AEP CUTTING DOWN ON CONSTRUCTION

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

DATE: WEDNESDAY, April 7, 1993                   TAG: 9304070084
SECTION: BUSINESS                    PAGE: B6   EDITION: METRO 
SOURCE: GEORGE KEGLEY STAFF WRITER
DATELINE:                                 LENGTH: Medium
AEP CUTTING DOWN ON CONSTRUCTION
For the first time in more than 50 years, American Electric Power Co. is not building a generating plant.
The parent of Roanoke-based Appalachian Power Co. said it will rely on existing facilities to avoid costly construction. The holding company's annual report, being mailed this week to shareholders, said AEP is emphasizing conservation over expansion.
The seven-state system's electricity generating capacity is expected to be adequate until 2000, "postponing the need to embark on an expensive construction program," the company said.
AEP ultimately "will have stretched our generating capacity to the maximum," and aging plants will be retired, said Richard Disbrow, who this month is retiring as AEP's chairman. By then, the seven-state utility will decide whether to build a new plant, buy power from other companies, step up conservation or implement a combination of those options, he said.
In a brief report on the progress of Apco's planned 765,000-volt line between West Virginia and the Roanoke Valley, AEP repeated its position that the line is needed to maintain a regional power supply and meet Apco's customer needs.
Conservation and a slack in construction are proper "as you look at what it costs to build a generating plant," said Charles Simmons, Apco's construction and maintenance vice president in Roanoke. Conservation will be pushed harder because the utility's electricity load is growing slightly faster than forecast, he added.
The slack in building plants comes with a decline in sales growth for AEP and its seven operating subsidiaries.
Apco's growth of 7 to 8 percent a year in the 1960s and 1970s virtually doubled every decade, Simmons said. But Apco's growth forecast has slowed to about 2 percent annually. Last year, Apco sales were up 3 percent, slightly more than the AEP average.
Along with conservation programs, AEP reported on work-force reductions of about 1,000 jobs to improve productivity and eliminate duplication and unnecessary work.
To delay construction of more expensive generating and transmission facilities, AEP reported on its stepped-up demand-side management, the practice of providing customers the means of using electricity more efficiently.
Opponents of the proposed high-voltage line long have contended that Apco and AEP do not have effective conservation porgrams.
The annual report tells of such demand-side management programs as the electronic light bulb, described as more powerful and long-lasting than incandescent lights; auditing and weatherizing homes; and heating water off-peak.
In a major downsizing, by the end of the year 500 transmission and distribution line jobs are to be eliminated, mainly at outside contractors. About 15 of these jobs will be cut at Davis Elliot Co. of Botetourt County and at Stackhouse Inc. of Greensboro, N.C.
AEP also said it plans to eliminate up to 500 jobs by restructuring and downsizing its service corporation staff at the Columbus, Ohio, headquarters.
Despite the decision not to build more generating plants, the company said its construction spending for the next three years is estimated at $2.4 billion, including significant expenditures to comply with the Clean Air Act of 1990.

by Bhavesh Jinadra by CNB