SITLA, utility are millions apart in power line price dispute

Published March 16, 2012 12:15 pm
Tooele County • Trust board to appoint hearing officer to decide the matter.
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The Utah School & Institutional Trust Lands Administration wants to bill Rocky Mountain Power $4.4 million for a power line crossing its lands and spoiling views and potential development values in rural Tooele County.

The power company says the price should be in the thousands, not the millions.

SITLA trustees on Thursday declined Rocky Mountain Power's request to let a court take up the dispute. Instead, the board decided to handle the price petition for the Mona-Oquirrh line — looping 100 miles from Mona through Tooele County to near Herriman — by appointing its own hearing officer.

SITLA's appraisals show the power company owing $4.4 million for crossing lands the agency intends to develop for high-end housing at the foot of the Stansbury Mountains east of Deseret Peak Wilderness Area. Rocky Mountain Power contends the value is just $70,000.

After the board rules on the price, Rocky Mountain Power could appeal directly to the Utah Supreme Court. But on Thursday, an attorney representing the company argued a lower court was the proper place for such a complicated dispute to start.

"It's just hopelessly complex," attorney Matt Moscon said. Going to court would allow him to question ranchers about their water rights and learn whether it's even possible for SITLA to develop the homes it wants, he said, while the SITLA process would limit the issues largely to the dueling appraisers.

The board met in closed session to consider its options, then unanimously decided not to shift the dispute to court.

The power line already is under construction and is meant to deliver a new supply to the Salt Lake Valley by next year. At stake is the price — not the fate — of that line as it crosses state lands. SITLA's administrators argue that the chain of 200-foot-tall towers diminishes the value of lands that otherwise would make prime view lots in coming decades.

"It's the last place within a 40-mile radius of the Salt Lake airport that's undeveloped and backs onto a wilderness," SITLA attorney Tom Mitchell said. "It did have unobstructed views."'

Rocky Mountain Power used two independent appraisers who reached consistent estimates far below a SITLA estimate that was based on "assumptions that are not supported and not consistent with professionally accepted appraisal methods," company spokesman David Eskelsen said.

"The appraisals are so far apart from SITLA's valuation," Eskelsen said in an e-mail, "we had no choice but to challenge their determination, because these costs will eventually be paid by customers through their electric prices."

Mark Burns, an assistant state attorney general advising the board, said it may be up to the board to determine what its contract with the power company means by "fair market value." SITLA could make a case that it's not what appraisers decide, he said, but what the agency is willing to accept.

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