The savings are expected to flow to Utah consumers from a proposed 36-megawatt expansion of the Blundell Geothermal Plant near Milford that is projected to be completed by late 2009.

Once the expansion is finished, Utah consumers will get power from the geothermal plant for the cost of producing the electricity, said Leslie Reberg, the outgoing executive director of the Committee of Consumer Services. "Our calculations, and the calculations of our experts, suggest the future cost savings [for Utah consumers] will be approximately $32 million over the 30-year life of the plant."

In October, the committee filed an action with the Public Service Commission against PacifiCorp alleging that its owner, Scottish Power, used a clever income tax accounting ploy to over-collect at least $50 million from its Utah customers since 1999.

The committee's allegations were based on a 2003-2004 U.S. Securities and Exchange Commission audit of PacifiCorp, which does business in Utah as Utah Power.

The audit determined that PacifiCorp collected at least $225.7 million from customers throughout its six-state operating territory to pay its income taxes but was able to save that amount by filing a consolidated tax return for all of its subsidiaries.

"Utah's share of those monies [$50 million] needs to be returned to Utah ratepayers from whom they were wrongfully taken," CCS chairman Dee Jay Hammon said in a statement announcing the action against the power company.

PacifiCorp denied the CCS allegations and asserted the income tax costs it collected in rates were calculated in accordance with long-standing Public Service Commission practice.

The picture grew complicated last week when billionaire Warren Buffett's MidAmerican Energy Holdings Co. inherited the dispute with its acquisition of PacifiCorp from Scottish Power.

In an effort to settle the case, MidAmerican agreed to transfer its $12.2 million stock ownership interest in the Blundell geothermal property to PacifiCorp and promised to let Utah consumers benefit from a planned expansion of the property that will involve the drilling of additional steam wells in the geothermal field, constructing new generation facilities and adding a heat recovery unit.

"Expanding our clean energy resources will provide cheaper power for Utahns in the future," Reberg said. "Also, this settlement does not compromise any positions regarding the appropriate treatment of income tax expense in the future rate cases."

But MidAmerican Energy Co. president Greg Abel, who also will be doubling as PacifiCorp's chief executive, said there will be no cause for dispute in the future. He vows that in the future all the money that Utah Power collects from its customers to pay its taxes will go to meet that obligation.

steve@sltrib.com