House panel OKs energy act

A bill that promises to foster a level playing field when new power resources are acquired passed unanimously Wednesday in the House Public Utilities and Technology Standing Committee.

Now SB26, called the New Energy Resource Procurement Act, will move to the full House for a vote. The Senate already has approved the bill.

Sen. Greg Bell, R-Farmington, the bill's sponsor, said the origin of the bill rests with PacifiCorp's decision to buy electricity from one of its affiliates, Pacific Power Marketing, which built a power plant in West Valley City at the height of the 2001 Western power crisis.

"After a long bidding process with a huge amount of interested bidders, the successful bidder was their affiliate," Bell said. "The other construction people just felt like they really didn't get a fair process."

Critics, like the Utah Committee of Consumer Services, have charged that the West Valley lease is one of the highest-cost resources on the system.

SB26 does not preclude PacifiCorp from choosing affiliated companies in meeting new generation needs. However, Bell said SB26 does provide for an independent evaluator, selected by state regulators, to oversee the fairness of the solicitation process. In the past, the utility selected the evaluator to monitor the process.

"The independent evaluator will make a huge difference in what party's selected," Bell said. "They're obviously going to scrutinize affiliate transactions quite carefully."

Last year, the outcome of an open bid process by PacifiCorp to build a new power plant near Mona added to the controversy.

PacifiCorp asserted that its self-build option to build the Currant Creek plant near Mona — at a capital cost of $345 million — was the best choice in meeting resource needs of more than 100 other outside bids. F. David Graeber, principal of Texas-based Spring Canyon Energy LLC, one of the losing bidders, said that his company could have built an exact copy of PacifiCorp's Mona plant for $310 million.

The Utah Public Service Commission eventually concluded that PacifiCorp's Currant Creek project was the best alternative of all the bids.

John Stewart, director of Utah regulation for PacifiCorp, said the utility supports SB26, and the legislation will likely take the controversy out of the solicitation process.

"There's always going to be disappointed losers and there's going to be winners," Stewart said. "It will take away any concern or suspicion that what Utah Power is doing is somehow not in the best interests of customers. . . . We believe that if someone else appoints the independent monitor it will give the end result more validity."

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