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Dominion continues expansion one year after merger

Editor's note: Nearly a year into the merger of CNG Transmission/Hope Gas Inc. with Dominion, a new corporate culture is being formed. In part one of a three-day series, we examine one of the area's newest, and biggest employers from several points of view.

by Nora Edinger

REGIONAL EDITOR

CLARKSBURG -- Thomas Capps sometimes refers to Dominion as a big gorilla of a company.

The numbers back up Capps, president and chief executive officer of the Richmond, Va.-based corporation.

Dominion has 15,000 full-time employees, 10 percent of whom are in West Virginia. It has 4 million customers in five states, produces 19,000 megawatts of electricity annually, has 6,000 miles of power lines and 7,600 miles of natural gas pipeline, and has the nation's largest natural gas storage system.

In fact, following a January merger with CNG Transmission and Hope Gas Inc., Dominion became the fourth-largest energy company in the nation.

And it's getting bigger.

"Certainly, Dominion has been in a merger and acquisition mode," said Gary Sypolt, a senior vice president working out of Clarksburg. "It's a growing company."

In addition to the January merger with CNG/Hope, Dominion has a buyout pending on a Connecticut nuclear power plant. A new pipeline that will stretch from Clendenin to North Carolina, will also put it within fighting range of Duke Energy.

"We're trying to push forward from four," Sypolt added of the ranking. "Maybe we're pushing for one."

Historically, Dominion has shown itself able to thrive in a changing market, originating in 1789 as a rum transporter, according to Capps. In its early decades, Dominion dealt in street cars, street lights and magnetics before settling into the energy business by the early 1900s.

In contrast, CNG and Hope were byproducts of the federal breakup of the Standard Oil monopoly. The companies, which underwent name changes and various reorganization efforts over the years, have been operating in West Virginia since 1898.

Deep reserves, deep pockets

The financial side of Dominion's personality may be of most interest to West Virginians, although it's hard to say what the ultimate economic impact is.

First, there's direct employment. Robert Fulton, spokesman for Dominion's Clarksburg operation, said the company has more than 1,500 employees in state, with an annual payroll of more than $100 million.

Positions range from custodians to field workers to administrators to engineers to Ph.D.-level geologists.

"These are quality jobs, stable jobs," said Ben Hardesty, a Dominion executive who manages multi-state exploration and production of natural gas from Jane Lew.

Hardesty, a Shinnston-native, said the employment dollars flow out, as well.

"Sometimes you have a father and two sons and they have a company," he said of roustabouts, the free-lancers of the energy business.

He hires all sorts of small sub-contractors to handle the drilling of about 100 new wells each year and to do myriad other tasks such as reseeding grass and regrading land once a well is installed.

Other West Virginians, including a multitude of retired Dominion workers, are financially impacted through stock ownership.

Since the late January merger, Dominion stock has gone up by nearly 50 percent to about $60 per share, according to Todd Fulks, an investment representative with Edward Jones Investment in Clarksburg.

"The merger's not the only reason it has gone up," Fulks said. "If you had utilities in your 2000 portfolio, you've done well."

CNG/Hope stockholders' shares were mostly transferred to Dominion shares -- with an exchange of more than one Dominion share per CNG share, Fulks said. Some transfer was made in cash, as well, Fulton said.

Watchful eyes

As a big corporation, Dominion has drawn some equally big enemies.

One of the company's most formidable foes is the environmental movement. Dominion recently settled out of court with the Environmental Protection Agency concerning an air-quality lawsuit that involved such parties as the state of New York. The settlement includes a $1.2 billion expenditure to reduce emissions from its eight coal-burning plants.

"It's going to be pristine pure when we get done with it," said Capps, referring to the Mount Storm electricity-generating plant in Grant County, the only Dominion plant in West Virginia. "Once we get that plant finished (in 2002), our neighbors will be sending us Christmas cards."

Jim Kotcon would like to believe that.

Kotcon -- a Ph.D. biologist from West Virginia University who is tracking energy companies through the deregulation process -- fears today's mega-corporations will focus on keeping expenses down at the cost of the environment.

"They've never distinguished themselves as one of the environmental leaders," Kotcon said of Dominion. "They have emphasized producing low-cost electricity and have generally opposed pollution control until forced to do so."

Mount Storm -- which Dominion interests built in the 1960s -- particularly troubles him.

"That facility is one of the largest emitters and dirtiest plants in the Eastern United States," Kotcon said.

Nationally, Mount Storm is the 18th highest emitter of nitrogen oxides and 27th highest emitter of sulfur oxides, according to the EPA Aerometric Information Retrieval System Web site.

Bill Wilkinson, environmental compliance coordinator for Mount Storm, said things are changing for the better there, however.

Emission-cleaning devices agreed to in the settlement are being installed in all three smokestacks. They will use pulverized limestone and an absorption chamber to turn sulfur oxides into gypsum, which will be returned to Maryland coal mines to fill emptied cavities. Nitrogen oxides and particulates will be removed in a separate process per the agreement.

Union views

The company has also drawn a close look from various unions.

During the merger with CNG, negotiations broke down and union leaders are skeptically awaiting the end of their contract in April 2002.

"We're very cautious in dealing with Dominion at this point," said Charlie Rittenhouse, president of the United Gas Workers Local 69-2 of the Service Employees International Union.

Rittenhouse noted the unresolved negotiations left unionized employees without the early-retirement deal a number of management employees secured.

So far, both Rittenhouse and Fulton agreed, a number of union positions have been eliminated, but the employees who filled them have been moved into other positions, with the exception of a handful of part-time workers.

Dominion recently drew the ire of the United Mine Workers of America, as well.

In 1997, prior to the merger, Dominion pursued the use of Maryland coal to fire its Mount Storm plant, which burns about 3 million tons per year.

Rich Eddy, president of District 31 of the union, claims the decision, and the company's victory in an ensuing lawsuit, led to the closing of the Consolidated Coal Co.'s Potomac Mines and the loss of 350 jobs, Potomac conveyor belted coal from the mine directly into the plant and was Consolidated's third-largest producer.

Dan Genest, a spokesperson from Dominion headquarters, said the switch was based on economics. When the contract was up for bid, he said the Maryland mine proposed a 10-year contract and a lower price than Potomac's five-year bid.

Moving onward

While those inside and outside the company debate Dominion's pros and con, Sypolt said his vision of the future is clear.

"Dominion was a strong company. CNG was a strong company. Together, they're a stronger company," he said. "Dominion wants to be the winner and compete for that growth."

Regional editor Nora Edinger can be reached at 626-1403 or by e-mail at nedinger@exponent-telegram.com.

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