THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, August 3, 1996 TAG: 9608030302
SECTION: BUSINESS PAGE: D2 EDITION: FINAL
SOURCE: ASSOCIATED PRESS
DATELINE: RICHMOND LENGTH: 32 lines
Non-utility power generators should be allowed to compete with electric utilities in setting up power plants dedicated to a single large customer, the state's regulatory staff recommended.
But the State Corporation Commission staff said Virginia should move slowly before opening the electric power business to competition.
The study said efforts to create a national competitive market for power ``may tend to increase our rates while lowering rates in high-cost states.''
The study said Virginia rates are among the lowest in the country. But it shows SCC staff members are worried about the reliability of electric power in a competitive market, and about the impact on smaller customers.
``There can be little doubt that large customers will receive more attention and options than small customers,'' the report said.
Much of the push to end monopolies by electric utilities is coming from large industrial power buyers and from the independent generating companies that want to serve those customers.
A freewheeling market might tend to discourage companies from making big-ticket, long-term investments in large power plants. Such plants, while costly to build, are cheap to operate.
The report said there was a danger that companies would build power plants only when brownouts and blackouts force electricity prices up high enough.
KEYWORDS: SCC ELECTRIC POWER PLANT by CNB