The Honorable Hullihen Williams Moor, Chairman
State Corporation Commission
Commonwealth of Virginia
Post Office Box 1197
Richmond, VA 23218

Dear Hullie:

The American Electric Power Company (AEP) recently unveiled a newly proposed route for a 765 kV powerline connecting AEP facilities in Wyoming County, West Virginia with AEP's facilities in Cloverdale, Virginia. In contrast to AEP's original proposal, under which the line's Virginia route would have traversed Craig County and a portion of Roanoke County, under its latest proposal, the line would enter Virginia in Tazewell County and traverse portions of that county as well as portions of Bland, Giles, Montgomery, Craig and Roanoke Counties. In comparison to the original AEP proposal, the newly recommended route would impose a much greater burden on communities and the environment in Southwest Virginia and on numerous Southwest Virginia residents who reside in proximity to the path of the line.

In its filings on the newly recommended route, AEP maintains that by the year 1999, during times of annual peak demand, the existing power lines serving the area would not have the ability to sustain peak demand if there should be a failure of one of the major lines, such as the existing 765kV line. In other words, the argument for the new 765kV line is premised on the need for a duplicate ability to serve AEP's Virginia service territory during brief periods of peak demand each year, in case something happens to cause an outage of one of the major lines now in place. Given AEP;s excellent operating record, I would expect any such outages during peak demand periods to be rare and of short duration. Of course, during all times when the existing transmission infrastructure is properly functioning, the new 765kV line would serve as a conduit through Southwest Virginia to sell power generated elsewhere in the AEP system to Virginia Power and other utilities on the east coast.

In view of the fact that AEP's latest proposal places a far greater burden on Southwest Virginia than its earlier proposal, I am writing to urge that the Virginia State Corporation Commission (SCC) make a detailed inquiry into the local need for the line and in the course of that inquiry evaluate in-depth the potential for a combination of actions, collectively less damaging than the powerline, to meet in a reliable fashion whatever local need is identified. While several years ago, the SCC granted a certificate of need to AEP under certain specified conditions, the passage of time since that action was taken and the imposition of a far heavier burden on our localities under AEP's most recent proposal justify, in my opinion, a full inquiry by the SCC concerning need and the availability of alternatives.

In particular, I suggest that the Commission conduct an in-depth and exhaustive analysis of the possibility that one or some combination of the following alternatives could meet the growing power demands in AEP's Virginia service territory while avoiding the negative effects on our region's communities, property owners and environment which would result from construction of the proposed 765kV powerline:

1. An aggressive program of demand side management would reduce AEP's peak demand. Electric utilities across the nation are employing demand side management techniques as a means of reducing their peak power demands and obviating the need for costly new generation and transmission facilities. Approaches such as special negotiated rates for industrial and residential customers have the effect of increasing the use of power during off-peak hours and decreasing its use during peak times. The customer who can effectively utilize off peak consumption benefits from lower electricity bills, and the utility, by lessening its peak demand, can lessen or avoid altogether the need to construct new generating and transmission facilities.

   The same result can also be achieved through approaches such as negotiating interruptible power contracts with willing consumers who, for an appropriate rate reduction, would be willing to have their power curtailed during times of peak demand.

   To my knowledge, AEP has not implemented these types of aggressive and creative demand side management programs in its Virginia service territory. Perhaps, as part of a strategy in the alternative to the construction of a 765kV powerline, the utility should be required to put such an aggressive program in place. An independent review of the effectiveness and adequacy of whatever demand side management program AEP presently has in place would be appropriate in any event, and I strongly encourage the SCC to conduct that review.

2. Should some existing power sales contracts be canceled? A determination should be made of the extent to which scheduled sales of AEP generated power to other utilities contribute to AEP's inability to service Southwest Virginia and the extent to which the cancellation of contracts for such sales might contribute, in combination with other actions, to AEP's ability to maintain reliable service to its Virginia customers without constructing the 765kV line.

3. The potential of AEP to purchase a portion of the power it needs for its future Virginia service territory demands from neighboring utilities should be considered. AEP has connections to the electricity grids of Virginia Power, Duke Power, TVA and Carolina Power and Light, all of which are utilities neighboring AEP's Virginia service territory. As part of a comprehensive strategy in the alternative to the construction for the 765kV powerline, the potential for AEP to purchase power during times of peak demand from some or all of these neighboring utilities should be evaluated. In this regard, it should be noted that AEP is a winter peaking utility while some neighboring utilities, including Virginia Power, are summer peaking. Accordingly, it is very possible that Virginia Power and other regional utilities might have excess power available during AEP's periods of peak demand.

