The Utah Public Service Commission wants more information about the impact of reduced-rate interruptible power contracts for large industrial customers and is forming a task force to get the information.
Following a hearing Wednesday with Utah Power & Light Co. officials, the PSC directed the Utah Division of Public Utilities to form the task force and develop proposals. UP&L and large industrial users are expected to be part of the study group.The PSC will review the proposals Feb. 28 and determine which ones should be addressed by the task force.
The effort was prompted by a recent case involving UP&L and Nucor Steel. Nucor essentially forced UP&L to grant the company a long-term reduced-rate contract for interruptible power by threatening to contract with the town of Plymouth in Box Elder County to form a municipal power company. UP&L officials said that move would have cost the private utility between $1 million and $4 million annually.
UP&L has several short-term interruptible contracts in place. The granting of a long-term contract to Nucor is expected to spur demand for similar contracts from other large industrial customers.
An interruptible contract allows UP&L to cancel power deliveries by providing advance notice and is intended to ensure that supplies to residential customers during peak demand periods are not affected. Such contracts generally require a specific notice time and specify the total interruption time allowed in a year. The lower rate is intended to compensate companies for the inconvenience.
PSC commissioners granted the Nucor contract following a hearing in January but expressed concern that there is little information to use in analyzing such contracts. The commissioners also want to know just how many such contracts are feasible without affecting the general quality of service to residential customers.