Show FULL TEXT OF RECOMMENDATION pages 8 9 10 of official report 1 I recommend against the purchase pur pur- chase chas of the proposed 1000 KW engine by Bountiful at this time 2 I recommend that Bountiful continue to generate electricity electricity electric electric- ity for the time being with its pres present nt equipment utilizIng utilizing ing the maximum amount of natural gas now available 3 3 I 1 recommend that Bountiful continue to purchase all ail supplemental supplemental sup sup- energy for the time being 4 I recommend further study of the economic feasibility of ol purchasing all energy at wholesale In this recommendation I am of course aware there is s some me com om- pride of ownership in a Power Plant This recommendation however makes no allowance for such Buch pride e of ownership It is based solely on economics My Mr recommendations are also based basel on Information given riven me by Mr Hillard Chief Engineer at the Mountain Fuel Supply Company that the maximum amount of ot gas all as available to the he City of Bountiful Bountiful is cu ft per day dap He further further further fur fur- ther stated that he could give no assurance as to when if at all any ny additional gas would be available I 1 have further checked with the Public Service Commission Engi Engl I neer who advises that any recommendation recommendation recommendation to make more gas available available avail avail- able would have to originate with the Gas Company and be sub etto etto et ct to approval of ol the Commission Due largely to poor load factor of the system the generating plant plantIs plantIs Is not and would not even with addition addition ad ad- of or the 1000 KW engine be too efficient nor is the load factor likely to improve to an any great extent ex tent in the future If the proposed 1000 KW engine is added the present supply of gas could of course b be diverted to the new en engine ine One of ol the three present pres ent eat engines No 7 now burning gas would have only a s partial supply of gas which would have nave to be supplemented sup by higher cost diesel oil Two other of the present gas burn bum ing engines No 5 and No 6 cannot cannot cannot can can- not operate on oil and with no gas available for them would have to stand idle This together tORether with the limited sUI supply Ply of gas as for No 7 engine will result to in overall production production pro pro- cost per Kwh higher than continuing as at present Even if the proposed 1000 KW engine is added energy in considerable considerable consid erable amounts will still have to be purchased or more engines installed ti to tv provide peak ener Y and standby standby stand stand- by either o of which will be at costs per Kwh greater than under the present plan The problem will not be solved by plant additions Even if a temporary temporary tem tem- ry solution might exist by this method the same problem would be beback beback beback back again every 2 or 3 years This would require further bond issues public approval of which is always difficult While it is true that the addition of the proposed new 1000 KW engine generator will permit greater great efficiency efficiency effi effi- in utilization of the pr present sent gas at s sc c considerable considerable supply l a this s can additional t only al be investment investment invest invest- done ment cost When the increased in investment investment investment in- in vestment cost is added to the th Increased in increased increased in- in creased unit cost of peak energy the result is an overall cost greater than continuing the present plant supplemented supplement d by purchased energy By L Edition addition of the proposed 1000 KW en engine ne the overall cost for energy required will increase from the present to per Kwh This means an additional cost of about per year To this must be added additional cash outlays for lor annual bond principal rep repayment and for interest on outstanding outstanding out out- standing bonds During the first few years these would average 25 to additional cash to be De e paid out each year This would require an increase in rates of lo 16 15 0 if the 1000 KW engine is installed In view of the definite savings indicated through purchase of all energy at wholesale wholesale as compared with either of the first two plans I recommend further study be made of the economic feasibility of disposing disposing disposing dis dis- posing of the generating plant and purchasing all aU energy requirements This study should include the costs of purchasing energy at volts through a substation as well as purchased at volts as at present The wisdom of such a study is ia apparent If Bountiful City is interested solely in the economics of its system and makes no allowance allow allow- ance for pride of ownership The City could continue to own Its Us its distribution distribution distribution dis dis- system which based on past rates should show an improved improved improved im im- im- im proved profit Respectfully submitted A. A LEROY TAYLOR |