Long ago, in an economic world far from the present, the engineers of Virginia Electric & Power Co. drafted a plan to provide the state with abundant electricity.
To supply Virginia's day-in and day-out energy needs -- what the engineers call "the base load" -- Vepco chose nuclear power and launched the biggest nuclear construction program of any U.S. utility.
For the hot summer days and cold winter nights when demand for power peaks, the engineers decided to turn a mountain valley in Southwest Virginia into the biggest power storage facility in the United States..
What happened to Vepco's nuclear plans already has become the story of what went wrong with nuclear power in the United States -- burgeoning opposition from environmentalists, staggering cost over-runs, unexpected construction delays, inexplicable operating problems.
A dream of cheap, clean, safe energy that was never to be.
Now, where Back Creek meanders past Lantz Mountain in Bath County, Vepco's second vision is fading.
The company has laid off three-quarters of the people building its Bath County Pumped Storage Project, mothballed an armada of earth movers and put half the dam project up for sale.
The most ambitious energy storage battery in the United States is on the verge of becoming the biggest white elephant in the electric industry, a $1.6 billion boondoggle-aborning, a facility that, as one Vepco man admitted in anonymous candor, "We can't afford and we don't need."
The scheduled completion date of the project has been moved back two years--to 1986--so Vepco won't be saddled with a power plant whose output it can't sell. The delay, however will add at least $233 million to the construction cost, and force Vepco coustomers to pay higher utility bills for the next 50 years.
Vepco executives staunchly defend both their decision to build the project and their decision to defer construction. "This is still the most viable alternative to imported oil," says Vepco's Senior Vice President Sam Brown Jr. Even tacking the extra $200 million onto the price tag, the Bath works is still the cheapest way to provide power for peak needs, Brown said.
But Virginia congressmen Caldwell Butler and Herb Harris and a coalition of Vepco customers in North Carolina have questioned the decision and asked the Federal Energy Regulatory Commission to determine whether it is in the best interest of Vepco's customers. Butler, the Republican who represents Bath County says Vepco's slowdown violates the license it got from FERC to build the project and has caused economic chaos in the rural area by unexpectredly throwing more than a thousand people out of work.
Vepco's Bath County project is no ordinary power plant. It uses more electricity than it produces, a concept that befuddles at first but makes sense in the context of consumption and production of electricity.
The greatest demand for Vepco's power is on hot summer days, when offices and factories are humming, every air conditioner in the Commonwealth is turned up to cold and Vepco needs every kilowatt it can crank out. Even on those days, electricity consumption drops dramatically when the 5 p.m. whistle blows and the commuters straggle home, leaving Vepco with surplus power at night.
But turning on and off a giant generator is not as simple as flipping a switch to start an air conditioner. Whether th plant burns coal, oil or uranium, you have to fire the boiler, build a head of steam and rev the turbine. That takes time, and like stop-and-go driving, consumes more energy than cruising along at a steady speed.
The project Vepco is building in Bath County is meant to average out the daily surpluses and shortages of power and provide economical, instantaneous electricity.
To do that, the power company is constructing two lakes, one about 1,000 feet above the other, on either side of Lantz Mountain. Connecting the two lakes are a pair of giant tunnels that come out of the bottom of the upper lake like the drain from a bathtub, bore horizontally through the mountain, then drop 1,000 feet straight down. At the bottom of the shaft Vepco is building a hydroelectric power plant.
Pull the plug in the tub and water polunges through the mountain to spin six turbine water wheels that convert the power of the falling water into electricity.
But Little Back Creek, the stream that feeds the upper reservoir, drys up to a trickle in the summertime, so the water coming down the mountain has to be caught in the lower lake and recycled. To do that, the turbines are literally run backwards and used to pump the water back up the hill.
The pumps consume almost half again as much electricity as the turbines produce, but the timing is what counts. The water flows uphill at night, when Vepco has power to spare and comes back down in the morning, when its energy is needed.
Back in the Sixties, when the Bath County job was conceived, Vepco was one of the fastest growing utilities in the country. Virginia's population was increasing, industrialization was bringing in factories that needed lots of electricity and air conditioning was changing from seeming a luxury to a necessity, pushing up the summer peak demand for power..
