Water and public power users hope eight months of negotiations will lead to draft legislation Thursday that would finance more than $300 million of Central Utah Project construction.
Higher power rates for municipalities with access to public power would be the result if additional power revenues are used to finance the water development in Utah and the three other upper Colorado River basin states - Colorado, Wyoming and New Mexico.In Murray, for example, the current average retail rate of 6.5 cents per kilowatt-hour would increase to a little more than 7 cents - a 12.5 percent jump, said John Molhman, Murray's power general manager.
While not happy about the increase that's being negotiated, Molhman said he's been comfortable with the way the negotiating proceedings are being handled.
The benefit to public power users would be longer-term contracts with the federal government for federal power, said Intermountain Consumer Power Association General Manager Carolyn S. McNeil. ICPA is the sole purchasing agent for federal power in the intermountain area, she said.
Federal power contracts now run 15 years - public power is asking for 40 year contracts if it agrees to charge its wholesale customers an additional 50 to 60 percent to add new projects to the portfolio of federal dams and water projects it is already helping pay for.
Don Christiansen, general manager of the Central Utah Water Conservancy District, the CUP's in-state sponsor, said the non-traditional financing method being negotiated would also require a 20 percent local match on construction costs.
Negotiators representing the four user states hope to have a final agreement in hand at the end of the session in Phoenix Thursday, said former Utah Gov. Scott M. Matheson, who represents public power interests in the negotiations.
Matheson said environmental concerns expressed by Rep. Wayne Owens, D-Utah, and other ranking congressmen had not been satisfied as of Monday, but he hopes the different factions involved can reach an agreement at Thursday's meeting and leave with legislation ready to be taken to Congress.
The state and public power users would each contribute one-half mill toward environmental mitigation under the plan developed so far - modeling a plan in use on the Columbia River system, Christiansen said. The mitigation funds would not be added to the Bureau of Reclamation's federal wildlife mitigation funds, he said.
Last year's CUP bill failed after the first partisan CUP squabbles Utah's congressional delegation has had in the history of the project, Matheson said. "I don't want to see it unravel on us this time," he said. "We want to be careful that everybody's in."
Without a bill, the future of the CUP's irrigation system is in peril because the Colorado River Storage Project, which encompasses the CUP, is nearing its spending ceiling as set by Congress.
Also, Murray residents and the rest of Salt Lake County face the possibility of having higher water bills if they have to pick up the tab for water developed for irrigation that can't reach irrigators because the 180,000 acre-foot irrigation delivery system has not been built.
Matheson said he would prefer to see Congress extend the CRSP spending ceiling using traditional financing methods, but that possibility has been viewed dimly since early last year.
In April, Sen. Jake Garn, R-Utah, asked the CUP's state sponsor, the Central Utah Water Conservancy District, to prepare an analysis of alternate financing methods for the irrigation system.
Garn then introduced a bill asking for $754 million to finish the CUP, including the irrigation system. A different version promoted by Owens cut the irrigation system from the funding request and decreased the asking amount to $370 million.
The district opened the door for non-federal financing on irrigation system when the Utah Legislature passed a bill in 1988 that, in the case of the CUP, would allow the conservancy district to issue revenue bonds to build hydroelectric power generating facilities in Diamond Fork Canyon. Revenue generated by these facilities would be used to pay for the irrigation system to be built downstream of Diamond Fork.