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SALT LAKE CITY (AP) -- The Utah Public Service Commission has authorized a Texas company to negotiate with PacifiCorp to build a $200 million, 100-megawatt natural gas-fired power plant at Mona in western Utah.
Dallas-based Spring Canyon Energy LLC was given the go-ahead to negotiate a contract with PacifiCorp under a so-called qualifying-facility provision that requires utilities to purchase excess electricity generated.
Doug Larson, PacifiCorp vice president of regulatory affairs, said Utah's peak demand is growing at 5.4 percent annually, so the state needs roughly 250 megawatts of additional capacity each year.
Electricity from the co-generation power plant would be sold to PacifiCorp at $50 to $60 per megawatt. The plant's steam would be sold to an industrial customer to make ethanol.
Neil Cook, chairman of the Juab County Commission, said he welcomes the power plant and the 100 jobs it possibly could bring.
"Juab County is a very poor county," Cook said. "Our tax base has been stagnant for a long time. This power plant would increase our tax base and therefore help our schools, help our roads, help everything that we do as a county to provide the necessary services to the citizens."
Several companies competed for approval to build a plant, including Pioneer Ridge LLC and Mountain Wind LLC, which intended to build two wind parks that would generate 48 megawatts.
ExxonMobil Production Co. petitioned for approval to sell power from a qualifying facility it owns near Kemmerer, Wyo.
The Division of Public Utilities had recommended that ExxonMobil be awarded the 100 megawatts.
Spring Canyon is required to complete its facility by June 1, 2007.
Cook said he believes that is not enough time, given the fact Spring Canyon must reach a contract with PacifiCorp before building the facility.
"I still don't look at it as a done deal," Cook said. "I don't see any way in the world how they could accomplish that without getting some kind of extension."
However, Steve Mecham, an attorney for Spring Canyon, said he did not anticipate any road blocks in striking a contract.
Mecham said the commission ordered good faith negotiations, "and that's what I expect of both parties."
Dave Eskelsen, a spokesman for PacifiCorp, said past qualifying facility contracts have taken two to three months to negotiate. Spring Canyon has estimated it will take 18 to 24 months to build the plant.
Larson questioned whether 100 megawatts will be enough to make Spring Canyon's plant economically viable.
"There's economies of scale," Larson said. "My guess is that the reality of a 100-megawatt plant being the best and most economical is not there. It probably takes a larger plant than that."
PacifiCorp already is constructing a $350 million natural gas-fired power plant near Mona. The 525-megawatt plant, called the Currant Creek power project, will be completed in two phases, with 280 megawatts operational by the summer of 2005 and 245 megawatts in 2006.
(Copyright 2005 by The Associated Press. All Rights Reserved.)