“I’m from Washington, and I’m here to help.”
The butt of that political joke is always a government bureaucrat who is understood by speaker and audience to be out of touch with reality, oblivious to common sense, determined to steamroller top-down authority over local officials and impliedly burdened with a pointy head.
For Utah mayors or city council members charged with overseeing a municipal electric power system, the latest variant on that chestnut is, “I’m the Utah Legislature, and I’m here to run your power system better than you can.”
Legislators are greasing a bill to take over governance of the Intermountain Power Project (IPP) by putting legislators in charge. Hmm.
The Great Salt Lake is projected to dry up within 10 years notwithstanding the Legislature’s laser focus on saving it. St. George is running out of water, and the Legislature’s Plans A, B, and C are to spend hundreds of millions of tax dollars building the Lake Powell pipeline to tap an already over-allocated and drought-diminished Colorado River.
So, what could possibly go wrong with legislators as power czars?
Here’s what: Since 1977, 23 Utah cities and their 350,000 residents have partnered with several large California cities, including Los Angeles, to construct and operate the IPP in Delta under the governance of the Intermountain Power Agency (IPA), organized under Utah’s Interlocal Cooperation Act. I was a legislator at the time, and I voted with my Republican and Democratic colleagues to authorize the IPP project and its governing structure because it made all kinds of sense for the Utah cities, the California cities and all the customers those cities serve. It was a multi-trillion-dollar project with an expected usable life of 30 years. It was a coal-fired plant with a generating capacity of 1,800 megawatts at peak. That’s enough electricity to power 1.5 million homes.
Everyone knew going in that the California cities would take the bulk of that power and assume a corresponding percentage of the costs of construction and operation. Everyone also knew that Millard County would benefit from taxes paid by the project and the economic benefits it produced. Indeed, for Millard County, it has meant $490 million in tax revenues since 1977. In 2022 alone, over $4 million was paid to Utah in sales and use tax and $1.8 million in gross receipts tax, the vast majority of which is paid by California IPA customers. Moreover, the project has not cost Utah taxpayers a single dime.
The handful of legislators who wish to muck around with IPA’s private business arrangements and its power plant operations don’t actually care about Utah’s power customers or prices. This is all about requiring IPA to keep on buying and burning Utah coal no matter the long-term economic and environmental consequences (and the unavailability of Utah-mined coal to IPA for at least the past year). Put another way, they want to force IPA keep on producing buggy whips long after automobiles replaced horses.
My city, Bountiful, is one of the Utah IPA partners, and while we do not often use our IPP power allocation (we sell it to the Californians), it is a critically important piece of our power resource mix. As Glen Canyon power becomes a smaller percentage of our base load, courtesy of the ongoing drought crisis, we will likely need to tap more of the IPP resource. The electric power wholesale markets are volatile, and long-term resource availability is critical to Utah’s municipal systems. Cities like mine are getting exactly the deal that was bargained 40 years ago: a reasonably priced source of baseload power when they need it, and mostly at California’s expense.
Coal makes less and less sense as a mainstay of power generation. IPA has contracted to reconfigure the power plant to replace coal with natural gas and hydrogen. The bonding to finance that conversion is already in place, work has begun and is scheduled to be completed in 2025. Even if Utah coal were still available, IPA’s access to it is stymied by the lack of reliable railroad delivery capacity.
In short, this is a raw political shakedown by Utah coal interests and their legislator friends who don’t mind throwing their weight around no matter the risk to Utah’s municipal power systems and their 350,000 customers.
David Irvine is an attorney and former Utah Public Service Commissioner. He is a Bountiful City Power Commissioner, and is not speaking for Bountiful City.
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