City leaders have authorized the Ephraim Power Board to look into several options on financing the construction of a small hydroelectric plant on its main culinary water line.
The proposed plant would supplement the main unit of the city's generating system, which is located in the mouth of Ephraim Canyon and has one generator that operates on irrigation water and the other on culinary water.A feasibility study has shown that the new plant would cost about $185,000 and produce $40,000 in additional power revenue annually, Val Anderson, a power board member, told the city council.
The plant would be located on a site yet to be determined near the storage tanks a mile east of the city, he said.
"We'd like to get the plant on line this fall," Anderson said. "We feel that the most favorable route to take in order to secure the necessary funds is a total re-financing of the city's power department loans."
The loans were incurred several years when the city borrowed about $3 million to build a new generating plant and upgrade its distribution system. Anderson said a possible source of funds is the Farmers Home Administration, which has indicated it would probably look favorably on loaning the city $185,000 for 20 or 30 years, at 6 percent interest, to fund the project.
"Our main concern with the FHA financing is that we probably couldn't get the plant on line for another year," Anderson said.
The power board has also approached Zions First National Bank on a financing package. "Zions has promised to offer us several options for our consideration," Anderson said.
One possible option would be a short-term, five- to seven-year loan with the revenue derived from the plant's operation covering the loan, he said.
Another option would be a total re-financing program, which could involve extending the payment period for several years beyond its present terms.
Anderson said the power board wants to maintain the present power rates charges and increase the city's production of low-cost power, thus reducing the amount of high-cost electricity it is purchasing from outside sources.