THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Friday, February 2, 1996 TAG: 9602020443
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: By ROBERT LITTLE, STAFF WRITER
DATELINE: RICHMOND LENGTH: Medium: 69 lines
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 which 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 thiswill all mean,'' said Sen. Thomas K. Norment Jr., 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 otherwise be competitive if the industry becomes controlled by the open market and not a regulatory board.
Sen. Richard L. Saslaw, the Fairfax 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, allow some alternative rate schedules for utility companies.
``We've got to let Virginia compete,'' Saslaw said. ``Big companies will run to other states where they can negotiate their costs.''
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.
A coalition of the state's largest industrial companies lobbied against the measure, calling it an unfair governmental favor for Virginia Power. Consumers 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 Virginia Citizens Consumer Council, a consumer advocacy group.
Also on Thursday, the Senate delayed action on another plank of the Virginia Power package. The bill, sponsored by Sen. Richard J. Holland, D-Isle of Wight, 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.
Holland agreed to delay the bill so that Sen. Kenneth W. Stolle, R-Virginia Beach, could draft amendments designed to protect the Navy and other government contractors in Hampton Roads. The amendments could come up for a vote today.
Separately, Virginia Power said it asked for a striking of language in still another bill, in the House, that would let it get into new businesses. It said the change should ease fears by heating and cooling contractors that it intends to invade their business.
KEYWORDS: DEREGULATION GENERAL ASSEMBLY VIRGINIA POWER by CNB