Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, June 28, 1995 TAG: 9506290001
SECTION: VIRGINIA PAGE: A-1 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
DATELINE: LENGTH: Long
Regardless of whether it's called Appalachian Power or something else, the power company serving Roanoke and much of the rest of Southwest Virginia and West Virginia will be a different company than it is today, Vipperman explained.
That's because American Electric Power Co. Inc. of Columbus, Ohio - the parent of Appalachian Power and five other regional power companies - has begun reorganizing itself by operating functions rather than by geographic regions.
The changes may mean the departure of some midlevel and senior executives from Appalachian; Vipperman, himself - who last week announced he has been given new responsibilities with AEP - may leave the Roanoke Valley.
In the future, AEP's power generation, transmission and distribution will be managed on a systemwide basis. Apco and the five other AEP operating companies - which serve portions of Michigan, Ohio, Kentucky, Tennessee, West Virginia and Virginia - will continue to exist primarily as owners of AEP's property and other assets rather than as power distribution companies.
When he announced AEP's restructuring a week ago, AEP Chairman E. Linn Draper said it was necessary to allow the company to prepare for "a future that will be hotly competitive." Congress, in its 1992 energy bill, provided for a deregulation of the power industry that is expected to lead to vigorous competition on both the wholesale and retail levels.
Draper picked Vipperman to head AEP's new Energy Transmission and Distribution Group. The selection puts Southwest Virginia natives in charge of two of AEP's major operational units. Vipperman is a Patrick County native; and John R. Jones, who will head AEP's fossil-fuel and hydro power production department, is a native of St. Paul in Wise County.
Vipperman will temporarily retain his role as president of Apco, continuing his current responsibilities until the end of this year. But eventually that job with its administrative responsibilities will cease to exist, although someone probably will retain the title for purposes of signing legal documents, Vipperman said.
Whether he will stay in Roanoke or move to AEP headquarters in Columbus hasn't been decided, Vipperman said. The decision depends, in part, on how many days of the week he'll be required to be at the corporation's headquarters, he said.
If Vipperman stays, Roanoke would become the headquarters for one of AEP's major business units. If he leaves, many are likely to view it as another of a series of losses of company headquarters and top executives from Roanoke over the past several years. In either case, Vipperman said, AEP would maintain a significant headquarters-like operation at its Franklin Road office building.
Tom Brock, a business consultant and chairman of the Roanoke Regional Chamber of Commerce, said the Roanoke Valley has an interest in keeping high-paying jobs here, but more importantly has an interest in having a company that will provide the low-cost power that other industries in the region need.
"I don't see something that's catastrophic at all," Brock said. "What we want is cost-effective supplies of electricity."
Brock added, though, that Vipperman's departure would be a "significant loss" for the Roanoke Valley. Vipperman preceded Brock as chairman of the chamber and has been active in other civic endeavors, including United Way campaign chairman.
It's possible, Vipperman said, that he could be the only person in Roanoke affected by AEP's new way of doing things, but he also said that some midlevel and senior managers in Roanoke may lose their jobs because of the reorganization.
By the end of the summer, AEP should know how many levels of management it will need under the new setup, and by the fall should be at the point of choosing who will fill those management jobs, Vipperman said. If any managers are let go, they would get the company's severance package, which for long-time employees can include as much as a year's salary, he said.
The effect of AEP's transformation on the vast majority of Apco workers in Roanoke and elsewhere will consist mainly of changes in whom they report to, Vipperman said.
Apco, which has about 4,600 full-time employees - 2,100 in Virginia and the rest in West Virginia - plans to eliminate about 200 jobs across its service area within two years, in preparation for increased competition within the power industry. On the other hand, the company has added workers to deal with safety and the environment.
As part of AEP's reorganization, it will name "state officers," executives in charge of the company's dealings with customers, legislators, regulators and the public in the states where it operates. An executive who will fill that role for both Virginia and Tennessee, where AEP's Kingsport Power subsidiary is located, has not yet been named.
A separate state officer will be named for West Virginia. Apco has about 840,000 customers, evenly divided between Virginia and West Virginia. AEP has another smaller West Virginia subsidiary, Wheeling Power.
By reorganizing its operations by function on a systemwide basis, AEP hopes to gain some efficiencies by incorporating the best practices of operating companies throughout the system, Vipperman said.
What is happening within AEP is similar to what happened years ago when a collection of smaller companies were put together to form Appalachian Power, he said.
Apco has been a regional company for a long time, with AEP's corporate headquarters either in New York or Columbus, Vipperman said. "There's going to be some sort of headquarters here in Roanoke; I don't see that changing in any great way," he said.
In a competitive industry, having one name across the system to present to customers would be an advantage, Vipperman said. A new name hasn't been decided on, but a change is "certainly in the cards."
The rumors that have been circulating about the company's reorganization are to be expected, Vipperman said. To help explain what's happening to employees, the company has had special communications groups of supervisors meet with all employees and has set up a toll-free phone line to field questions from workers.
In his new job, Vipperman will retain responsibility for construction of the proposed 765-kilovolt transmission line from Oceana, W.Va., to Cloverdale. Spokesman for both the Virginia State Corporation Commission and Apco said AEP's structural changes should have no effect on the power-line application pending before the commission.
by CNB