Now the three-member commission must decide whether PacifiCorp's 525-megawatt, gas-fired plant to be built near Mona, Juab County, is the most economical choice to meet Utah's rising energy demand. A decision by the commission could come as early as Friday.
PacifiCorp officials say Utah is facing a projected 1,049- megawatt power shortage by the summer of 2005. A megawatt is enough electricity to power 500 to 750 homes.
The Portland-based utility, which operates in Utah as Utah Power and is internationally owned by Scottish Power, came under fire in November after choosing itself -- from more than 100 outside bids -- to build the plant.
Donald Furman, senior vice president of regulation and external affairs for PacifiCorp, said the company's management does not favor building power plants vs. purchasing power from third parties.
Some have suggested that because the utility is allowed to earn a profit from its capital investments it has a vested interest in always choosing to build.
"This statement is sophistry," Furman told regulators. "There is no motivation for us to build our own plant, period."
He said the supposed financial interest in awarding itself the bid was only true if the company's rate of capital investment lagged its rate of depreciation.
"This is all idle speculation since the company is dramatically adding to its rate base already, with or without Currant Creek," Furman said. "Said another way, we expect to experience the other end of the extreme, where financing such a large amount of investment puts pressure on our balance sheet and credit ratings."
The company maintains that its self-build choice is $320 million more economical, over the 39-year life of the plant, than the next- best bid.
Yet losing bidder Dallas-based Spring Canyon Energy LLC said it could build the same plant for $310 million.
During seven days of hearings, Spring Canyon and other parties testified that the complex model PacifiCorp used to evaluate bids was flawed, giving the company's Currant Creek option the winning advantage.
Lincoln Wolverton, a utility consultant representing the Utah Association of Energy Users, described PacifiCorp's model as "seriously flawed" and said the company incorrectly counted revenues for a 39-year life of its power plant while holding bidders to a 20- year cycle.
Wolverton said, "I believe that ratepayers should be more concerned about the long-range costs and implications of a hasty approval of a major generating resource without a proper showing that the resource is the most economical available option."
Artie Powell, an economist with the Utah Division of Public Utilities, recommended that the commission give Currant Creek the go- ahead, but he acknowledged that a majority of his own analyses were based on the company's hired consultant, Navigant.
PacifiCorp already has sunk roughly $40 million into Currant Creek.
"We have brought forward the Currant Creek plant and put many millions of dollars at risk because we were unwilling to put our customers' fate entirely in the hands of a battered independent power industry," Furman said. "If anything, this proceeding demonstrates that this was the prudent course, and that the commission should proceed to issue a certificate for this plant."
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