Public power officials believe a settlement agreement with Utah Power & Light over a suit brought by the private utility to obtain Colorado River Storage Project hydropower has successfully protected the preference given contracts with municipally owned utilities.

Gary Dodge, the attorney representing the Western Area Power Administration and the Intermountain Consumer Power Association, told the power association board last week he is confident the settlement will withstand a National Wildlife Federation challenge.The settlement, approved by U.S. District Judge J. Thomas Greene, allows the power administration to sign contracts with the various municipal power companies for power generated by Colorado River hydro projects. The signing of those contracts, to become effective in October, had been challenged by UP&L, which was seeking to gain the same preferential contract status as the public utilities.

While UP&L will receive power from the storage project as part of the settlement agreement, it will not be through a preferential contract. Power administration officials say it will be a contractual agreement similar to that used with other private utilities that have purchased storage project power in the past.

Dodge said it may be next week before Greene's order is signed. He said attorneys for the National Wildlife Federation, which is planning to appeal the agreement to the U.S. 10th Circuit Court of Appeals in Denver, are expected to take the 5 days of review granted them before approving the form of the order. He said the federation will likely use that time to prepare its appeal. Greene has given the federation 24 hours to file its appeal before the order takes effect. The 24-hour period begins when the order is signed.

Dodge said the appeal should not delay the contract signings for more than four to six weeks. He said he does not expect the appeals court to overturn the agreement. A Wildlife Federation suit seeking an environmental impact study involving power administration hydro projects is still in process. Greene refused to quash that suit in approving the settlement agreement between the power administration and UP&L.

The settlement contains a clause that would reopen contracts if the federation suit is eventually successful. Federation officials say their suit may be in vain if the contracts are allowed to go into effect before their claim is resolved. They say too much environmental damage could occur between October and the final settlement of their suit, which some predict could take up to three years if appeals are filed.

Dodge told the board that the power administration and power association are not out of the woods even if the settlement withstands appeal. He said the eventual rulings in the Wildlife Federation suit could have effects that make some of the municipal contracts unworkable once they are reopened.

The new contracts will be for 15 years.