DATE: Wednesday, August 20, 1997            TAG: 9708190017
SECTION: LOCAL                   PAGE: B10  EDITION: FINAL 

TYPE: Editorial 

                                            LENGTH:   67 lines

DEREGULATION OF UTILITIES SHOPPING FOR KILOWATTS POWER COMPANIES' MONOPOLIES ARE ENDING. WILL CONSUMERS LOSE OUT?

Within a few years, you'll probably be able to choose your power company the same way you choose your phone company now.

Already, seven states have passed laws to break up the monopolies that sell power in their respective states, and many more states - most outside the South - are considering such laws. Or Congress might deregulate the 170-plus utilities that sell $200 billion of power annually under state regulation.

National deregulation is unlikely this year, but one way or another, the deregulation of power companies is headed Virginia's way. It definitely has gotten the attention of candidates for state office, as campaign donations from utilities have poured in. Since 1995, for example, utilities have given Democratic gubernatorial candidate Donald S. Beyer Jr. $79,000 and Republican gubernatorial candidate James S. Gilmore III $97,000.

At least one General Assembly subcommittee is studying utility deregulation.

Much of the push for deregulation comes from such heavy users of power as manufacturing plants, which hope to negotiate better rates once they're free to shop around. Also, supporters of deregulation argue that efficiencies would result from greater competition among utilities, especially when the most cost-effective companies are permitted to sell electricity more widely.

Consumer groups worry, however, that deregulation will mean higher rates for Virginia consumers, especially the poor, the elderly and residents of rural communities - people with weak bargaining positions.

Currently, in return for monopoly status, utilities have to serve everyone at reasonable rates. Virginia Power, with 1.9 million of the state's roughly 2.7 million power customers, gives large users an average rate of 3 cents per kilowatt-hour, compared with the residential rate of more than 7 cents. Since the national average for homeowners is more than 8 cents, Virginians are relatively lucky.

But if large power users negotiate still better deals, homeowners could see rates rise.

``Contrary to what proponents of restructuring contend,'' said Jack R. Hundley of the Virginia chapter of the American Association of Retired Persons, ``there is no guarantee that residential taxpayers will benefit from restructuring. If the outcome is left entirely to the marketplace, residential customers are likely to be the last class of customers to receive any benefits from restructuring - if they receive any at all.''

As staff writer Ledyard King reported Sunday, consumer advocates worry that the steady cascade of utility dollars into state campaigns could mean homeowners shouldering higher rates while businesses, local governments (also heavy power users) and the utilities protect their own interests.

``I don't think they are (contributing) solely because they're interested in good government,'' said Robert Goldsmith, president of the Abingdon-based Virginia Council Against Poverty. ``I think they expect something in return.''

Virginia Power's chief lobbyist, Bill Crump, countered, ``All we ask for is a fair hearing. We're not asking for special treatment.''

But if it takes hundreds of thousands of dollars in contributions to buy a fair hearing, where does that leave homeowners?

Elected state officials have a responsibility to protect homeowners' interests when a new utility-deregulation bill is drafted. Greater efficiency through competition is worth pursuing, but reliability of electric service needs to be ensured, and homeowners' bills should not be allowed to soar while large users negotiate rock-bottom rates.

Throughout the upcoming debate, elected state officials should accord consumer groups and homeowners a fair hearing - and that hearing should be free.

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