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Millions could be at stake in power-line fight in Legislature

Published March 12, 2014 7:24 am

Legal • Battle pits nuclear, solar power developers against transmission-line builder.
This is an archived article that was published on sltrib.com in 2014, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

The builders of a $3 billion transmission line are threatening to sue over a bill in the Utah Legislature that would force them to carry power for others, including a proposed nuclear power plant near Green River.

TransWest Express, which is constructing a power line from Rawlins, Wyo., to Las Vegas, has hired an army of prominent lobbyists to beat back the measure that they say is unconstitutional but could nonetheless threaten to derail the entire project.

"It's a very real risk," said Roxane Perruso, vice president and general counsel for TransWest Express. "If the Senate passes this bill, they pass a lawsuit. … We would have no choice to challenge the bill in court."

At issue is HB44s2, which would require TransWest to sign agreements guaranteeing Utah electricity generators the right to jump onto TransWest's 3000 megawatt line when they see fit. TransWest would have to strike the agreements before it could get the permits to build the line across the state.

One of those generators and a chief proponent of the bill is Aaron Tilton, president and CEO of Blue Castle Holdings, which is laying the groundwork for twin nuclear power plants near Green River.

"I believe [HB44] is in Utah's best interest, because it provides access to the grid for some very large renewable energy projects, specifically solar projects," said Tilton. "I think it's unfortunate the focus is on Blue Castle because the solar projects are fairly significant for rural Utah, for economic development, for clean energy."

Blue Castle is in the process of preparing permit applications to submit to the Nuclear Regulatory Commission. It would optimistically be years before the project is approved, built and running.

A pair of Utah solar power projects also could benefit from having an on-ramp to the massive power line, which has been in the works for years and is expected to come on line in 2017, moving power, in part, from a major wind project in Wyoming to customers in California and the Southwest.

"If a transmission line is going through the state, there should be an on-ramp or off-ramp in the state," said Josh Case, CEO of Energy Capital Group, which is building a 300-megawatt solar project near Delta.

TransWest, an affiliate of the Denver-based Anschutz Corp., plans to build an on-ramp near Delta once market demands merit the $250 million to $500 million expense.

The bill, sponsored by Rep. Steve Handy, R-Layton, passed the House 50-22 three weeks ago, but has been bottled up in the Senate.

TransWest has 15 lobbyists working to keep the bill locked up in the Senate. Blue Castle has six lobbyists plus Tilton, a former state legislator.

Sen. Curt Bramble, R-Provo, the Senate sponsor of the bill, has been trying to negotiate a compromise between the parties, but so far it has been elusive and time is running out.

Tilton says all his company is looking for is the ability to get in line and move power on the transmission lines at some point in the future. Until there are guarantees the terminal will be built in Delta, he said companies like his are cut out of the federal process for getting access to power lines.

And with corridors to build the massive power lines pinched, if Utah generators don't get access to TransWest's line, it could be harder for them to get transmission capacity in the future.

"Every time a transmission line is put in place, it becomes exponentially harder to permit another one of them," Tilton said.

But Perruso said HB44 would provide a short-cut past that process, requiring TransWest to ink agreements with Blue Castle and other providers, guaranteeing them future transmission access years into the future before the line even gets the final green light to build.

Perruso likened it to trying to find someone to lease a rental property, but any potential tenant would have to agree to let another squatter move in whenever the interloper sees fit.

It would significantly hamper TransWest's ability to sign up customers and get investors to put money into developing the line, she said.

Earlier this year, Blue Castle asked TransWest to reserve 1,000 megawatts on the line, a third of the total capacity on the $3 billion project, for the next 15 years, without paying for the right.

The bill now stuck in the Senate would essentially be a massive giveaway to Tilton and, to a lesser extent, the solar companies, according to TransWest.

Perruso said TransWest will pay $13 million in sales and use taxes during the construction phase and $240 million in property taxes over the life of the project. If the transmission line doesn't get built, she said, the state doesn't see any of those benefits.

"We have not run into where another state wants us to basically give a preference and force us into an agreement with in-state generators," Perruso said, "and I have to admit it really caught us by surprise because Utah has been so business-friendly."

gehrke@sltrib.com

Twitter: @RobertGehrke