Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: SATURDAY, August 21, 1993 TAG: 9308210211
SECTION: VIRGINIA PAGE: A-3 EDITION: METRO
SOURCE: Dwayne Yancey
DATELINE: LENGTH: Long
Yet both Roanoke and Roanoke Gas have adopted distinctly populist tones as each side tries to sway public support before Monday's City Council meeting on the city's possible takeover of the gas lines in the city.
A city postcard charges that Roanoke Gas stockholders "want to protect their profits, not share those profits with the citizens of Roanoke." Company ads warn: "Can you think of anything taken over by government that hasn't meant higher costs and poorer service?" Bob Denton, the head of Virginia Tech's communications department, is an advertising expert. He analyzes these ads this way: "Each side is playing up the stereotypes of the other. They're playing to basic fears, of big government versus a monopoly." Still, he's surprised at how cut-throat the ads have become. "To be this combative is rather novel." Simply from a tactical point of view, Denton says utilities usually have the advantage. "They're usually better at advertising because they do more of it and they have deeper pockets than government." Here's a look at who's saying what - and what's not being said.
The city says"
"Cox Cable pays a franchise fee of half a million dollars a year. Roanoke Gas pays $30,000 a year. That's Not Good Business." - from newspaper ad.
Tactic: City suggesting taxpayers getting a raw deal because Roanoke Gas doesn't pay more for the right to run pipelines in the city.
Basis for claim: Under Virginia's constitution, cities may require utilities to pay for the right to run their lines under city streets. It's true that Cox Cable Inc. pays the city $500,000 while Roanoke Gas pays $30,000. Appalachian Power Co., meanwhile, doesn't pay anything. C&P Telephone Co., in lieu of a fee, provides the city with a certain amount of free phone service.
Counter-argument: Roanoke Gas Co. contends comparing gas company to cable TV is comparing apples and oranges. Cable TV is a luxury, gas isn't. Roanoke Gas also points out that, even at $30,000 per year, it's paying the highest franchise fee for any gas company in Virginia. In some cities, the gas company doesn't pay anything.
"If City Council doesn't vote to consider this option, Roanoke will forever lose the chance to purchase the assets and Roanoke Gas may never pay another cent to the city for using city streets for its gas lines." - from postcard city residents.
Tactic: City warning that, not only are taxpayers getting a raw deal now, they may get a worse one in the future if council doesn't act.
Basis for claim: The franchise agreement runs out Aug. 30. What happens if there's no contract by then? The city warns that the gas company could keep pumping gas to customers, but not have to pay the city anything - nor would it have any incentive to reach a new franchise agreement. Only by voting to look into acquisition does the city have any leverage, the city claims.
Counter-argument: Roanoke Gas insists it'll keep paying the $30,000 per year franchise fee even if there's no new franchise agreement.
Company also insists it has plenty of incentive to sign a new franchise agreement. After all, the gas company is a regulated utility and must work with the city in digging up city streets to repair its lines.
"This move would save up to $2 million which could then be used to reduce gas rates, reduce taxes, or pay for government services like police, fire and schools." - from postcard mailed city residents.
Tactic: City claiming that taking over the gas company lines within the city would be good for the taxpayers.
Basis for claim: The city, unlike the gas company, wouldn't have to pay taxes. As a result, city-owned utilities can be big money-makers for localities.
Salem operates its own electric company. And in Richmond, the city-owned gas company adds $9.5 million to the city treasury each year.
Counter-argument: Company questions whether the city would really make as much money as the city claims.
What's not being said: City's not making any specific promises to lower taxes or increase services if it takes over the gas lines.
The company says:
"Where oh where will the city get the gas to keep you warm this winter?" - from newspaper ad.
Tactic: Company raising specter that if the city doesn't renew the franchise and instead explores a municipal takeover, gas supplies to the city might be cut off.
Basis for claim: "Where would the city get the gas?" asks company spokesman John Lambert.
Counter-argument: The city says it would buy the gas from Roanoke Gas.
"Take away half the customers, and rates have only one way to go." - from newspaper ad.
Tactic: Company warning that, if Roanoke takes over the gas lines in the city, company will have no recourse but to raise rates on its remaining customers in Roanoke County, Salem, Botetourt County and Montgomery County.
Basis for claim: About half of the gas company's customers are in the city. If they're gone, the company's profits will be cut in half. Stockholders likely won't stand for that, and will want to raise rates to maintain their profits.
Counter-argument: City says it'll hire Roanoke Gas to run the city-owned system, so the company will still make money. The savings comes not from stiffing the gas company, but because the city won't have to pay the state taxes the way the company does.
What's not being said: Maybe Roanoke Gas stockholders would have to accept lower profits.
by CNB