Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SUNDAY, January 29, 1995 TAG: 9501310117
SECTION: VIRGINIA PAGE: D6 EDITION: METRO
SOURCE: ASSOCIATED PRESS
DATELINE: FALLS CHURCH LENGTH: Medium
Falls Church is considering setting up a municipal power company that would buy electricity directly from power plants and deliver it to the city's approximately 10,000 residents, said Mayor Jeffrey Tarbert.
``It is an entrepreneurial idea that works very well,'' Tarbert said. ``In general, public power systems do a good job and do it a little cheaper.''
Last fall, the city asked power plants nationwide to bid for the city's business. It received proposals from as far away as Texas, Tarbert said. He would not say how much the six bidders the city is studying would charge.
In addition to his part-time job as mayor, Tarbert is assistant executive director of the American Public Power Association, a lobbying group for municipal power systems such as the one Falls Church may create.
But he said the city had been toying with the idea of seceding from Virginia Power before his election to City Council two years ago. Because of his expertise, Tarbert has since led the effort, he said. The City Council elected him mayor last year.
If Falls Church stops buying electricity from Virginia Power, the city then must decide how to deliver it, either by buying Virginia Power's existing equipment or putting up its own lines.
Either option carries prohibitive costs, Virginia Power spokesman Bill Byrd said.
``The bottom line is, we believe we are still the best deal,'' Byrd said. ``There is a lot involved, in terms of the cost of transmission, equipment and liability.''
The State Corporation Commission also would have to approve a city utility for Falls Church. Such a nonprofit, city-owned company would be operated by elected city officials, Tarbert said.
While municipalities as large as Los Angeles and as small as Front Royal operate their own power companies, most of those utilities were set up decades ago, Tarbert said.
Fourteen Virginia localities, many of them in the southwestern portion of the state, own their power systems.
``It is unusual to begin this now as a new thing,'' he said. ``But we are moving toward an open market. Competition is here.''
A dozen cities nationwide are considering the same thing, in part because the 1992 Energy Policy Act forced utilities to open up their distribution network to other suppliers.
Las Cruces, N.M., has decided to withdraw from El Paso Electric Co. City officials there have estimated that residential customers will save about 20 percent over their current bills.
Virginia Power is owned by investors and operated as a profit-making business. The Richmond-based utility sells about $4 billion in electricity to 1.9 million customers in Virginia and North Carolina.
Falls Church is a very small portion of the utility's business, with 4,200 residential and business customers, but a successful defection could tempt larger localities to follow suit, analysts said.
``It is inevitable that utilities all over the country are going to have to wrestle with losing or ... negotiating with their large customers,'' said Jack Kasprzak, associate vice president and utility analyst at Davenport & Co. in Richmond.
Nationally, about 250 stockholder-owned utilities such as Virginia Power provide about 75 percent of the electricity and own about 80 percent of the transmission lines.
Tarbert said city officials have not set a deadline for a decision. In the meantime, Virginia Power is still providing power to Falls Church, although its franchise to do so has expired.
by CNB