Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: TUESDAY, February 16, 1993 TAG: 9302160106
SECTION: VIRGINIA PAGE: A1 EDITION: METRO
SOURCE: GREG SCHNEIDER STAFF WRITER
DATELINE: RICHMOND LENGTH: Medium
COALFIELDS SEEK JOBS WITH PLANT
AN INFLUENTIAL consumer group has joined Virginia Power in opposing a bill that is intended to help Southwest Virginia's economy by making the utility buy electricity produced by the envisioned plant.If Henry Ford had had this kind of law, we might all be driving Edsels:
The General Assembly is poised to help a Roanoke company build a power plant in Southwest Virginia by forcing Virginia Power and its customers to buy the electricity, even though the utility doesn't want it.
The unprecedented measure has cleared the House of Delegates and on Monday won endorsement from the Senate Commerce and Labor Committee. All that's left is a vote this week on the Senate floor.
At odds are the interests of Virginia Power, which says it will pass the added cost to its 1.7 million customers, and the desperate needs of far Southwestern Virginia, where unemployment is well into double digits.
"You're never going to get another opportunity in your lifetime to put some legitimate infrastructure in Southwest Virginia," said Del. Ford Quillen, D-Gate City, who is sponsoring the measure with the passion of a last hurrah. Quillen has announced he will retire this fall after 22 years in the legislature.
"Our unemployment is so high" - perhaps 25 percent in some areas - "you're not going to have anybody out there before long," he said. "Help us help ourselves."
Quillen is pushing a proposal by Coastal Power Production Co. of Roanoke to build a half-billion-dollar coal-burning plant in the Toms Creek section of Wise County, near Coeburn. It would employ about 600 people during construction and 200 permanently.
The plant would use an experimental technique that converts coal to a substance like natural gas, then reburns byproducts to greatly reduce pollution. Coastal has won a $95 million federal grant to help build the plant, but to keep the money it must have a guaranteed customer for the power.
Quillen's bill would force Virginia Power to buy the electricity at a price set by the State Corporation Commission.
Virginia Power buys electricity from private companies all the time, but at competitively bid rates. The utility vehemently opposes Quillen's measure, arguing that it would wreck the competitive process.
"We're all in favor of [helping] Southwest Virginia if it's done in the right way, not by having our ratepayers subsidize it," said James T. Rhodes, president and chief executive officer of Virginia Power.
Rhodes said that while the SCC may set rates for the Toms Creek power this year, the company won't need it before 2002. It's dangerous to set rates that far in advance, he argued.
The SCC also opposes the bill. In a study last fall, the commission computed that the Toms Creek electricity could cost Virginia Power $150 million more than if the utility built a similar project on its own. Over the 25-year life of the project, that would tack about 25 cents a month onto the average consumer's bill.
If the plant is built by 2002 and the power isn't needed for another 18 months, ratepayers could get tapped for another $100 million, said Bill Stevens of the SCC.
That prospect has brought Virginia Power unlikely allies.
"It's very strange to be on the same side of an issue as the company," said Jean Ann Fox of the Virginia Citizens Consumer Council, long a foe of Virginia Power rate increases. "Don't get used to it," she warned.
Fox said the bill "sets a very bad precedent." Though Virginia Power customers would pay only slightly more for Toms Creek power, the principle of imposing a surcharge on a select group to benefit one part of the state is "bad public policy," Fox said.
It should have been an unbeatable alliance, this combination of the utility's lobbying dollars and the consumer group's populist power. But it may be a sign of the desperation of Southwest Virginia that the committee ended up endorsing the measure 10 to 5.
"We need to take some risks here in order to bring this technology to the state and help the region," said Sen. Frank Nolen, D-Augusta.
Sen. Richard Saslaw, D-Fairfax, pointed out angrily that Virginia Power has overcharged customers hundreds of millions of dollars and gotten tax breaks to boot. "It's not a one-way street, sir," he told one speaker. "Hell, the ratepayers took some awful shellackings back in the early '80s and late '70s because of bad decisions" by Virginia Power, Saslaw said.
Saslaw also noted that the comparatively rich counties of Northern Virginia have long paid taxes to support programs in Southwest Virginia. Creating new jobs in coal country would lighten the burden for his constituents, he said.