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Payson eyes coal power

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PAYSON — City leaders want a cheaper source of electric power than the just-completed, $100 million Nebo Power Plant generates.

City power superintendent Ron Crump has been in negotiations to acquire coal-fired power from two generating plants, one in New Mexico and another one near Price. Sixteen megawatts from San Juan Unit No. 4 in Farmington, N.M., and Pacific Corp.'s Hunter No. 2 power plant near Price now goes to St. George, but that city wants to give it up. At 4.5 cents per kilowatt hour, the power is cheaper than electricity coming from the Nebo plant and would save the city about $3 million annually, Crump said.

With the new power source, Payson wouldn't have to take electricity as often to meet peak needs from the Nebo station, which can be turned on and off at will. Payson owns 11 percent of that station's output.

St. George is working through the Utah Association of Municipal Power Systems to transfer its entitlement to Payson, said St. George Energy Services Director Phil Solomon. The power is fed into the city system 24 hours a day but is only needed at peak times, he said. The sale will reduce city debt because St. George had ownership in the plants, he said.

Crump wants Payson to buy seven of those 16 megawatts, which would also give the city a more balanced mix of coal and natural gas electricity. Natural gas and steam run the 140 megawatt Nebo plant. It serves about 83,000 customers.

The plant was built to give the municipalities it serves cheaper power than they could buy on the open market. Those cities wouldn't be affected by Payson's decision, Crump said.

Meanwhile, the city is also looking at buying power from still another coal-fired plant now on the drawing board. Intermountain Power Agency Project Unit No. 3, a $2.1 billion, 950 megawatt expansion plant in Delta, is anticipated to start generating power by April 2011. The big players in the plant are PacifiCorp and UAMPS, Crump said. However, PacifiCorp spokeswoman Margaret Kesler said "it's way to early" for PacifiCorp to know if it will be involved. Most of the power would stay in Utah.

The Ccity of Los Angeles was considered a major player once, but has withdrawn.

Payson may buy 15 megawatts to take city power needs forward 25 years. Cost is an estimated 4 cents a kilowatt hour. The city must decide by early November if it wants to be involved.

"We're always trying to find a better deal," Crump said.

E-mail: rodger@desnews.com