"We had a 10 or 11 percent growth rate," explained Vepco's vice president Brown. In 1972 the company applied to the Federal Energy Regulatory Commission -- which licenses power-producing dams -- for permission to build in Bath. Predictably the licensing process dragged on for two years, while consumption of electricity continued to grow. In 1974 Vepco began moving equipment and people into Bath County, to stand by and be ready to go when the license was issued.
Then the Arab oil embargo hit, the price of oil quadrupled, the growth in energy use began to slow and the Bath County application was put on hold.
In 1975 Vepco took another look, determined the Bath County project would save customers $20 million a year over the cost of burning oil for peaking power and decided to keep going. A year later the engineers went over the numbers again and figured that pumped storage would be $50 million a year cheaper than oil.
By the time the FERC license was issued in January 1977, Vepco's growth rate was down to 6.5 percent a year but it looked as if additional peak power capacity would still be needed in 1983 or 1984 -- the earliest the Bath works could be completed. The company decided to go ahead.
In three years, Daniel Construction Co. and a platoon of subcontractors set productivity records and completed half the work. But Vepco's customers set conservation records and slashed the company's growth rate by more than 50 percent to about 2.9 percent a year.
"The load growth was going down, the economy was slumping," said Brown in a recent interview in Vepco's executive offices high above Richmond. "We really had serious concerns about whether we would need it in '83 and '84, so we went looking for a partner, still pursuing an '83-'84 schedule."
Early this year Vepco offered to sell half of the Bath County project to two neighboring utilities, American Electric Power and Allegheny Power Systems, both of which had announced plans to build their own pumped storage reservoirs.
The potential partners "were not interested in '83 and '84," Brown explained. "We didn't need it at that date and the other companies didn't need it until '85 or '86."
As the need for the Bath County project faded, so did the prospects of paying for it. Troubles with its nuclear plants were making Vepco customers pay record electric bills, but the company's profits were declining, and Vepco faced another major expense.
About the same time they first drafted the nuclear-plus-pumped-storage strategy, Vepco's engineers also decided to convert the company's coal-burning power plants. Coal is abundant in Virginia, but coal is dirty and deadly. Militancy among miners was making supplies uncertain and prices unpredictable. Oil was clean to burn, cheap to buy and Vepco could import all it wanted.
The same staggering oil price hikes that crippled Vepco's growth rate and aborted Bath County threatened its oil burning power plants. Even if the company -- or its customers -- could afford $33 a barrel imported oil, the government wouldn't let them burn it. The Carter administration's coal conversion plan came up with a list of oil-fired power plants that had to be switched to coal, and Vepco had more plants on the list than any other utility.
Brown said Vepco officials decided earlier this year they could not afford to spend the money needed to convert the oil-burning plants back to coal and at the same time continue construction in Bath County. They decided to cut $275 million from the Bath County budget in the next two years.
That decision to save $275 million in the short run will add $233 million to the cost of the Bath project in the long run, he acknowledged. Work on the project will not be stopped entirely, because Vepco discovered that would cost even more, an estimated $500 million.
But Vepco's customers will still pay a heavy price for the deferral. The company will have to spend an extra $7 million just in maintenance bills. Vepco will have to pay $28 million in penalties and restart fees to contractors and suppliers. Inflation in two years will tack $77 million onto the bill, and Vepco will have to pay an additional two years' interest on the more than $1.5 billion cost of the project, another $154 million.
Vepco officials acknowledge, however, that the decision will have a brutal effect on the economy of Bath County. "The implication to that part of the community was well recognized by us," Brown said. "I've never tried to tell anybody it wasn't very hard on them."
Vepco's best hope for the Bath County project is still to find a partner to buy half of it.
Playing an unusual role as marriage broker, FERC officials have told congressman Butler they will discuss the deal with American Electric Power and Allegheny Power System, the two utilities that earlier this year turned Vepco down.
Both companies expect to need additional peak generating capacity by the end of the decade, both want to build their own pumped storage project, but both have run into opposition from environmental groups.