Plant is likely to sail through PSC hearings

State regulators Monday heard testimony on a proposed $330 million natural gas-fired power plant designed to help meet peak summer electricity demand along the Wasatch Front.

Known as the Lake Side Power Project, the 534-megawatt plant will be located on 62 acres at the now defunct Geneva Steel site in Vineyard. A megawatt is enough electricity to power 500 to 750 typical homes.

Portland-based PacifiCorp, which operates in Utah as Utah Power, is asking the Utah Public Service Commission to determine that a need exists for the new plant and that the project represents the best cost and risk to customers.

Donald Furman, a senior vice president at PacifiCorp, said the Lake Side project is vital in meeting load forecasts.

"Since PacifiCorp's ability to get power into the east portion of its system is constrained, the availability of a physical resource within the Utah bubble is absolutely vital to serve load in 2006," Furman said in filed testimony. "There is no margin for error."

PacifiCorp entertained 53 offers by outside parties to build the plant. The bidding process was narrowed to two companies: California-based Calpine Corp. and Denver-based Summit Energy. In May, the utility chose Summit to develop the plant.

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 earn a rate of return on the investment.

Calpine had vowed to contest PacifiCorp's decision, but the company decided to pull out of the hearings, which will conclude with public comments at 4 p.m. today.

Unlike a highly contentious hearing earlier this year over the building of the Currant Creek project near Mona, Juab County — a separate natural gas-fired plant — the Lake Side Power Project is expected to sail through the regulatory process with little opposition.

"It has all the drama of a Utah presidential election," said Gary Dodge, an attorney for the Utah Association of Energy Users and a critic of PacifiCorp's bidding process. "We have the exact same concerns we have in Currant Creek. That is, when you have a utility that persistently self-selects itself and its affiliates over all other competitors — and they're both a competitor and the judge — you have to worry that the process isn't producing optimal results."

Dodge said UAE has not done a technical analysis of the bidders involved in Lake Side, and on Monday he waived all cross-examination of PacifiCorp's witnesses.