If Virginia Electric and Power Co. executives believed they had outlasted consumer challenges to their empire with the crushing 1977 gubernatorial defeat of former Virginia Lt. Gov. Henry Howell, then they'd better check their southern flanks.
Here, 155 miles south of Vepco's 21-story, cream-colored Richmond headquarters, the executives will find another populist politician busily attempting to dismember their company, the nation's ninth-largest electric utility.
What's more, this official has several things going for him that Howell, a Norfolk lawyer and Virginia's premier consumer advocate in the 1970s, could only dream of accomplishing in the governorship, the political office that thrice eluded him.
Vepco's newest and most serious challenger is North Carolina Gov. Jim Hunt, a 42-year-old Democrat whose stylish three-piece business suits and graying hair make him more the model of an IBM salesman than a determined foe of established interests.
Yet no one has been more outspoken and harsh about Vepco than Hunt, who, according to most accounts here, is likely to become the first man to be elected to a second, successive term as the state's chief executive. Assuming he wins renomination in a May 6 primary and reelection in November, officials of the Richmond-based utility can be assured of four more years of incereasingly pointed criticism from a man who flatly told Vepco to get out of his state.
Vepco, Hunt said in a widely applauded January speech, is "the leading cause of inflation" and "the barrier to economic development" in impoverished northeastern corner of North Carolina it serves. "That's why I believe Vepco should get out of North Carolina," he stated.
Despite strong opposition from Vepco, the governor has refused to retreat. Thursday he produced a new report from the North Carolina Public Utilities Commission and claimed that his plan would reduce the electric bills for Virginians as well as residents of his state. The "hard, cold economic facts" are "overwhelming evidence" that Vepco should leave the state, Hunt told a news conference here.
While it is easy to dismiss such comments as political rhetoric -- a position Vepco has taken -- it is also a mistake to classify Hunt as a latter-day Henry Howell. The Virginia populist's attacks on Vepco were largely oratorial and came from a man holding an office, lieutenant governor, that was powerless.
Hunt, however, has mounted a campaign that has both substance and rhetoric. Some items:
The Federal Power Regulatory Commission has agreed to investigate Hun't charges that Vepco's rates are out of line with those charged by North-Carolina-based utilities.
A wide range of public officials have been enlisted by Hunt to support the federal probe. Among them: Esther Peterson, President Carter's consumer advocate; Rep. Herbert E. Harris, a Northern Virginia Democrat, and the staff of the North Carolina Public Utilities Commmission.
Support for Hunt's call for Vepco to sell its North Carolina operations has come from the chairman of the state utilities commission, a body which last summer attacked the Richmond utility, cutting its rates and directing refunds to its Carolina customers.
Two North Carolina cities that operate their own electric systems are planning to sever their ties with Vepco and build lines to cheaper power from the Raleigh-based Carolina Power and Light Co.
In all, six electric cooperatives, who with the municipalities in the region serve more retail customers than Vepco itself, are holding talks with CarPower, seeking ways to get away from the Richmond utility.
A major industry in the Vepco-served North Carolina area is seeking state approval for a similar switch, claiming it could save $400,000 a year by buying Carolina Power electricity.
Vepco's chairman, T. Justin Moore, has admitted that Vepco's North Carolina rates are higher than those charged by the state's other large electric utilities and said that Vepco will attempt "to bring them closer to the rates of other North Carolina utilities."
None of this is bringing any smiles to Vepco executives, who have attempted to counter Hunt's campaign with a public relations effort of their own. But that effort, too, has seemed to plunge the utility into more troubles in the 22 counties of North Carolina it serves.
For example, when Vepco invited the region's legislators to Richmond to be briefed on the company's problems, it refused to allow reporters along, a step that infuriated Tarheel editors. The weekly Ahoskie News Herald fumes that the affair smacked of "heavy-handed lobbying techniques" and said, "The whole process seems typical of Vepco's cavalier -- no pun intended -- attitude about its North Carolina operations."
This section of North Carolina that Vepco serves is one of the poorest least developed areas of the state. A stretch of flat coastal plain, it is covered by sandy, gray soil, tobacco and peanut fields and few industries, an area that barely seems worth fighting for.
Nonetheless, Vepco is fighting Hunt's efforts, contending that the 60,458 retail customers it has there (5 perecent of the power company's total) would be ill-served by a Vepco pullout. We came into this area when no one else wanted to . . . and we intend to stay," said Randolph B. McIver, the company's Carolina vice president.
Hunt argues that Vepco is "the main culprit" behind the region's woes and cites figures, which Vepco disputes, showing that the 14 counties there served exclusively by Vepco gained only 5 percent in manufacturing jobs between 1975 and 1978, compared with a statewide gain of 12 percent. "That's intolerable and it must change," Hunt has said.
