THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, July 22, 1994 TAG: 9407220519
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: By TOM SHEAN, STAFF WRITER
LENGTH: Medium: 57 lines
Citing allegations that Virginia Power may have paid more for its coal than was necessary, the staff of Virginia's State Corporation Commission asked for permission Thursday to broaden its investigation into Dominion Resources Inc. and its electric utility subsidiary.
In its request, the SCC staff referred to allegations by Virginia Power employees last week that Dominion Resources chief executive officer Thomas E. Capps had put undue pressure on utility employees to settle a price dispute with CSX Transportation. The railroad moves much of the coal that Virginia Power burns at some of its power plants.
The SCC launched an investigation in mid-June into arrangements between Richmond-based Dominion and its Virginia Power subsidiary when a dispute among Dominion board members raised the possibility of an exodus of utility managers.
``The information obtained through discovery in this proceeding indicates that ratepayers may have paid, and may continue to be paying, excessive rates,'' the SCC staff said in its motion Thursday.
When Virginia Power was negotiating with CSX Transportation in 1990, Capps had both a personal and professional relationship with CSX Corp. chairman John Snow, Virginia Power told the SCC last week.
Capps and Snow, the utility said,``serve on a number of corporate boards together and have reportedly vacationed and hunted together.''
``Virginia Power officials felt, and continue to feel, that this relationship between Capps and Snow presented the appearance of a conflict of interest, if not the reality of conflict of interest. . . ,'' the utility said.
Snow joined the Dominion board in 1993.
Attorneys for Dominion argued Thursday that Virginia Power's responses to the SCC interrogatories were either inaccurate or incomplete. Capps was within his authority to ask Virginia Power employees about the status of negotiations with CSX Transportation and to urge a speedier resolution to the dispute, the Dominion attorneys said.
While Capps urged Virginia Power employees to resolve the dispute with CSX more quickly, he ``didn't get involved in the substance of the negotiations,'' said Thomas E. Spahn, one of the attorneys.
And rather than costing Virginia Power and its ratepayers additional millions of dollars, the renegotiated contract with CSX probably saved Virginia Power and its ratepayers money, Spahn said.
James L. Sanderlin, another Dominion attorney, said the company would respond to the motion at a later date.
Virginia Power said Thursday that it had no response to the request for a broader investigation.
``We believe the answer to the interrogatories speaks for itself, and we will cooperate fully with the commission,'' said Carl Baab, a Virginia Power spokesman. by CNB