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UMPA Director Leon Pexton right, discusses UMPA benefits with Nephi City Council

By Myrna Trauntvein
Times-News Correspondent

Utilities are the largest portion of a city's budget but membership in Utah Municipal Power Agency (UMPA) continues to benefit Nephi (and Levan).

Leon Pexton, UMPA director, and Layne Burningham, chief financial and power resource manager, met with Nephi City Council to discuss some of the issues surrounding electric power and UMPA.

One concern which Pexton pointed out was the falling level of Lake Powell because of the drought. Those falling levels do have an impact locally.

"We are in our sixth year of drought," said Pexton. "Last year was the lowest water level for Lake Powell in that history."

The good news, he said, was that for UMPA users the cost of power has remained flat.

But never, in the history of the Colorado River Basin above Lake Powell, has there been a six year drought, he said.

"We are entering the six year of drought&emdash;the first time in 100 years of recorded history," he said.

Pexton showed several slides of the elevation levels at Lake Powell beginning with one of September 1999. In that year, Lake Powell was 85 percent full.

In September 2000, it was 78 percent full, in September 2001, it was 71 percent full, in September 2002, it was 53 percent full, In September 2003, it was 44 percent full, and in September 2004, the lake was 36 percent full.

In 1966, the Glen Canyon Dam was completed and, during the flood years in the early 1980s, reached a record capacity. It was its highest ever a more than 3,700 feet above sea level which occurred in 1983. In July of 2004, the lake was at 43 percent of capacity, a level it had not been as low as since 1970.

In 1970, the lake was still filling and had not reached projected capacity.

"When the lake drops so low that it reaches the penstock, then the power will automatically shut off," said Pexton.

He reminded the council that, in the 1970s, there had been a concern about Rainbow Bridge and it was feared that the bridge, a natural stone arch, would be destroyed. In an aerial photo, Pexton showed that the bridge was high and dry and no longer threatened at all.

Another concern, said Pexton, was that Lake Mead is also low.

"They try to equalize the two bodies of water and keep them the same," said Pexton.

The point being that, even if the drought were to end this year, it would be some time before the lakes would reach a level where they were capable of producing as much power as they did in the 1980s.

"It is projected to take 20 years of normal hydrology for Lake Powell to recover," said Pexton. "It would take six consecutive years of 1983 hydrology for Lake Powell to recover."

The other reality is that the levels could continue to fall this year. If that were the case, by February 2006, the water level could drop below the penstock. If that is to occur, the Bureau of Reclamation doesn't have a plan for backup power.

UMPA does, however.

"We have enough resource to take us into 2014," said Pexton.

One catch is that the power is low cost but it is not as low cost as CRSP (Colorado River Storage Power).

"Ninety-three percent of the budget increase is attributable to the reduction in CRSP energy," he said.

In 2003, CRSP was 36 percent of the UMPA budget, in 2004 it was 37 percent, and in 2005 it will be 26 percent. Less expensive power has been replaced with more expensive power.

UMPA is looking at the hydrology concerns, said Pexton.

"There is a one in six chance Lake Powell's water level will fall below generation level by February 2006," he said.

UMPA has refunded debt savings beginning in the financial year of 2004.

"The debt mitigation fund is fantastic," said Chad Brough, mayor. "We have not raised our rates in six years."

"Cove Fort sale savings, beginning in 2004, will be over $1 million per year," said Pexton. "Your mayor was involved in that decision."

UMPA has utilized the rate stabilization fund, maximized resource utilization and market opportunities, and negotiated power supply contracts at below market rates.

UMPA also utilizes operation efficiencies and, through a strategic resource acquisition program to match quantity and timing of new resources has helped member cities.

"Our goal focus is a strategic plan of stable rates in a volatile market," he said. "UMPA's six member cities were the only ones in the state not forced to raise rates because of the California meltdown."

"We wanted you to know, as a member city, that we are planning ahead to be prepared," said Pexton.

Long-term, hydro was the best source of power. Water is cheap fuel, he said.

"Coal is next," said Pexton. "From there we go downhill in a hurry. For example, natural gas is a volatile price market."

New technology is looking into burning low-grade coal and other types of fuel.

Being a member of UMPA has been a great benefit for Nephi, said Brough.

"I was the Mayor of Nephi on Sept. 17, 1980, who signed the documents allowing us to become a member of UMPA," said Pexton.