Virginia Electric & Power Co. said yesterday the company will ask shareholders to approve a major restructuring that would make Vepco's electric business and its gas distribution division subsidiaries of a newly formed holding company.
The utility said it was making the changes to streamline operations and to make it easier to operate nonutility subsidiaries. But Vepco said that for the time being it is only interested in utility-related businesses, including developing a coal pipeline and exploring for natural gas.
"These activities constitute different businesses with different operating requirements, different risks, different markets, and different financial needs and opportunities," President William W. Berry said.
"In many cases, they can be pursued more effectively--with greater efficiency in the use of resources, high productivity and lower costs--as separate companies," he said.
The new holding company, if approved by shareholders at a meeting April 20, will be named Dominion Resources Inc. The Vepco board of directors will become the holding company's board, and key Vepco officers will serve as officers for the holding company.
In addition to the electricity subsidiary and the gas distribution subsidiary, to be called Virginia Natural Gas, Vepco will establish a subsidiary known as Dominion Resource Services, which will provide staff services to the holding company and its other branches.
Vepco officials said the reorganization will make Vepco's structure more typical of utilities in Virginia, but will have no direct impact on Vepco and Virginia Natural Gas customers. The utilties will continue to be subject to the same regulation as before, they noted.
The reorganization must be approved by two-thirds of Vepco's shareholders. If that approval is granted, the reorganization is expected to occur about May 20. Vepco stockholders will exchange every three shares of Vepco stock for two shares of Dominion Resources stock. At the time of the exchange, the total value of shares exchanged will be the same, the company said.