Minutes 11/14/1978 - Laserfiche WebLink

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50 TUESDAY - NOVEMBER l4~ 1978 followed by regulatory rate-making bodies~ to obtain a fair price (i.e., through rate tariffs) for its product, viz., electric energy. Elaborating further~ Mr. Vaughan noted that APCo's investment tripled in value between 1967 and 1977 (from $570 million to $1,519 million, respectively) whereas its capacity to meet peak demands only doubled (from 2 million KW to slightly over 4 million KW)~ with the average investment cost having been $109.00 per KW in 1967 whereas, with the completion of a new generating plant (in West Virginia) in 1981~ the investment cost will rise to $485.00 per KW. The need to proceed with constructing more generating facilities~ Mr. Vaughan cited~ is urgent in order to avoid shortages predicted for the early 1980's, inasmuch as the area served by APCo not only is growing but APCo's customers are using more electric energy. For example, APCo's retail customers in 1967 used less than an average of 6~000 kwhrs. per year but now are using in excess of 10,000 kwhrs. annually; and in 1968 APCo had 31,500 customers with electrically-heated homes whereas, currently~ it has l50~000 such customers, Total usage of electric energy by APCo's 545,000 customers in 1968 was 10,6 billion kilowatthours, In 1977~ APCo had 688~000 customers using 17.6 billion kilowatthours. Meanwhile~ in addition to other rising operating costs~ APCo's 1967 cost for coal was $4.41 per ton, compared with $29.04 per ton in 1977. Over the next few years, Mr. Vaughan stated, APCo will have to spend over one billion dollars if it is to meet increasing energy needs but its ability to finance this amount of construction hinges upon attracting investors in a most competitive money market~ upon its earnings return, and upon rate "relief". In further statements and in response to a direct inquiry~ Mr. Vaughan assured the City that APCo would attempt to meet the City of Martinsville's electric energy requirements and that~ if at any time a curtailment throughout APCo's system becomes necessary~ curtailment would apply in the manner set forth in the present agreement between APCo and the City of Martinsville. Meanwhile~ Mr. Vaughan recommended that the City evaluate all facets of the City's proposed hydro-electric project, i.e.~ make its own decision thereon, with the assurance that APCo will in no way become involved at any