LOGAN — Utah's municipal power suppliers have been forced to take out a $14 million loan to cover higher prices for energy they contracted to buy this year.

The loan covers municipal systems serving 34 Utah cities.

Dave Tuttle, finance director for the Utah Associated Municipal Power Systems (UAMPS), said it wasn't clear whether the loan will force higher rates for municipal customers.

No payment is required on the loan until April 2002.

The loan solved a money crunch this spring when municipal power systems signed contracts to buy wholesale power for $200 to $300 per megawatt hour.

Those prices looked good at a time when analysts were predicting wholesales costs might rise to $600 per megawatt hour this summer.

But prices started to tumble in June with federal price caps on electricity sales and a California lawsuit that prompted wholesale power generators to boost production.

Market prices dipped below $100 per megawatt hour.

Now, months later, UAMPS is scrambling to make ends meet. The group is trying to renegotiate and extend its contracts for wholesale power, diluting the effect of higher costs.

The effect on municipal systems will depend on how much wholesale power each has to buy, how many customers each serves and how much power is drawn from a shared pool of municipal power.