ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Saturday, June 1, 1996 TAG: 9606030038
SECTION: BUSINESS PAGE: A4 EDITION: METRO
SOURCE: GREG EDWARDS STAFF WRITER
BY THE TURN of the century, utilities will be pushing other forms of energy along with electricity.
By 2000, a phone call from the power company likely will interrupt your dinner, much the way pitches from long-distance telephone carriers do now, an American Electric Power Co. executive said Friday.
Similarly, business operators will be inundated with salespeople from various power companies, predicted William Lhota, an AEP executive vice president. Utilities will be pushing not only electricity but other forms of energy as well, including natural gas and fuel oil, in a total energy package, he said.
Lhota spoke at a breakfast at the Hotel Roanoke held by AEP, which until Jan.1 operated in Southwest Virginia and West Virginia as Appalachian Power Co. Roughly 200 of the company's customers and others from the Roanoke and New River valleys and Franklin County areas heard Lhota's views on the movement toward competition within the U.S. power industry, which has traditionally been a collection of regulated monopolies.
Power companies are now going through the same period of adjustment that telecommunication companies, railroads, natural gas suppliers and trucking carriers went through when their industries were deregulated, Lhota said.
"The only thing that's certain," he said, "is that our business will be different in the future than it is today."
The Federal Energy Regulatory Commission a month ago issued guidelines to open the nation's power transmission system to wholesale transactions. The action was called for by the 1992 Energy Policy Act to increase competition within the power industry on the wholesale level.
Various states, including Virginia, have begun studies on how competition can be carried to the retail level, or to individual customers. Last year, AEP threw its support behind opening the industry to retail competition.
The new competitive environment was the driving force behind AEP's decision to reorganize earlier this year. Instead of former companies based on geography, it now has units for generation, transmission and distribution of power. The new scheme meant the end, as far as customers are concerned, of AEP's seven traditional operating companies, including Appalachian Power, which had its headquarters in Roanoke.
To assure his audience that AEP still is committed to a presence in Roanoke, Lhota noted that the company maintains its Virginia-Tennessee state office, Central Virginia regional headquarters, Southern transmission regional headquarters and Southern human resources center here. Lhota works from AEP's corporate headquarters in Columbus, Ohio.
AEP believes all customers should benefit from competition within the industry and that all customers should be free to choose their power supplier in the future, Lhota said. The competition should occur in the realm of power generation, while power transmission and distribution should continue to be regulated to ensure efficiency and reliability for customers, he said.
Lhota explained that AEP also has proposed setting up separate organizations to manage transmission lines in the Midwest on a broad regional basis and to establish a market price for power. Already endorsing AEP's proposal for an independent transmission system operator are 19 other Midwestern utilities, including Kentucky Utilities, Commonwealth Edison and Detroit Edison.
Within the power industry, the debate now is not on whether independent transmission system operators are a good idea, but whether generators of power should be able to deal directly with large retail customers, bypassing local distribution companies, Lhota said.
LENGTH: Medium: 70 lines ILLUSTRATION: PHOTO: William Lhota AEP's executive vice president says theby CNBcompany is committed to its Roanoke presence.