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Show Power negotiations start; agreement still far off i Wig-' v 'AS,' 0 - II dZLfl ' ' yl ' ' "No doubt," countered Fadel. The negotiators for the City feel that a current favorable contract between UP&L and CPN should be continued between UP&L and the City. Such a contract would supply power to the City at about two cents per kilowatt hour, rather than a possib'e four cents or more without the cot. tract, said Jess Pickett of the Parowan Valley Pumpers. Pum-pers. "The people here are entitled to those supply contracts," said Fadel. But Topham stood firm saying that a new contract would need to be reached and the City would need to find a completely independent power source by 1!)K(), rather than 1991, as the City would like. Financing of the purchase Another major issue was the financing finan-cing of the purchase by the City. The City and the Southwest Power Agency have maintained all along that the various communities would pool their bonding power and purchase one large bond to pay for all the systems, with the cities paying back the Agency and the Agency paying off the bond. squared off across the table from attorney at-torney George Fadel and negotiating team members Barbara Starr, Frank Staheli, Claude Glazier and Leon Bowler over the Cedar City system Monday. Most parties agreed that once basic agreements on the Cedar City system were reached, that the other agreements with other communities , would be reached somewhat easier. Both parties quickly presented sample option agreements that they felt would meet their needs, but upon review by the opposite parties it was clear that there were several major points of disagreement. Purchase price Probably the most basic argument came concerning a purchase price for the system. However, the disagreement centered not around a dollar figure but around how to' reach that figure. Fadel argued that the price should be based upon the price UP&L is paying CPN for the system, and he said that the PSC order supports him on that. However, UP&L attorney Topham countered that the price should be By BRUCE LEE Record Editor Negotiators for southern Utah municipalities and Utah Power & Light Company concerning the proposed sale of electric properties in the area to the communities squared off Monday and Tuesday and it looks to be a long fight. The negotiations were ordered by the Utah, Public Service Commission earlier this year, after over a year of hearings and arguments concerning who should own the CP National system in Southern Utah. The Southwest Utah Cooperative Power Federation was formed to ? purchase the system, but CPN sold it to I UP&L, saying it could never reach a viable deal with the Federation. Since then the Federation and a group of mayors from the communities have tried to block the sale with the PSC; Out of that argument came the order that UP&L grant purchase options op-tions to the individual municipalities. Several major disagreements UP&L attorneys Helen Edwards, James Taylor and Verl Topham Leon Bowler (left), a member of the negotiating team, makes a point while George Fadel, attorney for the Southwest South-west Utah Cooperative Power Federation and Agency, listens. The negotiations for Cedar City and several other area communities to purchase their municipal power systems from Utah Power & Light began Monday and Tuesday and will continue Oct. 5 and 6. countered that the price should be figured on a complicated formula involving in-volving book value of the inventory. Several basic questions were left unresolved, including whether an inventory in-ventory of the system is necessary, and, if so, who should pay for the inventory in-ventory and who conducts it. Topham estimated the cost of such at $25,000 - and felt that Cedar City should pay for it. However, Fadel pointed out that the City had already commissioned one inventory and it could be used. "For UP&L to come along and say they need to pay for another inventory would be unfair," said Bowler, and both parties agreed that UP&L would look at the inventory and decide if it would be acceptable. v Power supply Yet, the issue that the two groups were probably the furthest apart on involved the power supply of the City, both in the near future and down the road several years, when, according to the PSC order, the City must find an independent power supply, outside of UP&L sources. "I think we're pretty far apart on that issue," said Topham. However, Topham said that if such action were taken, UP&L would exercise its right of first refusal and take the systems back. He said that each system would need to be financed separately. The stand taken by UP&L upset Fadel, who said that the issue would probably need to go back to the PSC to be decided. "We're here to try to buy the thing without all the shenanigans," he said. Maintenance and additions Another point of major disagreement concerned what rights UP&L had concerning maintenance and addition to the system from now to closing time of any agreement, a term that could extend up to 24 months or more. UP&L's concern was its servicing of a customer just outside of a community and on the other side of the town from the company's power source or substations. Topham said UP&L should be able to build or upgrade a line through the city, rather than building clear around it, and should be able to bill the city for the improvement. |