ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, January 6, 1996 TAG: 9601070006
SECTION: BUSINESS PAGE: A6 EDITION: METRO
SOURCE: DAVE MAYFIELD LANDMARK NEWS SERVICE
Virginia Power plans to ask state lawmakers to help loosen controls on the way it and other electric utilities operate.
The state's largest power company said Friday that it needs more leeway to negotiate special rates with customers and to enter new lines of business because of increasing competition.
But the head of a statewide consumer group said the proposals could mean higher rates than necessary for many utility customers.
Virginia Power sells electricity in portions of Alleghany, Bath, Bedford, Botetourt and Rockbridge counties.
If enacted, Virginia Power's proposals would give the State Corporation Commission the authority to abandon long-established methods of regulating electric utilities. Spokesmen for American Electric Power in Roanoke were unavailable late Friday to comment.
Virginia Power has several key legislative proposals.
It wants the SCC to be able to approve alternatives to the traditional method of governing a utility's profit margin by setting maximum rate-of-return on sales.
The current method limits energy utilities' profits to a predetermined annual percentage. With such a method no longer required, Virginia Power could ask the commission to lift the profit cap in return, for example, for a freeze on the rates it charges customers. That could encourage a utility to expand its already-aggressive job cuts and other cost reductions, because it no longer would have to worry about exceeding its allowed profit range.
Virginia Power also wants the commission to have the authority to let it negotiate rates with customers Each customer of a certain class - residential, commercial or industrial - now pays the same rate.
The electric utility's other main proposal is that the commission be freed to let the power company pursue more lines of business - such as maintenance work on its customers' electrical equipment.
But Jean Ann Fox, president of the Virginia Citizens Consumer Council,said the legislature should delay taking any action until the commission has completed its own recently started study of power-industry competition. Fox said she is concerned that Virginia Power will try to lock in rates that are higher than it deserves and will get into businesses that it ought not to, subsidizing its costs with profits from its core operations.
LENGTH: Short : 49 linesby CNB