For hard-working people in this tiny Bath County settlement, just miles away from an electricity generating plant that can move water at the same rate as it pours over Niagara Falls, good things don't come easy and don't last long.
"All good things have to come to an end," said Julian Hiner, the latest owner of Hiner's Grocery, which was started by his family in 1925. "It's nice that business stays up, but you can only take the pressure that long, and then it gets the best of you."
At the height of construction on the Bath County plant, which was begun in 1977 and is now jointly owned by Virginia Power and the Allegheny Power System, Hiner tripled his sales of everything from cigarettes to laundry detergent. "I had to open at 3 a.m. and stay open to 8 p.m.; now I open at 4:15 and stay till 7 p.m."
The project that steadily employed some 3,400 workers at its peak "put a lot of money into the county," said Hiner. "Of course, it's had a lot of problems."
First, in the late 1970s, Virginia Power encountered higher oil prices as a result of the oil embargo; high capital costs; and a consequent decrease in the demand for electricity. The company pushed back the plant's completion by two years, laid off thousands of workers and decided there was no way it could use all of the plant's 2,100 megawatts of generating capacity.
In 1982, Virginia Power found a partner. Allegheny Power System, parent of three utilities in Maryland, Pennsylvania and West Virginia, now owns 40 percent of the project.
But then, the largest pumped-storage plant in the world ran into another problem: high water pressure inside the mountain upon which it is built, necessitating an extra $64 million of work to stop dangerous water seepage into the mountainside and delaying the start of the plant's operation by eight months.
Now, tens of millions of dollars will be passed on to consumers in order to begin paying for the $1.7 billion plant.
Rate cases are pending or have been decided before the public service commissions of Virginia, West Virginia and Pennsylvania. A $20 million increase already has gone into effect for customers of Potomac Edison, an Allegheny Power System utility serving Western Maryland.
Last week, the Virginia State Corporation Commission gave the company about $101.8 million in rate increases to begin paying for the plant. Utility rates, however, will decrease by 1 percent across the board because the cost of fuel the company buys to generate electricity has dropped by a total of $125.7 million over the past year.
The plant, which began operating in December, has radically different implications for Virginia Power than for Allegheny Power's three utilities, Potomac Edison, West Penn Power Co. and Monongahela Power Co., because of different generating needs, experts say.
In Virginia, the SCC has supported the project because it believes it is an efficient way to meet times of heavy electricity demand, usually on hot summer afternoons.
The plant uses two reservoirs, one high above the other, to generate electricity. At times of heaviest electrical use, water is allowed to flow through massive tunnels and spin generators to make electricity as it rushes down the mountain. At night, the turbines pump water back to the upper reservoir.
In his recommendation to the SCC, hearing examiner Russell Cunningham said, "The testimony is overwhelmingly and unchallenged that the Bath County project was prudently conceived, efficiently constructed, and brought into service at a reasonable cost."
But the same set of conditions don't apply to the Allegheny Power System. Electric customers, consumer advocates and public-utility commission staff members in various states charge that Virginia Power unloaded a white elephant on Allegheny Power's already bloated generating capacity. They fear that rates will mushroom as a result of paying for the expensive plant. Rates in West Virginia, for example, could rise by about 25 percent. Engineering Problems Criticized
Some critics also fret that the plant's engineering problems may be far from over and are concerned about protecting rate payers.
Technical problems at the plant began last year.
As plant operators filled one of the three massive tunnels with water from the lower reservoir in March 1985, water began to leak, filling crevices in the rock surrounding the tunnel. Water pressure built up around the tunnel, causing a depression in an adjacent empty tunnel.
Officials immediately undertook an intensive program of injecting grout into the mountain's crevices. The company proceeded to extend the drainage tunnel system near the powerhouse and installed equipment to monitor pressures, while the Virginia SCC retained Shannon & Wilson, an engineering consulting firm, to monitor the project.
"The system is not designed to be watertight," said Ronald H. Leasburg, vice president of engineering and construction. "But the rock turned out to be more permeable than we thought it would." The company was concerned that the seepage would destabilize the mountainside and cause minor landslides.
"If you had a landslide, you would reduce the amount of earth over the tunnels," he said. "We didn't want to do anything like that because you depend on the [earthen] cover to maintain the water pressure in the tunnel."
A landslide would not endanger the powerhouse, officials say, but would cause "excessive leakage" and make the project "uneconomical."
As luck would have it, high pressures built up again in January.
"We were getting close to a lifting of rock under pressure," said John Targett, resident engineer for Harza Engineering Co., the original designer of the plant. The company rushed to drill 63 relief wells, which look much like giant water faucets, along the mountainside. Officials now say pressures have dropped to reasonable levels and are continuing to fall.
