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BOUNTIFUL TO PURCHASE A PART OF N.M. FACILITY

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You could say City Council members have become power-grabbers.

Sure, they've already got political power, but now they've grabbed the electrical kind of power - five megawatts to be exact.The council agreed unanimously Wednesday to buy part of a coal-fired generating plant in New Mexico for $5.9 million. The cash, which comes from city reserves, buys the city five megawatts - about 10 percent of what residents currently use every year.

But more importantly, the purchase secures for the city a stable, long-term source of energy, says Cliff Michaelis, Bountiful Light and Power manager.

Much of city's current supply of electricity is purchased on the spot market, like renting. But Bountiful needs to secure its own supply to hedge against future rate increases, much like it did when officials bought into the Inter-mountain Power Project in central Utah.

That deal locked prices at 52 mills or 5 cents per kilowatt hour. The New Mexico purchase locks prices at 45 mills or about 41/2 cents per kilowatt hour. The city currently pays about 2 cents for each kilowatt hour it generates or buys.

"This is an excellent investment for us right now. It should be a source for at least 40 years," Michaelis said. The deal will not increase rates homeowners pay next year but could affect them in the future. How much of an increase depends on how much electricity the city pulls from the plant, Michaelis said.

The city's purchase is through an agreement negotiated by the Utah Associated Municipal Power Systems, which has 35 members. Seventeen members of the association are involved in the deal. (See box)

Government regulators in New Mexico say the cities aren't buying a lemon.

"It's been operating very well. I'd say it's one of the best plants in the southwest," said Keven Groenewold, staff engineer for the state's Public Utility Commission.

The commission must approve the sale before it can be closed. Michaelis expects that to happen before the end of the year. If approved, the city could begin pulling electricity across PacifiCorp transmission lines (through agreements with the Western Area Power Administration) by the first of next year.

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(Chart)

Power grab

Seventeen Utah cities have agreed to buy part of a coal-fired generating plant near Farmington, New Mexico. All of the cities except two will probably bond through the Utah Associated Municipal Power Systems to pay for their purchases. Total amount of energy purchased is about 40 megawatts. The cities and their shares:

Kilowatts Cost

St. George 16,200 $19.1 million

Bountiful 5,000 $5.9 million

Logan 2,000 to 5,000 Up to $5.9 million

Murray 1,600 $1.9 million

Kaysville 1,500 $1.8 million

Beaver 200 $237,000

Blanding 1,000 $1.2 million

Enterprise 100 $118,500

Fillmore 300 $355,500

Hurricane 700 $829,500

Hyrum 1,500 $1.8 million

Lehi 1,500 $1.8 million

Morgan 500 $592,500

Paragonah 100 $118,500

Santa Clara 1,000 $1.2 million

Spring City 100 $118,500

Strawberry 1,000 $1.2 million

Note: Bountiful and Hyrum will pay cash for their shares. Logan officials will decide on the exact amount of their shares within two weeks. Source: Utah Associated Municipal Power Systems.