The Intermountain Power Agency, owner of the Intermountain Power Project near Delta, has approved a $500 million sale of revenue refunding bonds.

The refunding, which will cover 29 original issue bonds, is the first this year and the 15th since 1984, a spokeswoman said. The agency's ongoing refinancing program has reduced borrowing costs from 11.31 percent to 8.41 percent since 1984, saving $2 billion in debt service costs.Interest on the new issue is 7.78 percent, representing a $42.36 million savings in debt service. The original bonds have interest costs varying from 8.5 percent to 10.75 percent.

"The debt service savings on this issue alone will average $1.32 million annually," James A. Hewlett, IPA's financial officer, said.

IPA owns a 1600 megawatt, coal-fired power plant near Delta that sells its power to communities in southern California.