Virginia State Sen. Nathan H. Miller, the Republican nominee for lieutenant governor, has received at least $250,000 in legal fees during the last seven years from the state's electrical cooperatives while drafting and then voting for legislation that has given the co-ops tax breaks and business advantages totaling about $13.2 million.

As a lawyer for two organizations that lobby in Richmond for the co-ops, Miller drafted at least a dozen bills for his clients that were later introduced by other legislators -- lawmakers who were sometimes unaware that Miller had drawn the measures. Miller, the Senate's recognized authority on utility law and cooperatives, acknowledged in an interview that he sometimes sought to convince other senators that the measures were needed and that he voted for the bills in committee and on the senate floor without disclosing that he wrote them.

Virginia law does not prohibit lawyer-legislators like Miller from voting on bills that may affect themselves or the clients they represent. The rules of the state senate, however, bar members from voting on any matters in which they have an "immediate, private or personal interest."

"To me, there's no conflict of interest," Miller said in an interview with The Washington Post. During the interview he vigorously defended his relationship with the cooperatives and said that such alliances with business are common among Virginia's 140 legislators. "It's in the eye of the beholder. And I'm sure there will be plenty of people that will say it's a conflict of interest, because they're cynical and don't believe a person can wear two hats."

It is the "two hats" Miller wears -- one as a state senator from the Shenandoah Valley and one as a utilty lawyer -- that allow him to accept an $8,000-a-year state salary at teh to accept an $8,000-a-year state salary at the same time he is receiving $80 an hour in legal fees and monthly retainers from the cooperatives, his biggest legal clients.

His legal fees from the co-ops last year authoritatively have been placed at $70,000 and include monthly retainers of more than $500 for representing the Virginia, Maryland and Delaware Association of Electric Cooperatives and the Old Dominion Electric Cooperative, two groups that lobby in Richmond.

As general counsel for these two groups, the 38-year-old Miller represents all 15 of Virginia's rural electric coopeatives --nonprofit, consumer-owned organizations that provide electricity to about 10 percent of the state's power customers. Since the cooperatives are part of a heavily regulated industry, they are constantly seeking favors from the state legislature, including tax breaks and decreased regulation from the State Corporation Commission, which governs them as well private utilities.

Miller denies that his retainers, which he receives from the co-ops even during the General Assembly session when he is performing relatively little legal work for them, amount to payment for lobbying in Richmond. "I am not paid as a lobbyist," Miller said. "I am not a lobbyist. I'm wearing these two hats."

Co-op officials make clear that when they hired Miller to represent them they were counting on him to promote their measures in the General Assembly. "It's just like any employe. It's part of his job," says Mark McNiel, an Old Dominion director who suggested Miller apply for the legal position in 1974. "If he can help us [in the General Assembly], he's suggested to."

Among the bills that Miller drafted for the co-ops was one, passed in 1978, that drastically reduced the state tax on the co-ops' gross recipts. This handed them a savings o approximately $3.2 million during the first year and promises even greater savings in the future.

The co-ops recruited Sen. Howard P. Anderson (D-Halifax), to introduce the measure, but Anderson said he was unaware, until contacted by a reporter, that Miller had written the bill for the cooperatives. "I didn't know that," Anderson said. "That could be why he didn't introduce it, don't you think?"

Miller said he preferred to have other legislators introduce his bills, not because of a conflict of interest, but because he believed a Democratic sponsor would probably have a better chance of pushing the measures through the Democrat-controlled General Assembly.

Another Miller-drafted bill, passed in 1980, gave the co-ops a $10 million tax advantage in a proposed purchase of Virginia Electric and Power Co. generating capacity. During the same period, the co-ops were paying Miller to represent them in the Vepco negotiations.

Both the measures passed without a single dissenting vote.

Miller acknowledged in the interview that he helped save the co-ops bills, but he said the $70,000 he receives annually from the co-ops has had no influence over his decision to promote and vote for the bills he drafted.

"This is no different from the dentist that comes in and says, 'Nathan, this bill has been drafted and it's introduced and I'm your client, but I think you ought to support this bill,'" Miller said. "The only difference between repesenting another client and this particular client is that I drafted the legislation."

Under the Virginia Senate's rules, it is up to every senator to decide whether he is in a conflict of interest over any measure. The provision, called Rule 36, carries no penalities and has never been invoked in disciplining a senator.

Miller said in the interview he does not recall ever abstaining on any of the scores of utility matters that have come up since he began working for the electric co-ops in 1974. The only time he could consider such a step, he said, would be when a bill "affected me directly . . . if all of my income came from one company [affected by the legislation].I could see there the immediacy.

