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Show I LJDr-Dff Dcidss cnrf? tharx Esses? .! The question has been raised "Can we afford to lose the tax base, if we go to municipal power?" I What loss of tax base? . First off it should be recognized that :! it is VERY UNLIKELY that the first or second geothermal power plants at Roose-;i Roose-;i velt Springs will be built by private enter -: prise. Most likely they will be built or owned by public utilities, either Beaver County or some other public entity. 'J If the City of Burbank, Bountiful, Provo or Murray, cities which are strongly con- siderlng generating geothermal power at ) Roosevelt Springs build power plants, they I will be just as tax exempt as if they were built by Beaver County and the cities of Beaver County. V There is good reason for this. Muni- ; cipal corporations, or municipalities work -I ing under an interlocal agreement such as " Beaver, Minersville, Milford and Beaver ! County would do, are available for federal i energy loan guarantees, which are of little benefit to private industry. These loans guarantee up to 75 of the total cost of construction. Stipulations in the loan agree -ment make these loans unattractive to private pri-vate Industry. Low risk companies like Utah Power and Light are unwilling to tie up their entire en-tire assets on a small power plant, when they can build thermal power plants with less risk. For instance, UP&L has known reserves re-serves of coal and water, and any risk on geothermal, no matter how small, would be more than that of a thermal power plant. Therefore, they are willing to let others take any risk at Roosevelt Springs, knowing know-ing that even a small 20 megawatt power plant wil prove the reservoir and remove re-move almost all risk. Once the reservoir Is proven, UP&L can jump on the band wagon with larger power plants with most of the risk gone. UP&L owns 25 of the proposed 3000 megawatt power plant at Lynndyl or Wayne i.'L County, wherever it's built. However, they have no risk in the construction of the plant, because their 25 is in water and j . coal, which won't be used until the plant is built. Therefore, their partners in IPP accept all the risks, while UP&L will reap 25 of the benefits if the project pro-ject is successful. This is not criticism of UP&L, but good business on their part. However, it is an explanation as to why they have thrown a cold shoulder on Roosevelt Springs and why the first geothermal power plants at Roosevelt will be built by public utilities. Since the geothermal wells will be drilled by private industry, and taxed, construction by Beaver County of a power plant, would still provide an increased tax base. We cannot overlook that UP&L is presently one of the largest taxpayers in Beaver County, including Milford and Mic nersville. These are taxes on their distribution dis-tribution system and Beaver River generating gener-ating facilities. However, there is no reason rea-son to believe that if UP&L can pay these taxes and pay a generous guaranteed dividend divi-dend to its stockholders, through sales of power, that Beaver County cannot generate revenues to replace these taxes and retire re-tire the bonds to purchase UP&L's distribution distri-bution facilities, through the same power sales. In fact the evidence indicates that Beaver County should be able to stabilize it's economy, and with attractive power rates, attract new industry, and badly needed growth to the area. Admittedly not all the facts and figures fig-ures are available as yet. But actions by Milford, Minersville and Beaver Cities last week will provide the opportunity to explore every avenue before forming Beaver Bea-ver County Power Authority and taking on any financial burden. We strongly support the city council's decision to support and participate with the County Commission 's further study of this very important research. Milford City as a legal municipality, will act as the lead agency. We believe that since the Commissioners have carried the ball in getting the feasibility study, they should be appointed as coordinating agent by the three cities to continue the studies to avoid delay and duplication. "Red" |
