A contract that would cut power rates paid by Nucor Steel by more than one-third, has been approved by the Utah Public Service Commission - but only if the company agrees to allow the PSC to maintain regulatory control over the 10-year agreement.

Nucor and Utah Power & Light now have one week to decide whether the conditions imposed are acceptable.The agreement reduces the present rate of 4-cents per kilowatt hour to just 2.5-cents per kilowatt hour - a rate Nucor and UP&L officials say is comparable to that being charged other major industrial customers, while still sufficient to cover the actual cost of the service.

A provision in the contract allows UP&L to interrupt power delivery to Nucor for up to 1,314 hours per year with a 10-minute notice time prior to each interruption. This ensures residential customer supplies are not affected elsewhere in the system. It is this interruption provision in the contract that Nucor officials say justifies the lower rate.

Nucor has agreed to buy out the remaining 16 months of its present contract for $5 million. Also, it will continue to buy some of its power on a non-interruptible contract at regular business rates.

While other interruptible contracts are in existence in the UP&L system, the Nucor agreement is the first long-term arrangement. And, that is what concerns PSC commissioners. Other reduced-rate contracts have generally run for two years at a time, giving the PSC opportunity to review them from time-to-time.

Commissioner James M. Byrne said the commission wants to retain regulatory control to ensure that future events do not create a hardship on other rate payers. UP&L officials stated in testimony during a two-day hearing that company shareholders should not face the entire risk imposed by such a contract. PSC officials say continued control will ensure the public interest is protected.

The PSC ruling states that such contracts presently appear to be in the public interest, but it also cautions that that presumption is subject to change should clear and convincing evidence to the contrary be presented to the commissioners.

UP&L officials say the agreement is good because it keeps Nucor in the system which benefits all rate payers. Nucor had indicated it might leave the UP&L system and join with the small town of Plymouth to form a municipal power company. Officials said the reduced rate is needed to keep the company competitive and operating at full strength.