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Show "Sure we would make negotiations to sell to Cedar City," Ross Workman, president of California-Pacific Utilities told an interested local audience Wednesday evening. "If it is a good deal for our shareholders, we'll consider anything." But, Workman added, "I don't want to indicate that we want to negotiate." Workman was in Cedar City to visit with members of the Cedar City Power Feasibility Study Board and interested council members and residents, his visit prompted by a letter from the power board to local vice-president Pete Paris. The letter had asked Mr. Paris to estimate revenuos and capital investments within the Cedar City limits. Workman said he preferred to answer such questions in person. Complicated problems The San Francisco based company president said there are some "very complicated problems involved" should Cedar City decide to "go municipal" Among the problems listed by Workman under the hypothetical situation were: -substatioas. "Should Cedar City buy half of a substation, which serves them and other customers, or should they build a new one or buy the whole thing?" Workman asked the group. -the diesel and coal powered generators used for peaking. the lines that cross the city limits. "We would have to rearrange our distribution system," Workman siad. -the transmission system from the Sigurd sbustation to Parowan and the projected Parowan to Cedar City line was questioned by Workman. Who would continue to pay for that, he queried. Customer Density -customer density. "Those left behind would result in a less economic situation for us ," Workman said. "It might mean that the cost to serve those who live out of town becomes so outrageously high, they can't afford our power. I don't know what happens at that point. "The person who is going to get hurt (if CUP is bought out by Cedar City) is the person outside the city limits. The shareholders might do all right. The city might even make out. But the guy just ouside the city limits is definately going to get hurt and get hurt bad." Workman said he questioned whether the city would "make out," whereas taxes and interest would be the only difference from the the present situation. "But maybe you can operate cheaper than us, I don't know," he added. He said the capital of the CPU system in Iron and Washington Counties amounts to $18 million. City Manager Mike Embley said, judging from franchise taxes applied to revenue, the revenues to CPU in Cedar City amount to $18.7 million annually. Workman explained that it is hard to give a "fair market value" to the utility, "because it isn't something that sells very often." He said such figures are often arrived in com-dendation com-dendation proceedings. These figures are reached by methods such as original cost; original cost, plus depreciation; replacement value at current prices; and replacement value plus depreciation. Past condemnation con-demnation proceedings have shown (continued on page 3) jx'CPU Pres. (continued from page 1) the value is never lower than the original cost, Workman added. "Fight hard" "Workman emphasized in his opening remarks his actions are dictated by the stockholders of the company. He said a sale to Cedar City would not come about if the deal looks bad to the stockholders. "If the board approves, I could sell the whole thing," Workman said. "But it has to be fair to those people. If it looks unfair, I will fight it and fight as hard as I can to keep their money. That's my position." Workman said the contract to CPU presently has with Utah Power and Light for wholesale power is not transferable . If Cedar City owned the distribution system, the contract would have to be negotiated seperately with UP&L, he said. The utility head said the company has no plans to change to any other source of power than UP & L. "But if something more economical came along, we could change. The Public Service Commission dictates that we would have to." He said the company has no relationship with any geothermal exploration in the Milford area. Severance possibilities When asked whether CPU could consider it more attractive to sell the entire system in its Southern Utah Division, Workman said it depends on the price. He reminded the group that severance damages to customers in outlying areas are a possibility if Cedar City is on a seperate system. Without knowing the end result of the feasibility study, Workman said he could not estimate how many employees would be lost to the local CPU office. He said it is obvious there would be some duplication with the municipal system. |