Geneva property sale advances

Geneva Steel on Wednesday put in motion activity to smooth the process of selling land, water rights and emissions credits for either of two companies vying to build a power plant at the former steelmaking plant's property.

U.S. Bankruptcy Court Judge Glen E. Clark approved Geneva's proposal that would eliminate any perceived drawbacks in Kentucky-based Summit Energy LLC's bid to provide power to PacifiCorp by building a plant by 2007.

Summit and California-based Calpine Corp., through a unit called Vineyard Energy Center LLC, are vying to build a natural gas-fired power plant on part of Geneva's Vineyard property. Both Calpine and Summit have been "jockeying" for position to become the frontrunner in the power plant bid process, Geneva attorney Stephen Garcia said.

An amendment signed Tuesday night "paves the way for a Summit transaction," he said.

Summit will work with Geneva on an agreement, likely to be the subject of a bankruptcy court hearing in April.

Geneva believes the amendment is a key to reaching a deal with Summit so that regardless of whether Summit or Calpine is selected by PacifiCorp, "we'd be able to close a transaction for that successful project," Garcia told Clark.

PacifiCorp also is in the running, envisioning an expansion of its Currant Creek power plant in Mona, Juab County. The utility recently got the go-ahead from the Utah Public Service Commission to build the 525-megawatt Currant Creek project, with 280 megawatts to become available by summer 2005.

A megawatt is enough electricity to power 500 to 750 homes.

But Garcia said that both the Calpine and Summit bids are superior to PacifiCorp's expansion proposal, as well as the initial Currant Creek buildout. Either the Calpine or Summit projects would fit into Geneva's master-use plan for the mill property, it has available water rights and no air quality issues, he said.

"We've got a good site for either company," Ken Johnsen, Geneva president and chief executive officer, said. "What this amendment is intended to do is put both parties on an equal footing, should they be selected by PacifiCorp" for the power plant.

Calpine is offering $20 million for 62 acres, emission credits and water rights. The Summit offer is for about $19 million.

Garcia said the Geneva property for any power plant is vacant, with no significant environmental issues, but Geneva will provide the Utah Department of Environmental Quality and the U.S. Environmental Protection Agency with copies of Wednesday's order.

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