THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, August 25, 1994 TAG: 9408250581
SECTION: BUSINESS PAGE: D01 EDITION: FINAL
SOURCE: BY TOM SHEAN, STAFF WRITER
LENGTH: Medium: 60 lines
Virginia's State Corporation Commission launched a second investigation Wednesday into ties between Virginia Power and its parent, Dominion Resources Inc.
``We intend to investigate the DRI/Virginia Power relationship and how it may affect . . . the public interest associated with Virginia Power's obligations to furnish adequate and reliable service and just and reasonable rates,'' the SCC order said.
The SCC launched an earlier inquiry in mid-June out of concern that senior managers might leave Virginia Power. Executives at Dominion Resources and Virginia Power were deeply divided over the pace of cost-cutting at the utility, the state's largest.
Describing the competitive forces that have reshaped the electric power industry in recent years, the SCC said Wednesday it was time to re-examine a 1986 order that defined the relationship between Virginia Power and its Richmond-based parent.
The emergency investigation begun in June was not the appropriate vehicle for considering the need for a new regulatory arrangement, the SCC said. The initial investigation will continue.
As part of its second investigation, the SCC will consider whether to terminate or modify arrangements between Virginia Power and its parent.
Mark Lazenby, a spokesman for Dominion, said the holding company will ``cooperate fully'' with the SCC. However, he said, ``we think the current corporate structure has served our customers and shareholders well.''
William Byrd, a Virginia Power spokesman, told The Associated Press that the utility ``will cooperate with the commission in any way we can.''
The SCC's scrutiny of Virginia Power and Dominion was triggered by the split last spring between executives at the utility and the holding company.
Virginia Power's president and chief executive, James Rhodes, had complained to some Dominion directors about his inability to work with Dominion chairman and CEO Thomas E. Capps. That, in turn, prompted SCC concerns that Rhodes and other senior managers might leave the utility, jeopardizing the reliability of its service to customers.
After two months of bitter exchanges and legal maneuvers, the companies settled their differences Aug. 16. The SCC canceled a public hearing on the dispute.
The Dominion-Virginia Power agreement calls for overlapping boards of directors, the election of a new president at Dominion, and the restoration of three directors who had been dismissed from Virginia Power's board.
In its nine-page order Wednesday, the SCC approved the proposed changes in the management and boards. The SCC also directed its staff to file an interim report on the second investigation by Dec. 1.
KEYWORDS: VIRGINIA STATE CORPORATION COMMISSION
VIRGINIA POWER DOMINION RESOURCE INC.
by CNB