Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, April 17, 1993 TAG: 9304200404
SECTION: EDITORIAL PAGE: A7 EDITION: METRO
SOURCE: CHARLES A. SIMMONS
DATELINE: LENGTH: Long
CONGRESSMAN IGNORES THE FACTS OF APCO'S POWER-LINE PROPOSAL
A COMMENTARY by Congressman Rick Boucher on April 10 in the Roanoke Times & World-News purported to discuss an alternative to Appalachian Power Company's proposed transmission-reinforcement program.We were pleased to note in the commentary that he apparently recognizes that loads are growing and transmission constraints do exist. We were also pleased that he says he shares a unity of interest with Apco in providing reliable, low-cost electricity to Southwest Virginians.
Beyond these points of agreement, however, we are deeply disappointed at the conclusions reached by the congressman (or his staff) since they appear to be based on assumptions that are incorrect or incomplete. The disappointment is made greater by the fact that Apco has gone to considerable effort to respond to each and every question of his - only to have the essential facts, which we provided, ignored.
Congressman Boucher alleges that the project is not in the long-term, economic interest of Southwest Virginia. The truth is that Apco's proposed 765-kv transmission reinforcement program, including the Wyoming to Cloverdale 765-kv line, is, in fact, vital to the economic viability of the area served by Apco in Southwest Virginia and southern West Virginia.
The economic benefits to be realized from the construction of the facilities as planned are of considerable magnitude, while the cost of failure to provide for the electric-service needs of our customers is tremendous, in both social and economic terms.
The economic benefits to Southwest Virginia will range from continuing a reliable supply of reasonably priced electric service to our present and future customers, to providing the ability to offer transmission services for independent power producers.
Reliable and reasonably priced electric service will permit existing businesses to continue their operations and possibly expand, while also making Southwest Virginia more attractive to industries seeking locations for new plants. Additionally, Apco's ability to provide transmission service for independent producers is essential if an independent-producer industry is to develop in our service area.
In my opinion, the failure to construct the proposed transmission-reinforcement facilities would virtually eliminate any possibility such independent producers will be able to build economically viable plants in Southwest Virginia for the purpose of supplying East Coast markets, simply because there would be insufficient transmission capacity available to deliver the plant output to those markets.
Boucher goes on to put forth the alternative of building power plants in Southwest Virginia and a 765-kv transmission line that would be considerably longer than the line proposed by Apco and many times longer than the Virginia portion of Apco's proposed route.
He simply chooses not to address the additional cost of such an alternative except to make a reference to possible "incentives" to be funded by taxpayers. The facts of the matter are:
The basis for constructing the proposed facilities is to provide for the needs of our own customers. Any construction program of this magnitude must first be approved by the Virginia State Corporation Commission and the West Virginia Public Service Commission before it can become a reality. The bases for approvals by the commissions are findings that the project is required to meet the needs of the customers in our service area and is in the public interest.
Secondary benefits - such as the ability to serve independent producers - may be of interest to the commissions. But they are not a factor in the determination of need for the transmission-reinforcement program. (It is worth noting that the consultant retained by the SCC staff to evaluate the project found the proposed plan would provide the necessary reliability and was the best economic choice.)
The construction of sufficient base-load coal-fired generation in Southwest Virginia to provide reliability equivalent to that of the proposed 765-kv line would cost more than $6 billion, approximately twice the total amount of all of the company's current assets. This would be a totally additional cost, since Apco does not anticipate the need for new base-load generation until the year 2009. Additionally, a 765-kv line of even greater length would be required as well.
The impact of such unnecessary construction of generation would result in virtually doubling the rates to our customers in both states. Certainly, a doubling of electric rates would constitute a tremendous disincentive to any type of economic development in the area we serve and cannot be seriously contemplated.
The state commissions must approve any significant generation additions as well as transmission lines. The commissions, as well as Apco, must consider the economic impact on ratepayers even if others do not.
The findings of the SCC staff in regard to the generation option were best stated by the director of the division of energy in a presentation to the Coal and Energy Subcommittee in September 1992. He estimated that building combustion turbines fueled by oil and/or natural gas would be "roughly five times as expensive as the proposed line."
And the option of coal-fired generation plants, he said, would be "virtually outside the realm of economic feasibility. The installed cost of a coal unit is easily four to five times that of a combustion turbine."
Needless to say, we believe the director of the energy division of the SCC is in an excellent position to judge the impact of alternate courses of action.
Boucher's concern that the location of the transmission line will dictate the location of generation is misplaced. The proposed line will add approximately 2000 megawatts of additional system capacity. Any new generation (from Apco or independent producers) would be integrated into the nearest transmission facility having adequate capability to accept the generation. Generation located in Southwest Virginia will, therefore, have the same opportunity for transmission service as facilities located in other portions of Apco's service territory.
It is perhaps unfortunate that Boucher and his staff did not go forward in 1992 with their stated intent to present their ideas to the SCC for consideration during the scheduled hearings. Participation in the hearing process would have provided an opportunity for the congressman's proposals to be questioned, cross-examined and otherwise tested as was the company's proposal. Such participation would have also resulted in the congressman being aware that the generation alternative he suggests in his commentary was considered in the hearings.
For more than 50 years, Apco has planned, constructed and maintained an electric generation and transmission system that has provided reliable service at a relatively low cost. The present transmission-reinforcement program is an extension of that planning process, which has served the area well in the past and will continue to do so in the future, if allowed to continue.
The long-term social and economic interest of the area will be served well by timely completion of the project as proposed. Failure to provide this essential element of needed infrastructure would create substantial social and economic hardship on our service area, and virtually eliminate prospects for economic opportunities for independent power producers.
It is time to move forward and not to revisit issues that were properly considered nine months ago.
Charles A. Simmons is vice president of Appalachian Power Co.