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State Attorney General talks business
Cuccinelli discusses rising power rates, uranium mining
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State Attorney General Ken Cuccinelli discusses the challenges and issues affecting Southside Virginia businesses during a roundtable discussion Wednesday with about 20 local government and business leaders at the Virginia Museum of Natural History. (Bulletin photo by Mike Wray)

Thursday, October 4, 2012

By MICKEY POWELL - Bulletin Staff Writer

Rising electricity costs are hurting efforts to attract companies to Virginia, according to state Attorney General Ken Cuccinelli.

The increases are largely due to a growing number of federal rules aimed at reducing pollution stemming from electricity production. Cuccinelli said there must be a balance between environmental protection and keeping electricity affordable for residential and commercial customers.

The Republican, who is seeking to run for governor next year, made his comments during a roundtable discussion with about 20 local business leaders and government officials at the Virginia Museum of Natural History on Wednesday.

During the event, John Parkinson, chief executive officer of Drake Extrusion, said one of the reasons his company located in Henry County was low power costs. However, Drake’s power costs have doubled in the past five years, he said.

Cuccinelli said the last base rate increase for Appalachian Power — which supplies electricity to Henry County homes and businesses — was aimed at generating an extra $85 million over two years. About $56 million of that was to cover costs of complying with new environmental rules, he said.

“And there’s more (regulations) coming” in the future, he said, adding that President Barack Obama has “promised to bankrupt” entities that generate power with coal due to concern over environmental effects of burning the sedimentary rock. About 45 percent of the nation’s power is from coal.

With high unemployment and other economic problems in Southside, rate hikes hurt residents and businesses here more than those in areas more wealthy, such as Richmond and Northern Virginia, Cuccinelli indicated.

Environmental rules are “doing a number on us down here” and wipe out opportunities to attract companies needing a lot of power, Cuccinelli said.

He said that although he is from Northern Virginia, he cares about — and wants to help — all areas of the state, including Southside.

Cuccinelli asserted that he is fighting electric rate hikes. Still, he said the federal government has the right to impose new environmental rules and energy companies have the right to recoup their costs for complying with those rules through higher rates.

The possibility of uranium mining eventually being permitted near Chatham, if the General Assembly reverses a ban in effect since the early 1980s, was another hot topic of discussion during the roundtable.

Uranium mining could open up opportunities for small businesses, said Dick Ephgrave, director of the Longwood Small Business Development Center.

He said, though, that until he sees “a credible report” from a nonpolitical, impartial entity on effects that mining would have on public health, he does not support lifting the ban, and he thinks most people feel the same way.

Cuccinelli agreed, citing a need for “getting objective data” and seeing how it is collected so its validity can be tested.

Parkinson has been involved in local economic development efforts. He said it would be “a really tough sell” to get a company to come to an area with a uranium mine, or even one where there is controversy over a potential mine.

“It’s probably the worst thing” for Southside right now, Parkinson said.

Cuccinelli said “people on both sides (of the issue) are frustrated with me” because he has not yet taken a position on uranium mining.

Perhaps some draft regulations could be developed for both opponents and supporters “to pick at” before lawmakers consider reversing the ban, he said.

To make things easier, “let’s at least all be talking about the same set of facts,” Cuccinelli said.

“Better policy would be achieved,” Parkinson said, “by people cooling their jets and waiting” until more information on effects of mining is available.

Jay Edelen, whose firm runs an online cabinetry hardware business, asked if a sales tax will be imposed on Internet-based businesses in Virginia.

“For small companies like us,” Edelen said, “it would be very burdensome” and hurt business.

People in the Northeast who pay retail sales taxes of 8-10 cents per dollar are “more than happy” to order from his business online to avoid paying any sales taxes, he said.

Ephgrave said he has heard the state may lose as much as $500 million annually by not charging an Internet sales tax. He said he does not think many state governing panels would pass up the opportunity.

Cuccinelli said that if the state starts charging such a tax, it probably would be “part of a package” of new taxes but it would be simple to administer.

He agreed that the tax could hurt commerce.

“We have a lot of Internet-reliant companies” in Virginia compared to most states, he said.

Responding to questions from participants, Cuccinelli said he favors keeping higher education affordable and does not favor generally allowing gambling in Virginia, but he thinks charities should have some flexibility in finding ways to raise money.


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