Utah Power & Light Co. and Valley Camp Coal Co. have reached an out-of-court settlement of a legal dispute involving the price of coal produced at the Valley Camp of Utah Inc. mine, officials say.
As a result of the settlement, Valley Camp has placed its coal mine near the eastern Utah city of Scofield on standby status, idling most of the mine's 87 workers.The terms of the settlement reached Monday were not released. However, Utah Power spokesman Dave Mead said the company's Carbon Generating Plant just north of Price would be able to obtain less expensive coal as a result.
The utility filed the suit last year against Valley Camp "in an effort to get a court to validate UP&L's position that the price of Valley Camp coal was too high and represented something called gross inequity, or that the price was out of sight," Mead said Tuesday.
He said Valley Camp was charging about $40 a ton. In comparison, he said, UP&L's own Deer Creek, Wilberg and Cottonwood mines produced coal for about $21 a ton. The utility hopes that new suppliers will be able to provide coal for a price somewhere between the two figures.
Valley Camp Coal, a wholly owned subsidiary of Quaker State Corp. of Oil City, Pa., in turn filed suit to collect on the value of coal under a "take or pay" contract that wasn't taken, said Quaker State spokesman Benton Faulkner.
Under the settlement, the legal actions will be dismissed and a fee paid to Valley Camp during the six remaining years of the coal sale agreement, which called for the delivery of 450,000 tons of coal a year.
Mead said the settlement would lower the cost of coal to the Carbon generating plant, thus keeping consumer rates lower, preserve employment at the plant and benefit the local economy.