizen groups suggest there'll be a long struggle before the issue is decided.
"We'll have to play it out" before the regulatory commissions in the two states, White said. "I can't be sure the company will prevail, but if not, we'll not be able to provide that level of service" expected by customers.
People like to live comfortably, and that requires electricity, he said. "They don't want to go back to their grandparents' " days.
Opponents of the line question the need for more electricity and they say Apco would have enough power for new customers and expanding commercial users if the utility conserved more energy.
"I'm all for conservation and using energy efficiently," White said. But "there's only one way to do it. We have to transmit it or generate it. It's just as difficult to build a new plant" as a new line.
In his 43 years, mainly in utility management, White has coped with many environmental issues along with energy shortages, consumer complaints over rate increases, rising inflation and interest rates and a seesawing economy.
While he was executive vice president of Apco from 1969 to 1972, he recalled that "we went over to build a generating plant in West Virginia and the governor [was so pleased that he] came out to meet us. That's not the attitude today."
White said he's "not anti-environment, but we need to go about it intelligently. . . . An awful lot of fear mongers are out there."
The nation can have both a healthy and environmentally sensitive economy "if we don't go off half-cocked," he said. The public often does not realize that environmental changes cost more until the bill comes, he added.
The AEP system is the second largest electric utility in the nation and it ranked second in operating performance in 1990, according to Electric Light and Power Magazine. Pacific Gas & Electric Co. of San Francisco is the largest and Commonwealth Energy System of Cambridge, Mass. led in operating performance.
As a measure of efficiency, White said, in 1990 AEP's total coal consumption for its generating plants was 3 1/2 million tons less than the average for the nation's electric utilities.
Consumers' demand for electricity depends mainly on the economy, he said. Over the past 10 to 15 years, a lesser amount of energy was used after the shift from heavy manufacturing to services. "But if we have goods, we have to produce them. Cars will be made in Japan or here, but manufacturing has to be done somewhere" and factories require electricity, he said.
AEP is planning for a 1 1/2 percent annual growth in electricity demand, slightly less than the rate for the 1980s and far below the 5-7 percent annual increase in the 1960s and 1970s.
As White settles into retirement, he's convinced that economic growth is ahead and he hopes it will start this spring. Still, any change in the economy "will have a slower effect on us. We're a long-term business."
The economy of Apco's territory in Western Virginia is in better shape than many areas of the country, he said. The impact of the recession on AEP is not as bad as in 1982, he said, and AEP's service area in the middle of the country "is holding on."
White expects business will be better in 1992 "but a good deal depends on what Congress does" to restore consumer confidence.
The fundamentals of business are not that bad, he said. Inflation and interest rates are down and a lot of people are working, although the nation has a deficit problem. After World War II, White recalled that his father complained that "the country was going to hell because the national debt was greater than the gross national product. Now, the debt is [only] 53 percent of the GNP."
White takes the AEP system and its service to customers very seriously. Everything else comes second.
During his four decades with AEP, White has seen electric utilities swing from rate decreases in the 1950s and 1960s to increases aggravated by high interest rates and steep inflation in the 1970s.
The average annual use of electricity in a home on the AEP system also has jumped sharply, from 1,600 kilowatt hours when he joined the company in 1948 to 10,000 kilowatt hours.
White, a Chesapeake native, came to AEP after he earned an electrical engineering degree at Virginia Tech. He worked for AEP's service arm in New York until he transferred to a 12-year stint with Apco in Lynchburg and Roanoke. As executive vice president, he was operating head of Apco from 1969 through 1972. He returned to AEP in 1973. In 1976 he moved up to chairman, serving in that post for 16 years, more than one-third of his career.
AEP sent White, "a bright, young electrical engineer," to gain field experience in Lynchburg, recalled Duncan Kennedy, retired manager of Apco's Roanoke Division.
White has been a top utility executive in some tough years, Kennedy said. W.A. "Bill" McClung, retired public affairs director for Apco, said White "expected a good job from his people and most gave him a good job. . . . He was always talking to people about working safely."
Many Apco employees knew White simply as "Pete," McClung said.
White also is retiring in good standing among his peers in the industry.
He has been "a pioneer in clean coal technology, a leader in clean air policy and he helped lead the industry in shaping policies in Congress," according to Thomas Kuhn, president of the Edison Institute. White has been a longtime board member of the institute, the trade association for 180 publicly owned electric utilities.
White will live in Columbus, Ohio, in retirement, although he retains many Virginia ties. He has been rector of the Board of Visitors at Virginia Tech and he has a vacation home at Claytor Lake.
He expects to raise money for independent colleges in Ohio and he continue as a member of church and civic boards. He likes to fish, garden, play the piano and tennis, but reading electrical industry material has taken much of his career time.
White said he's "very comfortable," leaving Richard Disbrow in charge as the new AEP chairman. Disbrow, AEP president since 1979 and a 37-year employee, "knows the company," White said.
Disbrow is an engineering graduate of Lehigh University and he holds a master's degree from New Jersey Institute of Technology. Since he came to the company in 1954, Disbrow has gained broad experience through his major assignments in engineering, system planning, operations, administration and finance.
A key responsibility as chairman is to see that consumer rates of the operating companies cover expenses. Apco and the seven other AEP operating subsidiaries now rarely get all of the money they seek in requests for rate increases. Both the State Corporation Commission in Virginia and the West Virginia Public Service Commission recently authorized only a portion of higher rates asked by Apco, for example.
White said he hopes the utilities' rate increase requests will come "not as often . . . now that inflation has subsided substantially and interest rates are down."
But he said there is no way that rates can remain at the same level with the new Clean Air Act provisions. Those regulations, effective in 1995, are designed to reduce the environmental impacts of acid rain.
Before Congress approved the legislation, AEP estimated that compliance would cost the company more than $2.5 billion, raising electric rates from 12 to 18 percent in the 1990s.
The Environmental Protection Agency hasn't completed its rules, so the full impact of the law is not known. But, White said, "I hope we'll be able to hold the cost as much as we can."
AEP lobbied hard in Congress for development of more technology for cleaner burning of coal, instead of the limitations on power plant emissions required by the new law.
In Congress, White said, the idea that acid rain was a big danger came to be politically correct. An unidentified U.S. senator said to White, "Don't tell me about science, tell me about politics" when the time came to vote on the legislation.
AEP advocated placing lime in lakes as one way to attack the acid rain problem, he said, but environmentalists said that would be "unnatural."
In his tenure as chief executive of a $5.2-billion company, White led AEP's acquisition of Columbus Southern Power Co. and the resulting move of AEP headquarters from New York City to Columbus. Additional generating capacity was installed at Rockport, Ind., the Mountaineer plant in West Virginia and a nuclear plant in Michigan. The Zimmer Station in Ohio, partly owned by an AEP company, was converted from nuclear to coal-fired generation.
He expects AEP's next generating plant will use a technology for burning high-sulfur coal with a form of limestone which absorbs pollutants. The process is being tested by AEP at a plant in Brilliant, Ohio.
Coal will continue as AEP's main fuel for its generating units, White said, but nuclear plants probably will win acceptance in the next century.
White said he has "a few regrets" that environmental opposition thwarted Apco's 14-year effort to build a Blue Ridge hydroelectric dam project in Grayson County. "Look at Smith Mountain Lake and the developments there and visualize what could have been done in Grayson County," he said.
A future concern for AEP is a need to replace generating plants, some of which are 40 years old or older, White said. Plants will have to be replaced early in the next century, an additional cost of doing business. He expects they will generally be at the same locations. New permits must be obtained for new plants.