Micron Technology won't be buying electricity from Lehi Power, but a city official believes Lehi can make more money by laying a franchise fee on the semiconductor manufacturer.

Micron awarded its power contract to PacifiCorp, even though the Portland, Ore.-based parent to Utah Power extended a higher-priced offer. Micron is building a 2 million-square-foot computer memory chip plant at the base of the Traverse Mountains in northwest Lehi. The city is providing electricity during construction."We actually outbid PacifiCorp," City Councilman Knollin Haws said.

Micron spokeswoman Julie Nash said the company chose what it believes is the more reliable source of power at a competitive price. "That was strictly a business decision," she said.

Utah Power spokesman Dave Eskelsen declined to reveal terms of the contract, saying the power provider had signed a confidentiality agreement with Micron. The company earlier purchased pollution rights from PacifiCorp.

Haws said he believes Micron basically chose PacifiCorp because it's larger than Lehi Power. The Utah Association of Municipal Power Systems is Lehi's wholesale supplier.

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Nash declined to comment on that. "I think we've had a good relationship with the city of Lehi. I'd hate to see that deteriorate," she said.

Although city officials were stung by Micron's decision, Haws said the city intends to impose a 6 percent franchise fee on Micron. He said that will amount to "tens of thousands of dollars every month" from the company. The fee would be based on the gross revenues from power sales and service PacifiCorp provides Micron. Negotiations regarding the fee are currently under way, he said.

Losing out to PacifiCorp shouldn't come as a complete surprise to Lehi. The city signed an agreement with Micron in June allowing it to pursue a contract with PacifiCorp. That same agreement includes a provision for the 6 percent franchise tax.

Micron will spend an estimated $36.6 million to upgrade and build two power substations for its plant.

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