Power-plant pact OK'd

PacifiCorp has tabbed a Denver company to build a power generation plant on part of the former Geneva Steel site in Utah County.

But a losing bidder says it will dispute the selection.

PacifiCorp, which operates as Utah Power in Utah and Idaho, on Monday said Summit Vineyard LLC of Denver would develop and build a 534-megawatt, natural-gas-fired plant in a project named Lake Side.

PacifiCorp said it will enter into an asset purchase and sale agreement with Summit to develop the plant and with Siemens Westinghouse Power Corp. to construct the $330 million plant. When construction is completed, PacifiCorp will own and operate the plant, and Siemens-Westinghouse will provide a long-term service agreement.

The utility said Summit topped 52 other offers as the company tries to get more power resources ready by summer 2007.

But the other finalist for the project, California-based Calpine Corp., vows to contest the selection when PacifiCorp goes before the Utah Public Service Commission to get the needed regulatory approvals.

"The conversation takes on a whole new tone, unfortunately," said Calpine spokesman Kent Robertson. "This is the first step in the process."

While both Calpine and Summit bid on the project and both offers called for a plant at Geneva Steel, their proposals differed. Calpine offered to build an 817-megawatt plant. A megawatt is enough electricity to power 500 to 750 typical homes.

Calpine would have built and operated its plant but sold the power to PacifiCorp. Summit's proposal makes PacifiCorp the plant owner, allowing it to garner a rate of return on the investment.

That, plus the fact that a PacifiCorp official has said Calpine's project was the most economical option, has Calpine perturbed.

"Summit is a similar project, but it delivers earnings to PacifiCorp, whereas a power purchase agreement with Calpine does not," Robertson said. "It certainly has the appearance that (PacifiCorp) has chosen its shareholders over its ratepayers, unfortunately. That's not to say it's a done deal, though. The transaction now goes to the Utah (Public Service Commission), and there's always room for the governor and Legislature to weigh in.

"Everybody needs to closely scrutinize this transaction. There needs to be an assurance that the ratepayers are being treated in a fair and honest fashion, and what you have with PacifiCorp right now, they're the judge, jury and executioner, and they have a very strong incentive to choose a project that's going to bring home earnings. . . . This is a questionable deal. It certainly reminds you that PacifiCorp is an investor-owned utility."

Meanwhile, PacifiCorp and Summit say the selection was made fairly.