The governor blames Vepco's rates -- anywhere from 40 to 60 percent higher" than those charged by Carolina Power -- for the failure of business to locate in the area.
"We know that electricity can never go back to the one-cent-a-kilowatt days," Hunt said in a speech this month. "But we also know that it need not be as high as the Vepco sky, and we are going to continue to do all we can to help in that area."
While that might sound like vintage Howell to most Virginians, here in North Carolina, a state with a decidedly populist political tradition, Hunt clearly is in the mainstream. "The governors of Virginia have been . . . well, they go to the same clubs as Vepco," says Paul Essex, one of Hunt's top aides.
By attacking an out-of-state corporation, Hunt is facing less risk than he would be confronting either Carolina Power or the Charlotte-based Duke Power Co., both of which are extremely active in state politics, according to Thomas J. Bolch, a lawyer active in Democratic Party fund-raising efforts and general consul for the North Carolina Association of Electric Cooperatives.
What's more, the attacks on Vepco have helped make Carolina Power and Duke Power look relatively good, Bloch noted.
Indeed, by Hunt's figures they do look like a much better bargain for both residential and industrial customers. Hunt has produced figures showing that the typical homeowner using 1,000 kilowatts a month in 1978 should have paid Vepco 28 percent more than Carolina Power in the summer and 25 percent more in the winter.
The North Carolina Vepco homeowner would have paid an even higher rate than Duke Power customers -- 41 percent in the summer and, 33 percent higher in the winter.
But the worst difference, Hunt said, is for industrial customers, who had to pay 50 percent more than Duke Power customers and 37 percent more than Carolina Power customers.
Hunt is not the first Carolina politician to take on the Virginia utility.
As long as 20 years ago, then Gov. Terry Sanford was jousting with Vepco; Hunt's own campaign was preceded by that of a coalition of area chambers of commerce called Operation Overcharge, which argued that Vepco's rates were far too steep.
Those arguments were echoed last year in a major decision by the North Carolina Public Utilities Commission. The ruling, hailed as a landmark in the state, directed Vepco to cut its Carolina rates by $4.1 million a year and refund another $1.6 million to its customers.
The commission held Vepco guilty of poor management in allowing some of its coal-fired generating plants to deteriorate to the point that they could not be used to cut down on the use of more costly oil plants. The ruling, being appealed by Vepco, was the first ever by the North Carolina agency to penalize a utility for poor management.
Vepco's Moore has disputed Hunt's figures, agreeing that his firm charges more, but the difference, he said, is more on the order of 12.4 percent more for the typical industrial customer.
Regardless of this, Moore has argued that it would be folly for Vepco's customers to attempt to switch power companies. He cites a state study indicating that North Carolina's rapid growth may force Carolina Power's rate to equal Vepco's by 1983 of 1984.
That argument has done little to quell talk of pulling Vepco's plug in northeastern North Carolina. The town of Ayden has planned building a $1.5 million connector to Carlonia Power and Washington, N.C., a much larger community with 10,400 electricity customers, is considering a $6.5 million bond issue for its proposed linkup.
In all cases, the reasons for the planned switches are the same: money. National Spinning Co., a textile mill in Washington, N.C., with 1,500 workers, has claimed it could save $400,000 a year by dropping Vepco's "inferior and inadequate" service.
A number of the region's electric cooperatives began negotiating with Carolina Power after Hunt's attacks began and those negotiations are continuing, according to lawyer Bolch. Bolch, who has dealings with both Carolina and Virginia utilities, says he is sympathic to the Richmond utility's plight. The problems, he says, are "not the sort of thing that you can correct overnight."
To the North, Vepco is confronted by the Nuclear Regulatory Commission, which is constantly monitoring and closing the company's troubled nuclear generating plants, Boch said. And to the south, there is Hunt.
Should Hunt's effort to sever the power company succeed, Vepco's remaining Virginia and West Virginia customers would be saddled with underwriting the costs of the utility's costly nuclear power plants. That added cost could easily offset any temporary gain from the sale to Carolina Power, Bolch said.
North Carolina officials Thursday disputed Bolch's idea, saying the plan would infuse the capital-hungry Vepco with about $97 million from Carolina Power. They contend that Virginia Vepco customers would get a break, since their plan would cut down on Vepco's need to purchase extra power from other utilities -- power that usually is very expensive.
Sales of power company territory are exceedingly rare, but not improbable, Bolch said. The prospect of higher rates from Carolina Power, which is girding for its own expanded nuclear program, has troubled some here. But so has Vepco's own speckled past, Bolch said. "We've got to live in the present and Vepco may not make it to the '90s."