"But if I started invoking Rule 36 on legislation that affects a client that I have, I [wouldn't be able to] vote in the senate of Virginia," Miller said.

Nor would he abstain, Miller said, if he were elected lieutenant governor and were asked to cast a tie-breaking vote in the senate on one of the bills he drafted for the co-ops. "I see myself governed by the rule of honesty, fairness and what I think is right, and I see no reason to be any different tomorrow than I am today in that respect," Miller said. "My price is no different tomorrow than it is today -- too high to be bought."

Miller also said that his represenation of the co-ops before the State Corporation Commission is not a conflict of interest. Miller, who during his past six years in the Senate has helped elect all three members of the SCC and set its budget, regularly appears before the agency on behalf of the co-ops, arguing that they should be granted rate increases and be freed from extensive regulation.

"I don't have any objection to telling the people of Virginia who I represent," Miller said. "They certainly have to be the judge. But they should remember that if they want a citizen-legilature, a part-time legislature, and they don't wnat a congress or a full-time legislature with staff, then there is going to be the ncessity of their citizen legislators to make a living."

The story of how Nathan Huff Miller became involved with Virginia's electric cooperatives can be traced through interviews with dozens of his associates and through General Assembly's records.

It began nearly eleven years ago when Miller, then a boyish 27-year-old graduate of Richmondhs T. C. Williams School of Law, was hired as an associate at a respected Harrisonburg law firm.

Miller, who grew up on a nearby turkey farm, had already made a name for himself as an offensive lineman at nearby Bridegwater College and as a teacherat a local elementary and Sunday school.

In his legal work, Miller distinguished himself by regularly working 15-hour days, doing what he was told, and being pleasant to everyone. He spent most of his time doing the onerous chorces nobody else wanted to do: wills, deeds and title researches. As a reward, Miller was named a partner in the law firm a year before the end of the customary five-year probabtion period.

In autumn 1971, five weeks before the General Assembly elections, the local GOP candidate for the house of delegates dropped out of the race. The local party chairman turned to Miller, who had nnever participated in Republican politics, and ask him to enter the race. He did, campaigning doggedly, and winning with 63 percent of the vote.

Reflecting the views of his largely conservative district, Miller did not sponsor many bills in his first two years in Richmond -- a pattern he was to follow throughout his legislative career.

Fellow legislators describe Miller as a pleasant, inoffensive fellow who seldom speaks in committee or on the floor, does little socializing and has few close friends. He puts a high priority on serving constituents, works hard and keeps to himself, his colleagues say.

Upon the retirement of the general counsel for the Virginia, Maryland and Delaware Association of Electric Cooperatives in 1974, Miller was offered the job by Charles C. Jones, the group's executive vice president and lobbyist. Jones says Miller's position in the legislature in no way influenced the association's decision to hire him. He says he approached Miller because he was looking for a lawyer with co-op experience, and because Miller's father Garland, a director of the Shenandoah Valley Electric Cooperative, put in a good word for him.

Miller then had had no experience in representing co-ops, but Jones says his "family exposure" to co-ops more than made up for that.

Miller was uncertain about the appearance of conflict and asked a senior law partner, Donald D. Litten, whether it would be proper for him to accept the cooperatives' offer. Litten told him that there should be no problem because the co-ops make no profits and do not compete with the Harrisonburg Municipal Electric System, which the law firm represented. Miller accepted the job, at a retainer of $250 a month plus hourly billings. He later accepted a similar offer from Old Dominion Electric Cooperative, an offshoot of the association.

In 1975 against the advice of friends, Miller challenged State Sen. George Aldhizer II of Harrisonburg, the Senate's second-ranking member. Aldhizer remembers that Miller made utilties the central issue of the campaign and frequently critized him as a "tool of Vepco" because Aldhizer's law firm was on a $100-a-month retainer to the electric utility.

Miller recalled making an issue of the fact that Aldhizer represented the local telephone company before the SCC on a rate increase -- although Miller says he never implied there was anything wrong with Aldhizer's role. Miller upset Aldhizer, a Democrat who had served five consecutive terms, with 59 percent of the vote.

One of Miller's first duties as the cooperatives' lawyer was to assist in negotiations between Old Dominion and Vepco over a co-op proposal to buy a portion of the North Anna nuclear power plant's generating capacity. After offers and counter-offers, the negotiations bogged down.

By 1976, individual cooperatives had begun hiring Miller as their counsel in rate hearings before the SCC, pumping thousands of dollars into his law practice. Before, long, cooperatives had become his largest group of clients.

