SALT LAKE CITY — Governor Spencer Cox said he will sign a controversial bill that allows the state to take over a massive power plant in central Utah, but he wants to call the legislature into a special session to make changes.
Senate Bill 161 would basically allow the state to take over the coal plant at Intermountain Power Project near Delta. The giant facility supplies the bulk of its electricity to California, but 23 Utah cities also take some power from it. The plant has been slowly moving away from coal to more environmentally-friendly sources of energy in multi-billion dollar investments.
That apparently has not sat well with members of the Utah State Legislature, who have argued that the state needs reliable forms of energy and coal is a part of that. This year, lawmakers passed a series of bills on Utah's energy portfolio that propped up coal even as the energy source is waning (Carbon County, for example, recently mined its last coal mine).
"SB161 is a strong bill that is good for Utah because it provides a way to help Utah maintain its reliable energy supply while exploring new energy sources and supporting economic growth opportunities in rural areas," the bill's sponsor, Sen. Derrin Owens, R-Fountain Green, said in a statement to FOX 13 News. "I am grateful for the governor's signing the bill and look forward to working with him to address concerns."
But SB161 could set up a showdown with the U.S. Environmental Protection Agency over air quality concerns and trigger lawsuits over what is essentially a state takeover.
Gov. Cox has been pressured to veto the bill from the Intermountain Power Agency (which oversees IPP), communities across Utah with a stake in it and even a member of the Public Service Commission, which oversees utility rates in the state. On Thursday at his monthly news conference on PBS Utah, the governor told FOX 13 News he will sign it.
"We will, however, be working with the legislature on some things that we think could be done better," he said.
Gov. Cox said energy is very important to the state and any time they look to close down a facility, "we ought to be cautious about that."
"If there are opportunities to keep those facilities running, we’re going to want to exhaust every potential, every possibility out there making sure we're complying with environmental regulations that are in place and seeing if we can thread that needle," he said.
Intermountain Power Agency declined to comment to FOX 13 News on the governor's announcement he'll sign the bill. In its letter to Gov. Cox urging a veto, the agency warned that the bill interferes with municipal control of the plant, poses a threat to its multi-billion dollar energy projects, conflicts with air quality commitments the state has made and will not save coal jobs.
"I don’t really like the idea of the state coming in and taking over a municipal enterprise like this," Oak City Mayor Shim Callister told FOX 13 News. "I think it was all bonded and not done with any state monies. Are they going to take over a coal mine next to make sure we have coal?"
Mayor Callister said he believed that IPP's new energy source projects will help benefit rural Utah. He also warned that for a small community like his, litigation over IPP could impact the budget. For every $1 million spent, the mayor said, it could be $40,000 out of Oak City's budget as a partner in the project.
"This bill would essentially put the legislature in charge of this asset that has run for decades with local officials," said Bountiful City Manager Gary Hill.
Bountiful, which is also a partner in the IPA, urged a veto and has argued that SB161 could lead to increased rates for its municipal power customers.
"The way the bill is drafted now, it would require IPA to go through a hasty and expensive process to try and get a new air quality permit which we think is unlikely," Hill told FOX 13 News on Thursday. "All of that money will have to be paid for by ratepayers."
Gov. Cox acknowledged that a state takeover of a coal plant is unusual.
"We don’t operate plants like that and so I think what we would be looking at is the opportunity for a third party — if one exists — that would be interested ultimately in purchasing the property," he said.
