Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: MONDAY, April 12, 1993 TAG: 9304120253
SECTION: EDITORIAL PAGE: A9 EDITION: METRO
SOURCE: RICK BOUCHER
DATELINE: LENGTH: Long
BRING POWER-GENERATION CAPACITY HOME TO SOUTHWEST VIRGINIA
APPALACHIAN Power Co. has proposed constructing a 765-kilovolt electricity-transmission line from Wyoming County, W.Va., to Cloverdale in Botetourt County. This proposal is not in the long-term economic interest of Southwest Virginia. From our vantage point, a better alternative exists that will simultaneously enable Apco to meet the increasing demand for power in its Virginia service territory and create new economic opportunities in Virginia's coal-producing counties.Southwest Virginia should become the home to new electricity-generating plants built and operated by Apco or by independent power producers that could supply electricity to Apco, Virginia Power Co., municipal power agencies or other utilities throughout the United States. Apco's current power-line proposal will largely foreclose this opportunity.
A recent study, jointly commissioned by Apco and Virginia Power Co., predicts that Southwest Virginia can accommodate more than 2,000 megawatts of new power-generating plants. Each 100 megawatts will annually produce $1.3 million in wages and $750,000 in real-property taxes for the host locality, and consume 350,000 tons of coal each year. Success in siting the entire 2,000 new megawatts of generating capacity would increase Virginia's annual coal production by 15 percent.
One factor inhibiting the construction of new plants near Virginia's coal mines is that at the present time Apco, which serves the coal-producing counties, does not have sufficient transmission lines to carry over a substantial distance electricity that would be generated in those counties. My goal is to ensure that adequate transmission capacity will be provided to accommodate the roughly 2,000 megawatts of additional generating capacity that we believe can be installed.
Apco has indicated that it will dedicate 25 percent of the capacity of its new 765-kv transmission line to carrying electricity generated by independent power producers. While I welcome this statement of intention, the 25 percent set-aside, which represents approximately 500 megawatts of generating capacity, not only falls far short of the estimated 2,000 megawatts of capability that we believe Southwest Virginia can accommodate. It also would be divided in some fashion between independent power producers in Virginia and West Virginia.
Obviously, a more creative approach is needed. Apco and I share a unity of interest, which is to guarantee reliable, low-cost electricity to Southwest Virginians. We appear to have a divergence of interest, however, regarding where to produce the power that will be consumed. Apco points to projected increases in the demand for electricity in the eastern portion of its Virginia service territory, particularly in the Roanoke and New River valleys, to justify its need for the power line. Rather than constructing new plants in Virginia, however, Apco prefers to meet this load growth by purchasing power from generating plants located in other states and owned by Apco's sister companies within the American Electric Power system. The proposed power line will be used to facilitate these purchases.
I prefer to meet these load-growth needs with power generated in Virginia. Each year, Apco customers in this state send more than $250 million to Apco's generating facilities in West Virginia and its sister companies in other states, because Apco generates in Virginia only 36 percent of the power its Virginia customers consume. That money is paid in salaries to coal miners and power-plant employees and goes into the treasuries of local governments in other states. Even a portion of this $250 million would have an enormous stimulative effect for our regional economy, if it were used to finance local coal producers and attendant coal-mining jobs and to pay the property taxes that would be associated with new generating facilities in Virginia.
Unless we act to reverse this trend now, the flight of capital from our region will only worsen as new load growth is met by increasing power imports from other states. A dangerous pattern may be emerging, which, if not checked, will imperil the potential for Virginia's coal-producing counties to accommodate any new generating capacity, whether owned by Apco or independent power producers.
The AEP system presently has excess generating capacity in states to our west. Apco is now seeking the ability to transmit power from those underutilized plants to its growing load in the East. In other words, AEP chose to construct more generation than it needed in the West, and now hopes to send that "excess" power to the East, claiming that this is the most economic alternative because the generation facilities already exist.
Eventually, however, the "excess" generating capacity will become exhausted because of the steadily increasing demand. If the Wyoming-Cloverdale line is completed, AEP will be inclined to build future generation around the new transmission line. Justification for that placement will be that it is the most economic alternative because "excess" transmission facilities will then exist. This cycle is likely to continue unless AEP is required to consider another alternative.
The alternative I suggest involves the possibility of constructing a power line from the coal-producing counties of Southwest Virginia directly to the Roanoke area - allowing electricity generated in Southwest Virginia to be used to meet growing power demand.
The line I propose would lie along the existing Apco right-of-way and would transport power from new Apco generating units located in the coal-producing counties and from units owned and operated by independent power producers. The electricity carried on the line could meet the needs of Apco within the eastern portion of its Virginia service area. Other power carried on the line could be sold to Virginia Power or other Eastern utilities that decide to purchase it.
The benefits of this proposal are evident. Rather than sending more than $2 billion out of the state over the next decade, which would be the practical result of increasing Apco's generation deficit in Virginia, we could create a vibrant, energy-producing economy in Southwest Virginia. Apco could experience some cost savings by purchasing low-cost power from mine-mouth facilities. These small, independent power plants could be built as generation is needed, rather than having Apco invest in a single, large power plant that must, in essence, be idle while waiting for demand to meet its capacity. Investment in the transmission infrastructure and new plants necessary to create a power-generation industry in Southwest Virginia is appropriate, and while it may be more expensive than building the Wyoming-Cloverdale line in the short term, it will yield substantial dividends over the long term.
The commonwealth should explore the possibility of providing incentives or direct investment to create an electricity-generation industry in Southwest Virginia. Investment could include paying for the transmission line to create access for the industry, much as the commonwealth pays for highways to create access in other parts of the state to expand the economic base. Incentives might include tax credits to compensate for any additional cost, which this proposal may generate in the short term, much as Ohio has provided incentives to AEP to encourage the utility to continue purchasing Ohio's high-sulfur coal rather than switch to Virginia's low-sulfur coal.
Before the Wyoming-Cloverdale project is permitted to proceed, a comprehensive analysis of this option, taking into account both the short-term costs and long-term benefits, must be undertaken. It should be possible to provide for the energy-growth needs of Apco's Virginia service territory by using Virginia-generated electricity.
Rick Boucher represents Virginia's 9th District in the U.S. House.