Negotiations with Utah Power over the placement of transmission lines here have been unproductive and the city should seriously consider forming its own electric company, one Sandy official has recommended.

In a memo to the City Council dated Tuesday, Councilman George McNeill says discussions have reached an impasse that "may not be solved in the short term," and urges officials to consider other alternatives.At issue is whether power lines associated with a proposed substation in the Dimple Dell area would be installed overhead, as Utah Power would prefer, or underground, an option city officials and area residents have overwhelmingly supported.

The power company is willing to install the new lines underground, but wants the city to pay the additional cost, estimated to be at least $2.2 million and perhaps as much as $12.7 million.

In the memo, McNeill accuses Utah Power of "grossly overstating" the cost of placing power lines underground in its initial contacts with the city, and says the company "may well be manipulating other figures and information."

Because the city has an ordinance requiring all electrical lines on new projects to be placed underground, McNeill states, all such costs associated with the substation lines should be paid by Utah Power.

"The customers are requesting that this go underground and are even willing to pay a differential as part of a monthly bill, and Utah Power and Light does not want to have anything that would make it seem like rates are higher," McNeill said Wednesday. "Utah Power and Light ought to collect that, not Sandy. I don't think Sandy should be the middle man."

McNeill, Mayor Tom Dolan, three other city officials and two Utah Power representatives met Dec. 21 in another attempt to iron out the differences. McNeill said so little was accomplished that another meeting scheduled for this week was called off.

But Utah Power representatives said Thursday the negotiations are alive and well.

"I don't think Utah Power is ready to close any doors on this subject of undergrounding," said company spokesman David Eskelsen. "But we think we're on really firm philosophical grounds as far as those benefiting from the undergrounding of a section of line ought to pay that difference."

Jack Peck, who has spearheaded the negotiations for Utah Power, said he spoke with Dolan Wednesday evening. Peck said he is optimistic an acceptable method of paying for the underground installation can be discovered.

"We're still required by the Public Service Commission to ask for whoever is requesting any increase in our standard overhead practice to pay that cost differential," Peck said.

If the company agreed to charge its Dimple Dell-area customers an additional monthly fee to pay for underground lines, "we'd be basically breaking the law," he said.

Peck said the city and company have been meeting monthly, sometimes weekly, since April when the Salt Lake County Commission granted Utah Power a permit for the substation. That approval was given with one condition: that the two entities come to an agreement on how the lines would be placed and who would pay the costs.

Dale Ash, a member of a local citizens group that has monitored the issue, said Wednesday he agrees with McNeill's recommendation.

"We need a power company that cares about the citizens' concerns as much as they do their own concerns and we don't have that right now," he said. "The best thing the city could do, from my perspective, is go municipal."

The proposed substation would be located at 1929 E. Dimple Dell Road, with lines connecting it to the Dumas substation, 12300 S. 1000 East, and the Alta View Substation, 1250 E. 9400 South. Utah Power has proposed to string the lines on 80-foot steel poles.