ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Wednesday, January 31, 1996 TAG: 9601310036
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
DATELINE: RICHMOND
The Senate Commerce and Labor Committee voted 9-6 Monday in favor of a bill to let Virginia Power and other utilities offer special deals to major customers and possibly reduce regulation on electric rates. A coalition of the utility's 20 largest customers, independent power producers and residential consumers opposed it.
The bill would let utilities find new ways of setting rates, possibly by using price caps. Traditionally, Virginia utilities limit earnings by basing them on costs and a limited profit margin.
Power officials said the decision does not mean the utility would use additional income to fatten its profit. Instead, Virginia Power president and chief executive officer James T. Rhodes said, it would write off major expenses. The utility said the proposal would give the State Corporation Commission more flexibility in setting rates.
Consumer advocate Jean Ann Fox, president of the Virginia Citizens Consumer Council, did not agree.
``What the bill would do is undercut the only protection that residential ratepayers have from being gouged on rates and shortchanged on service,'' Fox said. She said she fears that letting utilities make special deals with large customers would mean higher rates for residential ratepayers.
Three of the state's largest telephone companies use price caps, and natural gas utilities also are pushing for alternative ways to set rates.
- Associated Press
LENGTH: Short : 37 lines KEYWORDS: GENERAL ASSEMBLY 1996by CNB