Utah Power & Light Co. and Geneva Steel have signed a 10-year electrical power agreement that company officials believe is a major step in the steel plant's modernization program.
Joseph A. Cannon, Geneva president, said securing this source of power is one of the major steps necessary for the company to meet its commitment to keep the steel plant operating for many years.UP&L president Frank Davis said the utility is committed to aggressively seek methods to lower rates for all customers and to promote economic development
"Our recent merger with PacifiCorp is a major step in fulfilling these objectives and with the merger, the company looks forward to being partners in economic development with Geneva," said Davis. He said the two companies have discussed ways to cooperate in attracting new business to Utah along with encouraging expansion of existing business.
Under the agreement, Geneva will pay 10 to 15 percent more for the 90 megawatts of power than it has been paying, but Cannon said the certainty of the agreement will play a major role in the long-range modernization plans.
Davis said retention of Geneva as a customer will benefit other customers and the price and terms of the contract are in line with contracts with other large power users.
Factors important in structuring the arrangement included the large amount of power used and the steel plant having its own generation capacity and power distribution system. Also, Geneva agreed to provisions escalating the price to cover the utility's future costs and to have its power interrupted when necessary on 10 minutes notice to keep residential customers supplied.
During the recent below zero temperature readings, Davis said power dispatchers from the two companies worked closely utilizing the Geneva generator to help supply portions of the large amounts of additional energy UP&L generated supplied to customers.
Cannon said the new agreement would increase the extent to which Geneva's generation capacity would be integrated into the UP&L system. For example, Geneva may actually provide enough power to meet the electrical demands of a significant portion of Utah County homes on some weekends, allowing more efficient scheduling and utilization of UP&L's generation facilities.