Everybody's business

Utah Legislature to tackle variety of issues that affect state's economy, consumers

Published: Saturday, Jan. 15, 2005 5:24 p.m. MST
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With bills that deal with everything from building power plants and pricing phone service to attracting movie shoots and boosting economic development, this year's legislative session will be a must-see event for Utah business leaders.

Here's a look at some of the measures that could affect the state's economy in the years to come.

Powering up

Consumer and industry advocates say Utahns could pay too much for a string of new power plants over the coming years unless the Legislature enacts new rules ensuring a fair playing field.

The problem, they say, centers on a competitive bidding process in which Portland-based PacifiCorp acts as both a bidder and judge.

Randall Falkenberg, a utility consultant for the state Committee of Consumer Services, said bidders competing against PacifiCorp have virtually no chance of winning under Utah's current system.

The controversy surrounding utilities choosing themselves or their affiliates to build new power generation is not confined to Utah but has played itself out across the nation, according to Craig Roach, a utility consultant with Boston Pacific Co., a consulting firm based in Washington, D.C.

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"There has been an effort for a long time now to introduce competition to the electricity business," Roach said. "There's a lot of litigation at the federal level and at the state level of a local utility picking its own option. It's a nationwide concern."

PacifiCorp, which operates in Utah as Utah Power, believes the utility is actually the one at risk, as it is compelled to build new power projects with the hope that state regulators will let it recover its costs.

In addition, the utility maintains, outside bidders do not carry a mandate to provide electric service. Credit risks by outside companies resulting in delays in completing power projects ultimately could hurt PacifiCorp.

The New Energy Resource Procurement Act, SB26, would change the rules. It asks the Utah Public Service Commission to hire an independent evaluator who would be charged with monitoring the solicitation process for fairness.

Under past bidding solicitations, PacifiCorp hired its own consultant to monitor the solicitations, paying hundreds of thousands of dollars in fees to the consultant.

"There needs to be someone outside of the company as an informed check on the company's process and decisionmaking to ensure that ultimately customer interests are placed first and foremost," said Gary Dodge, an attorney representing the Utah Association of Energy Users. "With PacifiCorp as the judge, the juror, the competitor, they've shown that they win every time."

The second biggest part of the new legislation is a change in the standard for approving new energy resources. Under current rules, the PSC gives the go-ahead for new energy projects if a need exists.

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Alex Nabaum, Deseret Morning News

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