PacifiCorp to buy from Desert Power

The Utah Public Service Commission has approved having Desert Power LP sell its electricity output to PacifiCorp.

In an order issued Thursday, the commission approved the contract between the two companies for the electricity from Desert Power's facility near Rowley, Tooele County, which is adjacent to U.S. Magnesium. The facility has 65 megawatts of output, which would grow to about 95 megawatts — enough electricity to power about 71,000 typical homes.

PacifiCorp has said that deliveries from the facility are expected to begin Jan. 1, 2006.

The contract negotiated between the companies was unopposed by other parties, which included the state Division of Public Utilities, the Committee of Consumer Services, the UAE Intervention Group, U.S. Magnesium and the Utah Energy Office.

"We conclude that the terms and conditions of the . . . contract between Desert Power and PacifiCorp, including the prices to be paid for capacity and energy pursuant to the terms of that contract, are just, reasonable and in the public interest," the commission said in its ruling. "The negotiated contract that resolves this matter is just and reasonable in result."

Federal and state law requires PacifiCorp to buy power offered by a "qualifying" facility at certain costs. For a variety of reasons, the commission said the rates, terms and conditions approved in the Desert Power case would not be a precedent for future qualifying-facility contracts.

U.S. Magnesium, then called Magnesium Corp. of America, and Desert Power in 2002 complained to Utah legislators and the Public Service Commission that PacifiCorp was unwilling to buy power those entities could create, at a time when PacifiCorp needed more electricity to meet its demand. They said their alternatives should have been considered more closely instead of allowing PacifiCorp to add power generation to the Gadsby Power Plant in Salt Lake City. PacifiCorp representatives said at the time that the utility was worried that its ratepayers would have to pay more on their bills as a result of the utility buying power from such facilities.

The PSC on Friday scheduled a hearing for Nov. 19 on U.S. Magnesium's request to sell power to PacifiCorp.

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E-mail: bwallace@desnews.com