In December of 1977, members of the association of electric cooperatives met in their Richmond headquarters and decided to ask the General Assembly for a tax break. They settled on a plan that would allow them to deduct from their taxable gross receipts the amount of money they spend every year to buy power from Vepco and other in-state generators of electricity.

They argued that the tax reduction was necessary because it would eliminate "double taxation" on the vepco power, which was taxed once by the state when Vepco sold it to co-ops and again when the co-ops sold it to their consumers.

After the meeting, association lobbyist Charlie Jones called Miller and asked him to draft two bills. The first was a narrow measure that would have benefitted only Old Dominion, and the other a broad bill that would bring more than $3 million in tax breaks to all the state's cooperatives. Miller drafted the bills.

Jones, in turn, asked Sen. Howard Anderson (D-Halifax), a senior member of the Senate Finance Committee, to sponsor the more limited bill, which ws becoming known as trhe "Old Dominion" bill. Anderson said nobody had ever complained to him that co-ops were victims to double taxation, but representatives of the two electric cooperatives in his district spoke to him about it and he agreed to sponsor the measure.

Cooperatives put out the word to other legislators from districts with co-ops and soon there were five other names on top of the bill. These legislators later said they didn't really know much about the measure either, but put it in at the request of the co-ops.

Before the bill was considered, Jones visited all 15 members of the finance committee to explain it and no one raised any objections -- in part because Anderson was sponsoring it and in part because few saw it as controversial.

Jones and Jordan testified before the finance committee, but there was no other testimony and almost no discussion. It cleared the committee and the floor with no dissenting votes.

Jones and Jordan next argued before the House Finance Committee that the measure should be broadened to include all electric co-ops and committee members, hearing no objection from the SCC or Department of Taxation, agreed. But House Finance Committee Chairman Archibald A. Campbell wanted the bill to be amended so that it wouldn't affect the current state budget.

This was not something that Jones and Jordan had anticipated, Jordan said he raced upstairs to Miller's office to get his help redrawing the bill. With Jordan and Miller huddled over Miller's desk on the third floor of the General Assembly Building, and Miller put in the language necessary to meet Campbell's objections.

The amended bill passed without dissent both in the House committee and later on the House floor. Later, Miller joined 38 other senators to approve the amendments he wrote.

In December of 1979 Old Dominion Executive Vice President Ernest M. Jordan asked Miller to draft legislation that would exempt Old Dominion from SCC regulation in the sale of power to electric co-ops. Without a change in the law, Old Dominion would have had to pay $50,000 or more annually to prepare rate cases for argument before the SCC. Miller drafted the bill.

Also that fall, Jordan decided to seek legislative approval for a plan that would give the co-ops and Vepco a substantial tax break if they went through with the proposed North Anna deal. He proposed a bill that would exempt Vepco from paying approximately $10 million in gross receipts taxes on the proceeds from the sale.

Jordan said Vepco had made it clear that without the legislation Miller was drafting the co-ops -- not Vepci -- would be responsibile for paying the $10 million tax.

Sen. Dudley J. (Buzz) Emick (D-Botetout) introduced the tax break bill at the request of Vepco lobbyist E. L. (Bill) Crump. Emick says Crump told him that the bill was designed to revive Vepco's financially troubled Bath County pump-storage project in his district by encouraging another power company to buy a portion of the project.

Crump did not tell Emick, as the senator recalls it, that the bill orginated with the co-ops, nor did he tell the senator about the million-dollar savings it would grant Vepco and the co-ops once the North Anna deal was completed.

Meanwhile, Jones took Miller's deregulation bill to De. Lewis Parker (D-Mecklenburg), the chairman of the House utility subcommittee, and asked him to sponsor it. Parker agreed.

It took only a week for the deregulation measure to win 19 to 0 approval from the House Corporations Committee and less than a week later it was approved 97-0 by the full House.

In the Senate, the deregulation bill was referred to the committee on Commerce and Labor -- one of the three committees on which Miller serves and the one that he calls his favorite. Miller voted for the bills, both in committee and on the floor.

At the same time, the tax break bill that Emick was sponsoring won the approval of Senate commerce and labor without discussion. The bill sped along, following the established pattern: the sponsor presented it to Senate and House finance; the chairman leaned over their desks and asked SccY and Department of Taxation representatives whether they had any objection to it; and hearing none, the panels sent the bill to their chambers with a single dissenting vote. Miller joined a 39-0 Senate vote in its favor, and three weeks later the House followed with a 93-0 vote.

During the past 1980 session, Miller voted against a controversial ethics bill that would have strengthened the legislature's conflict of interest regulations and established disciplinary procedures for members who violate those regulations. The bill passed the Senate, but died later in a House committee.