A proposal by PacifiCorp to play a major role in the bankruptcy reorganization of Colorado-Ute Electric Association Inc. could have a major effect on Utah Power & Light Co. customers in Utah.
Under the plan, PacifiCorp's electric operations unit would acquire 400 megawatts of the Colorado-based company's generating assets involving four coal-fired power plants. PacifiCorp is offering $385 million for the plants.In addition, PacifiCorp would make a long-term power sale to the struggling utility that would serve Colorado-Ute's existing customers with the balance of the generation earmarked for PacifiCorp customers.
PacifiCorp, parent company of UP&L and Pacific Power & Light, serves 1.2 million retail customers in Utah, Wyoming, Oregon, Washington, Idaho, Montana and California.
Colorado-Ute, a rural electric cooperative serving areas of Wyoming and Colorado, has been struggling financially for more than a year.
This is the second major acquisition move by PacifiCorp in the past six months. Last fall the company paid $221 million to acquire 350 megawatts of generating capacity from Arizona Public Service. That agreement also allows PacifiCorp to participate in construction of additional generating capacity developed by the Arizona company.
PacifiCorp submitted its latest proposal to the bankruptcy trustee for Colorado-Ute on Tuesday, the deadline for submitting such proposals. The offer will be reviewed by the trustee, Victor H. Palmieri, who will make a final decision on whether to accept the offer.
David F. Bolender, president of PacifiCorp's electric operations, said the company believes the plan will serve the needs of Colordo-Ute while providing benefits for PacifiCorp customers and shareholders.
"We believe that the blending of the system power from PacifiCorp with other available resources will result in a fair and competitive price to Colorado-Ute's existing customers," Bolender wrote in the proposal. "We have a proven record of developing innovative power-supply transactions, and we can apply this experience in assuring that our participation will add value for all concerned in reorganizing Colorado-Ute."