   The potential for AEP to make use of the Bath County pumped storage facility to serve its Virginia power customers should also be investigated. Pertinent questions would include the extent to which the pumped storage facility is being fully utilized by Virginia Power and Allegheny Power Systems, its present owners, and the potential for AEP to obtain rights to power from the facility for its Virginia service territory.

4. The potential for additional electricity to be generated in AEP's Virginia service territory should be considered.. This consideration has two components:

   First, an analysis should be undertaken of power that might be generated in Southwest Virginia's coal and gas producing region from local energy sources, including coalbed methane, other natural gas, and coal. While new generation in the coal producing counties without the addition of new transmission lines may not be sufficient to meet fully power demand growth elsewhere in AEP's Virginia service territory, its potential in combination with other actions should be evaluated. I am aware of at least one investigation by an independent power producer for location in Virginia's coal producing region of a gas fired generation facility. Such projects offer opportunities for much needed economic growth in our coal and gas producing area., and combined with other actions could potentially meet the region's power needs without the new 765kV line.

   The second component of this analysis involves the potential for AEP to construct its own additional electricity generating facilities in its Virginia service territory. The Utility Resource Plan submitted by AEP to the SCC in July of 1997 reflects plans to construct 1200MW of gas-fired generating capacity. It is also my understanding that AEP's projections indicate declining system-wide generation reserve requirements unless new generation capacity is added. Given these factors, the SCC should ask why AEP is unwilling at the present time to construct some or all of the gas-fired capacity called for by it Utility Resource Plan in its Virginia service territory. Some observers have suggested that gas units could be built at Cloverdale, bringing new power resources to the precise point where AEP says they are needed and providing ample power to meet the projected demand on peak days.

   I strongly urge the SCC to investigate the economic feasibility of a generation construction program by AEP or by independent power producers as a means of meeting power growth demand which standing alone or in combination with other actions could serve as an alternative to the proposed new line.

5. If it is determined that a new powerline is in fact necessary, could a line of lesser kilovoltage than the proposed 765kV line be constructed in a manner which, when combined with some or all of the foregoing suggested strategies, could meet the projected power demand in AEP's Virginia service territory? Typically, 765kV transmission lines can carry approximately 4000 megawatts of power. I understand that AEP's need for new power in its Virginia territory in the near term is significantly less than 4000 megawatts, perhaps less than on-half of that amount. The SCC should determine precisely how much additional power is in fact needed and ask whether that amount of power could be supplied by upgrading smaller existing power importing lines.
6. If, after an exhaustive review of the foregoing possible alternatives, the SCC determines that new high capacity transmission is needed, could the need be met by the extension of such a line from Wyoming County to Glen Lyn in Giles County, followed by a strengthening of the local distribution system emanating from AEP's existing power station at Glen Lyn? If it is not feasible to upgrade the distribution capabilities from Glen Lyn into AEP's Virginia service territory, is there some other point near the West Virginia border to which a new high capacity transmission line could be attached followed by an upgrading of the local distribution system? This approach would meet the need for new power in the region with no environmental, community or landowner detriment in Virginia.
7. A consideration of the negative effect of new power lines on landowners and a review of landowner compensation policies would be appropriate. Should the SCC conclude that any new transmission is required, I also ask that the SCC review current policies regarding the compensation of landowners whose property must be forcibly purchased by AEP in order to build new transmission. The vigorous opposition of potentially effected property owners suggests that they would be unwilling to sell their property for this purpose given a choice. Beyond the immediate question for the proposed 765kV line, as the nation moves toward a competitive electric power market, the property rights acquisition policies associated with new power line construction should be reviewed thoroughly.

The vigorous and nearly unanimous opposition of potentially affected communities and individual landowners in the path of the proposed line provides strong evidence that the 765kV line's effects are negative and vary real. Given the present difficulty in knowing the shape of the electric utility industry even five years from now and the potential that dramatic changes in the industry may significantly alter the industry's transmission needs, I am particularly concerned that at the present time the potential for alternatives less damaging than the 765kV line to provide reliable electric power to our region should be thoroughly evaluated.

I sincerely hope that prior to passing on the presently pending application, the SCC will take the time and apply the expertise necessary to provide complete and exhaustive answers these questions. I am sure that other possible alternatives to the construction of a 765kV line will be suggested by other individuals, and I hope that it will be your determination to take those suggestions into account and provide a complete analysis of them as well.

Thanking you for your attention to this request, I am with kind regards,

Sincerely,

Rick Boucher
Member of Congress