THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Friday, September 8, 1995 TAG: 9509080482
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 75 lines
He looked and sounded like a preacher trying to rally his flock. In a booming voice that rang with apocalyptic warnings, Glenn English implored 1,100 rural electric cooperative managers at a meeting Thursday to take up political arms.
The enemy? Politicians who want to privatize many of the nation's federally owned hydroelectric plants.
English, a former 10-term Oklahoma congressman, is chief executive of the Arlington-based National Rural Electric Cooperative Association. With 1,000 co-ops serving 30 million Americans, including 800,000 in Virginia, it's a sizeable industry - and one owned by its customers.
But English said the cooperatives would be greatly weakened if Congress approves the idea of selling the government's hydro plants to the highest bidders, as some lawmakers led by California Congressman John Doolittle propose.
Giant investor-owned utilities, the Con Eds and Virginia Powers of the electric-generating world, would grab the dams and then use their leverage to try buying up strategically located co-ops, he predicted. ``All they're interested in is cherry picking,'' English asserted.
Meanwhile, co-ops and their customers, who now get first dibs on the cheap hydro power, would inevitably suffer as they're forced to scramble for other, more expensive sources of electricity.
The Windsor-based Community Electric Coop, which serves 8,600 customers in Suffolk and Isle of Wight and Southampton counties, illustrates the co-ops' point. Its general manager, James M. Reynolds, estimates his co-op's costs would increase $830,000 a year if it lost its hydroelectric supply from the Southeastern Power Administration. That would jack a typical customer's rates up 8 percent, or roughly $100 a year.
Rural electric cooperatives find themselves facing an uncertain future largely because of budget deficits. Congress is looking for more ways to raise money. Selling the Energy Department's power marketing associations and the 133 federal dams they control could raise billions of dollars for the strapped Treasury.
The rural electrics are already getting steep subsidies through low-interest loan programs and discounted tax-exempt bonds. When you add this criticism to the debate, the industry that Franklin Delano Roosevelt revved up in the 1930s to bring power to the nation's neglected hinterlands starts to look politically vulnerable.
That helps explain why the board of the National Rural Electric Cooperative Association tapped the energetic English early last year to lead the organization.
On Thursday, English talked political reality with the delegates from Virginia and 13 other states who've been meeting this week at the Omni International Hotel.
He said he knows that many of them have resisted joining the co-ops' political action committee because it has supported candidates - many of them Democrats, like English - whose views on abortion or gun control don't match their own. Those other issues are irrelevant, he lectured.
Ironically, some of the most damaging political shots taken by co-ops lately have been from conservative think tanks like the Cato Institute employing a reverse strategy of populism. They cite tax breaks for co-ops in well-heeled communities like Hilton Head, S.C., and Vail, Colo., as prime examples of misguided government policies.
But English said the $1 billion a year in combined breaks for the nation's co-ops pale beside the $5 billion in breaks that the nation's investor-owned utilities enjoy from favorable schedules for depreciating assets.
English said the co-ops would prefer that the government not sell its hydro plants. But they may be willing to go along with a scheme that would allow co-ops to buy the dams.
Co-op lobbyists said all members of Virginia's congressional delegation except 9th District Rep. Rick Boucher, who is undecided, support either no sale or a preference sale to the co-ops. by CNB