Bountiful Power “Call-Backs and Resales”

I’ll keep this short.

Bountiful Power and Light Director Alan Johnson thinks he can better leverage money by selling excess power purchases on the market and the City Council approves:

“We sign a contract with IPP (Intermountain Power Project), where we’re able to bring power back flat,” he said…

“…In our case, in the summer, where we’re warmer in July, we have a peak load of 80 megawatts, and a six month lull in April-September,” he said. “In April, our peak load may only be 40 megawatts. If we pull IPP power back in a block, we end up with surplus, extra power in April that citizens won’t be using.”

That’s why the Bountiful City Council approved a “call-backs and resales” option, Tuesday night. That means BL&P could sell its excess power, if possible, at the price it paid or potentially more.

That may well be a good thing, and Mr. Johnson should be commended, depending how the money is used.

There are two strong warnings, however, with this policy:

1. Since the power department is owned by the City (government), risk and sustained funding is assumed by taxpayers.  Selling power on the market will bring the temptation to intentionally purchase surplus amounts of power in an effort to make more money.  This would result in speculative trading using taxpayer money and leaving taxpayers shouldering the risks.  That would simply not be acceptible.

2. Bountiful residents have already seen their rates and fees jump significant amounts. Additionally, each year, Bountiful City takes about $2 million from the power department (due to inflated power rates) and puts the money into city coffers.  If money is made on the resale, residents, and not the city, should reap the benefit.

Despite BP&L being owned by the city and not subject to the taxes, regulatory oversight, profit requirements, and other overhead, rates are now higher than Rocky Mountain Power’s.  The rate discrepency, is a result of the sustained transfer of millions into city budgets.   It should also be noted that inflated rates will affect the poor and those living on fixed incomes proportionally more than others.

In either case (especially, the first), regulatory oversight by the Public Service Commission should be placed on the dealings of municipal power companies.

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2 thoughts on “Bountiful Power “Call-Backs and Resales”

  1. Pingback: Perrenial Bountiful City Spin: Taxes and Power Rates « Utah Rattler

  2. Pingback: Perennial Bountiful City Spin: Taxes and Power Rates « Utah Rattler

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