Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, July 27, 1994 TAG: 9407270074
SECTION: VIRGINIA PAGE: C-4 EDITION: METRO
SOURCE: Associated Press
DATELINE: RICHMOND LENGTH: Medium
The ousters are the latest move in a bitter and highly public feud that prompted the State Corporation Commission to launch an investigation June 17.
Removed from the board of Virginia's largest utility were William G. Thomas, a lawyer and lobbyist; James F. Betts, a retired insurance executive; and William W. Berry, retired chairman of the boards of both Virginia Power and Dominion Resources.
Dominion Resources said in a news release that Thomas and Berry used their positions to try to seize control of the parent company's board ``and to engage in other activities contrary to the best interests'' of Dominion Resources and Virginia Power.
``Betts was only recently appointed to the Virginia Power board in April as a result of being named vice chairman of the DRI board, a position from which he resigned in July,'' the holding company said.
Jim Sanderlin, a lawyer for Dominion Resources, said the removal of the three directors ``was done to get rid of the ringleaders in whom Dominion Resources no longer had confidence.''
Everette G. Allen Jr., an attorney for Virginia Power, said the actions ``destroy any semblance of independence regarding the management of Virginia Power.''
Said Allen, ``These three directors have always acted in the best interests of the company's ratepayers, shareholders and employees. There is absolutely no basis for removing them from the board of Virginia Power.''
Kenneth A. Randall, a Dominion Resources director and chairman of a special committee overseeing the firm's response to the SCC probe, said the company asked the remaining Virginia Power board members to recommend replacements for their ousted colleagues.
The recommendations were solicited ``because of our interest in an amicable settlement,'' Randall said.
``You don't scorch the earth as DRI did today if you're truly interested in extending an olive branch,'' Allen said.
Dominion Resources common stock closed Tuesday at $36 a share, up 25 cents from Monday's close on the New York Stock Exchange. Virginia Electric's class E preferred stock closed at $64 a share, down $1.
In Western Virginia, the utility sells electricity in portions of Alleghany, Bath, Bedford, Botetourt and Rockbridge counties.
Concern about the dispute's possible impact on ratepayers prompted the SCC investigation, which focuses on whether Dominion Resources violated a 1986 order governing the relationship between the parent company and subsidiary.
The order gives Virginia Power a degree of autonomy to ensure that its public service function is not compromised by Dominion Resource's unregulated businesses, which account for about 10 percent of its income.
Among the SCC's worries when it began the probe was that Virginia Power President James T. Rhodes and other senior officials could lose their jobs, creating turmoil at a utility praised for solid management and low-cost service.
Sanderlin said the dispute began last spring when Rhodes, who was unhappy reporting to Dominion Resources President Thomas E. Capps, told Berry he planned to take advantage of a new early retirement plan. He said Berry told Rhodes not to tell anyone else until he talked to T. Justin Moore Jr., a Dominion board member.
Betts, Berry, Rhodes and Moore later ``put an ultimatum to Capps that he retire himself or he would be on the street,'' Sanderlin said.
``The gang of four said they had the [Dominion] board's backing,'' said Tom Spahn, another Dominion lawyer. But he said the board had not been polled, and a majority did not want Capps to retire.
The 58-year-old chairman, who initially agreed to step down when he turned 60, changed his mind.
Sanderlin also said Berry led an unsuccessful effort to give Virginia Power eight seats on a 15-member Dominion board.
``The public shareholders would have no voice in freely selecting the majority of their DRI board of directors,'' Sanderlin said. ``In essence, the tail would wag the dog.''
by CNB