OCR Text |
Show PSC's 'Round 3' begins SALT LAKE CITY The Public Service Commission hearings concerning con-cerning the proposed sale of CP National electric properties in the area to Utah Power & Light continued in Salt Lake City this week. The first two days were full of testimony concerning the financial plans and status of the two electric companies and the Southwest Utah Cooperative Power Federation, which is a attempting also to buy the system and provide a municipal power system for the area. One of the major witnesses called by UP&L during the early sessions was Orrin T. Colby, Jr., assistant controller for the company. Colby testified that he had been involved in-volved in all or most of the negotiations in the sale of the system with both CPN and the SUCPF. He continued that the set purchase price of the system was $20 million, plus such items as tax consequences, accounts ac-counts receivable and improvements to the system. Originally, it was announced that these additions would bring the total cost to around $23.4 million. Colby stated that many items and costs had changed and that the total price would now by closer to $20.9 million. Helen Edwards, an attorney for UP&L, later explained the change. "Those items are in a state of flux. With the passage of time ... all of these things have changed so it was necessary to revise the exhibits and bring them up-to-date." In the process of cross examination Grant MacFarlane, attorney for CPN, pointed o out that his company estimated that UP&L would need to spend considerably less than an earlier estimate of $17 million for upgrading the system. Colby concluded his regular testimony by summarizing UP&L's ability to pay the proposed purchase price: "There seemed to be some concern as to the ability of the company to raise this amount of money." However, he continued, "the $23 million purchase price amounts to about 4'z percent of the company's annual revenues, or roughly equal to one month's construction program or one-tenth of 1 percent of the company's total capitalization of property investments. in-vestments. We see no particular difficulty dif-ficulty in raising the necessary funds." In other action, James Barker, an attorney representing the committee of consumer services, presented for administrative notice of the commission com-mission resolutions from 13 city councils, stating that they understood the administrative organization of the SUCPF and the proposals for financing the purchase of the system. In the past there has been some concern that the city officials really didn't understand the acquisition and management procedures. The move prompted MacFarlane to question Barker extensively concerning con-cerning the origin of the letters. MacFarlane produced a letter, signed by SUCPF President Carl Palmer requesting city councils to return a form letter to Barker explaining their understanding of the issues. Barker noted that he didn't write the letter. Barker later told reporters that, although he knew of the existence of the letter, and had, indeed, requested it, he didn't feel it right for him to divulge client confidences in the hearings. During the course of discussing the financial ramifications of the purchase pur-chase of the system by either UP&L or the SUCPF, many lawyers and witnesses wit-nesses discussed the validity of relying upon the Ford, Bacon and Davis study. The study was commissioned in 1977 to determine if it were economically feasible for the cities of the area to purchase the system. In cross-examination, Cedar City Councilwoman Barbara Starr stated that although the city relied upon the study to begin the process of acquiring the system, it no longer did so because many changes had occured since that time that changed the value of the system. The hearings will continue throughout the week, with the commission com-mission hoping to finish them Friday. |