ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Friday, February 2, 1996 TAG: 9602020071
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
DATELINE: RICHMOND
SOURCE: ROBERT LITTLE STAFF WRITER
A divided state Senate voted to relax some rate-setting restrictions on power companies Thursday, a measure hailed by Virginia Power as an economic development incentive but one that consumer groups fear could wreak havoc with their power bills.
The measure, which still must be approved by the House of Delegates and signed by the governor to become law, would allow Virginia Power and other utilities to negotiate rate discounts with large companies. The bill also allows state regulators to lift traditional profit caps on electric utilities.
The State Corporation Commission still would approve rates, but members could give electric utilities more latitude as competition emerges in the power industry.
State senators voted 23-16 to approve the plan, which has become one of the first quibbles of the 1996 legislative session. It passed without debate, mostly because members were weary from a protracted argument the day before.
"The biggest concern, I guess, is that we just don't know what this will all mean," said Sen. Thomas Norment, R-Williamsburg, one of the plan's more forceful opponents.
The measure is one of six proposals being pursued by Virginia Power as it tries to gird itself for a more competitive, deregulated environment. Company officials argue it is necessary. Virginia Power, they say, could not be competitive if the industry becomes controlled by the open market and not a regulatory board.
Sen. Richard Saslaw, the Fairfax County Democrat sponsoring the bill, says it is needed for Virginia to compete to attract large manufacturing plants. Many states, including most in the South and Northeast, already allow some alternative rate schedules for utility companies.
"We've got to let Virginia compete," said Saslaw. "Big companies will run to other states where they can negotiate their costs."
American Electric Power, which serves Western Virginia and operates in states - such as West Virginia - where special rates are allowed, supported the bill.
But Dan Carson, president of AEP Virginia and Tennessee, said it's too soon for the company to decide if it would give special rates in Virginia.
In West Virginia, AEP offers a discounted rate for three years as an incentive to companies that expand their operations or bring them to the state, Carson said.
Much of the opposition to the package came from senators concerned that the plan is being rushed through the legislature because of Virginia Power's corporate clout. The SCC is studying utility deregulation, and Congress is preparing to ponder the concept.
"I learned a long time ago that the one deal you don't accept is the one you have to take by midnight," said Sen. Joseph Gartlan, a Fairfax County Democrat who opposed the plan.
A coalition of the state's largest industrial companies lobbied against the measure, calling it an unfair governmental favor for Virginia Power. Consumers, likewise, feared how utility companies might make up for the low rates they could establish with big-business customers.
"You don't give up consumer protection until you have real competition, and we're not close to that," said Jean Ann Fox, president of the Virginia Citizens Consumer Council, a consumer advocacy group.
AEP's Carson said his company managed to offer the special rates without passing the cost on to its smaller customers.
"We have no plans to recommend treatment of one group of customers at the expense of another."
Also on Thursday, the Senate delayed action on another part of the Virginia Power package. The bill, sponsored by Sen. Richard Holland, D-Windsor, would let the SCC seek compensation from federal agencies if one of their facilities in the state bypasses the local utility to buy power elsewhere.
Staff writer Betty Hayden contributed information to this story.
HOW THEY VOTED
De-regulating Virginia Power
John Edwards, D-Roanoke Yes
Virgil Goode, D-Rocky Mount No
Emmett Hanger, R-Augusta County No
Madison Marye, D-Shawsville Yes
Steve Newman, R-Lynchburg No
Jack Reasor, D-Bluefield No
Malfourd "Bo" Trumbo, R-Fincastle No
William Wampler Jr., R-Bristol No
LENGTH: Medium: 95 linesby CNB