Nevertheless, a few problems remain. According to state regulators, pressures external to the massive tunnels are still too high to be able to empty a tunnel of water without crushing it. That could be important if repairs to the tunnels need to be made. "There is concern if they de-water one tunnel if the pressure is still there, it will cave [it] in," said one engineer at the West Virginia PSC.
The only way to safely drain off water is to empty all the tunnels at once, and then "it doesn't take many days to get into a lot of expense of lost production," he said. "You've got to keep the water flowing; it's going to be a long-term problem for them, and when is it going to erupt?"
However, R. B. Peck, a consultant on the project, said the problem represents "no operational difficulty." Needing to drain the tunnels would be highly unusual, he said. Other experts say if generating units need fixing -- as two out of six have -- special valves at the powerhouse can shut off the waterflow to them.
"My present feeling is we have essentially got it licked," he said. "Some slopes are more stable than before the project was built."
Nevertheless, in Virginia, "We want the rates subject to a refund for some time until we know the plant is operating sufficiently," said Anthony Gambardella, senior assistant state attorney general.
As far as Virginia Power President Jack Ferguson is concerned, "We are almost 100 percent confident those problems are behind us . . . . We don't foresee the need to shut down and do additional work on the tunnels." Uses More Than It Generates
Even though the plant actually uses more electricity to pump water up the mountain than it generates, it is economical because it displaces more costly forms of electricity obtained from burning oil or coal during the times of heaviest electrical use, Ferguson said. The plant, according to Virginia Power, will save customers $60 million a year and gives the utility a comfortable reserve generating margin of 26 percent.
Klaus Bergman, president of Allegheny Power System, said the utilities it owns cannot generate electricity quickly during peak-usage periods except " at coal-fired plants, which take anywhere from 12 to 24 hours to get started." The cost of the Bath County facility, which can generate electricity within four minutes, was a little less than half of what it would have cost to build a plant to burn coal, he said.
But some experts say the Allegheny Power System needs Bath County as much as it needs a hole in the head.
"Allegheny Power System has more than enough capacity for years to come, and our opinion is they bailed out a bad deal -- Virginia Power built a white elephant and APS was doing fairly well, and helped out a sister power company," said Lee Feinberg, a Charleston, W. Va., lawyer representing industrial customers, among them Wheeling Pittsburgh Steel Co. and Corning Glass Works.
"There were studies done that showed they could purchase capacity in Pennsylvania that wasn't needed back in 1982 -- it's clearly uneconomical," said Randy Falkenberg of Kennedy & Associates, an Atlanta consulting firm that evaluated the project for large industrial customers.
"The whole thing is very peculiar; it stinks," said Joseph M. Cleary, a vice president at Airco Industrial Gases, a New Jersey company with plants in APS' service territory. Cleary said rate payers will end up paying $95.68 per kilowatt-hour, including capital costs, instead of the 3 to 4 cents per kwh of electricity Allegheny Power System could have purchased from neighboring utilities.
Pennsylvania attorney John A. Levin concluded in his main brief to the public service commission, "Essentially, none of Bath's generation is being used for serving West Penn Power customer load, and essentially, none will be used for at least four to five years."
Consumer advocates in West Virginia, where Monongahela Power Co. is seeking an increase based on the plant's construction costs, say the same thing. "We are opposed -- it's both excess power and rate shock," said Steve Hill, a financial analyst with the West Virginia PSC.
Allegheny Power System's Bergman said excess generating capacity in the Allegheny Power System as a whole hovers at 35 to 37 percent, including that from the Bath County plant. "We want an absolute minimum of 25 percent and are far more comfortable above that," he said. Although the company could have purchased power from other utilities, Bath County was still the most economical way to meet times of peak electrical demand, he said.
"This is a battle. Industrial customers are trying to cut their costs; they are trying to say, 'Worry about five years from now five years from now.' The trouble is, the lead time on coal plants is eight to 10 years."
The effects of the plant on Bath County itself are straightforward. Unemployed construction workers who labored on the plant say it was a good thing. "For the power supply and peak power, they needed it," said Mike Wilson, a Covington resident. "The only thing I don't like about it is the customers are going to have to pay for this."
Urban O. (Jake) Cleek, Bath County Board of Supervisors chairman and owner of a hardware store in Hot Springs, has no doubts. "Let's face it, Bath County was one of the poorest communities in the state. It provided a lot of job opportunities." The plant created jobs for some 25,000 people, doubled the tax base and bolstered businesses, he said.
"Hardware goes up, and people come in and say a $1.99 hammer cost $1.59 last year. Every time you have a rate increase people are going to scream, but the plant is to satisfy our conveniences -- we all want electric heat."