Sandy residents should be able to save money or at least come out even if the city takes over its electric distribution system from Utah Power & Light Co., a preliminary study indicates.
But the group that did the initial review stresses that it was just a rough, "back-of-the-envelope" look at feasibility.If Sandy wants to examine the idea in more detail, it will have to put up some cash - probably $20,000 to $30,000 - for an engineering study, said Alene Bentley. She is spokeswoman for two public power groups, the Intermountain Consumer Power Association and Utah Associated Municipal Power Systems.
Sandy asked ICPA to look at the possibilities after a group of cities began investigating municipal power options about a year ago.
But the other two sizable cities besides Sandy - West Valley and Orem - have both backed off while they wait to see what will happen with the proposed UP&L-PacifiCorp. merger. (See related story on B1.)
It was the merger talk itself that got Sandy interested, said Mayor Steve Newton. The city became concerned at potential loss of local utility control.
Newton said the city also was interested in the availability of cheaper power Sandy might be able to buy in Idaho if arrangements could be made for UP&L to "wheel," or transport, it.
Bentley said finding cheaper power supplies shouldn't be a problem - UAMPS could help with that.
And if the UP&L merger is approved with its proposed provisions for wheeling of UAMPS power, that might solve Sandy's transport problem. But since approval of those provisions is far from guaranteed, Bentley said, all she can say is that Sandy's wheeling needs would have to be negotiated.
One important angle the preliminary study did not address was UP&L's likely reaction to any attempt to displace it. Assistant Vice President Thomas W. Forsgren said that, although the 50-year franchise Sandy granted the company back in 1951 is not exclusive, UP&L would insist on continuing to serve unless the city were to make whole the company's other customers whose bills would go up if Sandy's customers were to drop off the system.
Sandy would be free to start its own utility, but it would have to put up its own poles, run its own lines and provide separate service drops to its customers' houses, he said.
UP&L did not bow out quietly when a group of southern Utah towns looked into going municipal several years ago, before the merger was even a rumor. After years of negotiations, Santa Clara and Washington finally made the switch, while LaVerkin, Ivins and Panguitch decided to stay with UP&L. Cedar City, which had led the movement in the south, turned down a proposed general obligation bond to buy its system, although it may still pursue a revenue bond funding plan, said Forsgren.
The combined load of Santa Clara and Washington is only 3 megawatts, compared to about 60 for Sandy.
The unofficial leader of the newer group of cities that looked into public power just last year was West Valley City Manager John Newman.
"Somehow I got to be the glue to hold it together for awhile. It wasn't self-appointed, I assure you." He said several cities were concerned about having an out-of-state corporation control their power supplies. But West Valley has since backed off.
"We entered our concern with the PSC (Utah Public Service Commission) and filed with them our concerns. But it really didn't make any sense for us to continue looking at it until the offer had run its gauntlet with the various regulatory agencies. It has almost done that."
West Valley hasn't discarded the public power idea altogether, but had to weigh the political ramifications.
"UP&L is fighting it vigorously. When we surfaced with our concerns and proposal that the municipalities become involved in running the utilities, they came unglued and really started fighting it," he said. "We're in a political fishbowl, and we just decided, `Hey, it's got to run its gauntlet anyway.' "
John Bohling, UP&L's assistant vice president over commercial operations, said the company just tried to present its view of the facts to the cities involved.
Orem City Manager Daryl Berlin said his city hasn't totally dropped the municipal power idea either, "but we're not actively pursuing it right now."
One of Orem's main interests was related to economic development. Provo was "beating us up on economic development because they were offering very low power rates." He said one benefit of merely looking at the idea was to make UP&L much more cooperative with Orem's efforts to attract business.
"Their whole attitude of trying to service the customer as far as municipalities has changed somewhat from being very aloof, not willing to listen," to being quite helpful, Berlin said. If the company were to revert to its old posture, Orem would look again at municipal power, he added.
Bohling agreed that the company may have been somewhat aloof in the past. "Not for the reasons that people think, but I think we have come through a fairly difficult time as far as public relations, and that tends to make you pull in when you're getting hammered all the time."
He said the company has since undergone a basic philosophical change "from an inward to an outward look" and is committed to working with cities on economic development.
Bohling said he's unaware of other cities from last year's group besides Sandy that are still looking at public power. "What people are interested in is lower rates," and UP&L doesn't believe cities can reduce their rates unless they have access to cheap federal power, which is quite difficult to get, he said.