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Farmer |
Rappahannock Electric Cooperative's customers will see results of its recently announced acquisition of a portion of Potomac Edison where it counts: their bills.
Fredericksburg-based REC should be able to stabilize rates because it will be able to spread costs for such things such as equipment over nearly twice as many users, said President and CEO Kent D. Farmer.
"REC decided to buy it because it gave us 50,000 more customers and not that many more miles of line," he said. "We believe in the long run it will mean lower rates for existing customers and, in the long run, for Potomac Electric customers as well."
The cooperative and the Mount Crawford-based Shenandoah Valley Electric Cooperative are buying Potomac Edison Co.'s Virginia electric distribution operation for $340 million. That's about 6 percent of Potomac Edison's current coverage area. Besides Virginia, it serves parts of Maryland, Pennsylvania and West Virginia.
"The sale will enable us to focus on our core states and generation," said Mark Nitowski, spokesman for Potomac Edison's parent company, Pennsylvania-based Allegheny Energy. "Our Virginia territory is a good growth area, but it is a small part of our business."
REC will gain portions of Clarke, Frederick and Warren counties and the towns of Madison and Stanardsville once the Virginia State Corporation Commission approves the sale, as is expected, at the end of the year. It also will pick up additional areas in Albemarle, Greene, Fauquier, Madison, Orange and Rappahannock counties, localities in which it already operates.
The sale will affect about 102 Potomac Edison employees, but REC and Shenandoah Valley have agreed to offer them employment. REC will get approximately 50 of these, most of whom are linemen, Farmer said.
The company also will need to hire additional staff. Linemen and servicemen for the new areas will work out of REC's Culpeper office, while back-office jobs such as accounting, customer service and technical maintenance will be consolidated at its office in the Four-Mile Fork Industrial Park.
"We're still working on developing the details of integrating their system into ours, so we don't know the number at this point," Farmer said.
He added that Potomac Edison customers probably will notice an improvement in service because the people working on the substations, which step down electricity from transmission lines and direct it to end users, will be local and should be able to respond more quickly to such things as outages.
Potomac Edison, which will continue to man transmission lines after the sale, currently sends in people from its operations in other states to deal with substation work, Farmer said.
Old Dominion Electric Cooperative, which sells power to REC and 10 other cooperatives, has been involved in the sale proceedings and should be able to handle the additional load, said spokesman Jeb Hockman. For example, it announced on Wednesday a long-term agreement to purchase the energy output and renewable-energy credits from a 70-megawatt wind-energy facility under development in Garrett County, Md. The project is expected to be completed next year.
Customers also will be switched from an investor-owned utility to one owned by its users. They will be able to elect members to REC's board and get refunds if the cooperative's expenses prove less than expected.
Until the sale is finalized, Potomac Edison will serve its Virginia customers, and they should contact the utility if they have questions.
"We're committed to making the transition as seamless as possible," Nitowski said. "Closer to the time of the sale, we'll communicate the new service numbers and things like that."
Cathy Jett: 540/374-5407
Email: cjett@freelancestar.com
