Texas firm blasts PacifiCorp in D.C.

State utility regulators on Friday continued discussions about improving a controversial bidding process for new electrical generation that critics charge is flawed.

But a new twist in the debate over PacifiCorp's bidding process was being played out nearly 2,000 miles away on Thursday, before the Federal Energy Regulatory Commission in Washington, D.C.

At that meeting, Ted Banasiewicz, a principal of Texas-based Spring Canyon Energy, one of the losing bidders in the quest to build a 525-megawatt power plant near Mona, Juab County, said PacifiCorp had manipulated the process to ensure that it won.

PacifiCorp, which operates in Utah as Utah Power, chose itself from more than 100 other bids to build the $350 million Currant Creek power plant, which is now under construction.

"In every way, the PacifiCorp bid was an exact clone of the Spring Canyon Energy bid," according to written remarks Banasiewicz presented to FERC on Thursday. "We developed the ability to run PacifiCorp's models, and we concluded that when we run the PacifiCorp models with the correct inputs, we win. And we win by a huge amount."

Banasiewicz appealed to federal regulators to launch their own investigation into the integrity of the bidding process.

Mark Tallman, managing director for PacifiCorp's trading and origination, attended Thursday's meeting in Washington and was at Friday's technical conference with Utah regulators in Salt Lake City.

"Each and every allegation he made was addressed by the (Utah Public Service Commission) during the Currant Creek hearing," Tallman said. "The commission's order speaks for itself. It did not find that the company evaluated their bid inappropriately. In fact, the topic of today's discussion were on these very topics."

Friday's meeting centered on a complex assortment of economic theories and formulas that went into two models used to evaluate bids in the Currant Creek case.

Spring Canyon has maintained that instead of looking at each bid to determine which provided the lowest cost, the PacifiCorp model included a "revenue component" and limited bidders to a 20-year economic evaluation compared to a 38-year period for the utility's self-build plan.

Phil Hayet, a consultant hired by the Utah Committee of Consumer Services, the state's utility watchdog, said the Currant Creek process did not make it clear to bidders what the utility's self-build option entailed and how it would be compared to other bids.

"We think you can always do something better," said John Stewart, director of Utah regulation for PacifiCorp. "That's what we are here to do. We're here to learn, we're here to get comments, and we're here to improve the process."

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