THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Wednesday, August 14, 1996 TAG: 9608140311
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY DAVE MAYFIELD, STAFF WRITER
LENGTH: 67 lines
Dominion Resources Inc.'s planned purchase of a big coal-fired power plant in Illinois has run into opposition from a labor union and a coalition of consumer advocates.
But the Richmond-based utility holding company said it still hopes to complete the $186.2 million purchase of the Kincaid Power Station from Commonwealth Edison Co. of Chicago by year's end.
Dominion announced in April that it would buy the 1,108-megawatt plant, more than doubling the generating capacity of plants that it owns outside its Virginia Power system. The sale would mark the largest transfer ever in the United States of a ``classic regulated utility plant to an independent power producer,'' a Dominion spokesman said at the time.
But the Illinois attorney general's office, the city of Chicago and an Illinois ratepayers' group called the Citizens Utility Board said in filings last week with that state's commerce commission that the deal would harm utility customers.
And the International Brotherhood of Electrical Workers, which represents employees at the plant, said it will seek an injunction to block the sale. Union officials said Dominion, with Commonwealth Edison's approval, has already proposed its own new contract terms - in violation, they say, of a clause that requires the current pact to be honored even if the plant is sold. Under Dominion's proposed terms, some workers' wages would be cut, one union leader said.
Mark Lazenby, a Dominion spokesman, declined to comment on the union's charge. But he confirmed that the company subsidiary making the purchase, Dominion Energy, has outlined new wage and benefit proposals ``equal to prevailing economic trends.''
Lazenby said the consumer advocates' complaints, meanwhile, ``are not a surprise to us'' and lack merit.
Mark Cohen, executive director of the Citizens Utility Board, called the planned sale ``an end run around state regulation, an attempt to bust the union and a windfall for ComEd shareholders.''
After the purchase by Dominion, the plant, which is part of Commonwealth Edison's highly regulated base generating network, would sell its power to ComEd for 15 years. But Dominion officials have said they plan to eventually operate the facility as a full-fledged independent power producer, marketing its electricity on the open market to any and all potential buyers.
Cohen said he would prefer to see the plant, which he said is among Commonwealth Edison's lowest-cost power generators, remain part of the utility's regulated network. He complained that ComEd's plans to use the sale proceeds to reduce its long-term debt would unfairly benefit shareholders more than customers.
In any case, the deal exemplifies the increasingly turbulent world of electric utilities, which have been shaken in recent years by steadily increasing competition for customers.
Dominion's Virginia Power unit has aggressively cut costs in response to that challenge, eliminating about 1,200 jobs over the past 16 months alone.
Meanwhile, Dominion, through its non-utility subsidiaries, has been prowling ever farther for power-plant investments. It already owns electrical-generating capacity in Argentina, Bolivia and the Central American nation of Belize.
And last week, press reports indicated that Dominion is a potential bidder for Britain's East Midlands Electricity PLC. The reports called the purchase unlikely because of probable opposition from Virginia's State Corporation Commission. But Merrill Lynch & Co. utility analyst Steven L. Fleishman said in a bulletin last week he thinks there is a ``reasonable opportunity'' that the transaction would be approved.
Dominion's Lazenby said, ``We are not commenting on these reports in any way.'' by CNB