Intermountain Power Agency officials' celebration of a record-breaking year Tuesday was tempered by mourning over the recent death of the IPA's longtime chairman.

IPA officials said during the agency's annual meeting that the Intermountain Power Project plant north of Delta generated a record 13.6 million megawatt hours of electricity during the fiscal year that ended June 30.Reed T. Searle, IPA general manager, said the agency also was successful in cutting costs as it tries to prepare itself for competition in a deregulated electricity marketplace.

Company officials attributed much of the IPA's past and recent success to the leadership of Reece D. Nielsen, who served almost 20 years as board chairman before he died Nov. 18.

Board member Ted L. Olson of Ephraim, calling Nielsen a "powerful force with public power," read the chairman's report Nielsen prepared before he died.

The report said IPA generated more than $100 million in surplus funds during the last fiscal year to help the agency move toward early retirement of the power plant's nearly $4 billion in debt.

Almost all of the electricity generated by the coal-fired plant is used by the California cities of Los Angeles, Anaheim, Riverside, Pasadena, Burbank and Glendale.

California deregulated its electricity market early this year, so IPA officials have been trying to cut costs now in order to make sure the plant's prices will be more competitive in the future.

"The Intermountain Power Agency has made remarkable progress this year in preparing for a more competitive electrical industry . . . ," Olson read. "We believe we will accomplish our 2002 goal."

Searle said the agency is now in the third year of its five-year plan to reduce its debt by about $2 billion, and it is running about $100 million ahead of schedule.

In addition to cutting 76 full-time positions at the plant through attrition and early retirement last year, IPA was able to reduce costs in maintenance, overhead and administration.

Searle said IPA also will save millions of dollars in interest payments after refinancing much of its debt. The agency's average borrowing cost fell from 6.20 percent to 6.04 percent in the year ended June 30.

"We have implemented everything we can think of at this point in time (to cut costs)," Searle said. "Now we just need to employ those dollars to continue to reduce debt."

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He said the cost of power sold by the Intermountain plant to Los Angeles has fallen from about 6.3 cents per kilowatt hour in 1996 to 4.7 cents during the last fiscal year. That figure should drop to about 3 cents per kilowatt hour by 2003, Searle said.

The IPA, an organization of 23 Utah municipalities, was formed to finance, construct, operate and maintain the Intermountain Power Project. The project includes the 1,680-megawatt plant, a 500-kilovolt direct current transmission line extending 490 miles to California, other transmission lines within Utah and a rail-car service center.

Ray Farrell of Heber City was re-elected to another four-year term on the IPA board Tuesday and was elected chairman to succeed Nielsen. Robert Christiansen of Beaver was elected board secretary, replacing Farrell in that position.

Walter Meacham of Kaysville was elected to serve the remainder of Nielsen's board term, which expires in December 2000.

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