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By Myrna Trauntvein
TN Correspondent

The report done by city staff on the proposed 138 kV project area for the city council indicated that the project did meet most of the criteria for annexing the property.

“The need for municipal services exists,” said Seth Atkinson, city administrator. “Several property owners in the 138 kV project area have requested municipal services including water and power.”

Since there are at least two large businesses that would like to receive municipal services, this helps to eliminate the need for a special service district or county-operated municipal services to service these businesses. In exchange for these utility service connections, easements have been granted to place the city’s 138 kV transmission line.

“Water and natural gas lines have already been placed along the same rout and were partially paid for by the Utah Army National Guard for their new Readiness Center near the airport,” said Atkinson. “Any extension of the sewer or connection to the existing services and future power services would be paid by new and existing development”.

The annexation policy plan states that the city has a policy of discouraging annexations for residential uses so that the city will in-fill. The north area of this proposed annexation would be mainly for industrial and commercial purposes.

“The southern portion of the proposed annexation could be used for residential uses behind any zones along Main Street,” said Atkinson. “The purpose of the 138 kV Project Area Plan is to enable the city council to control the northern growth through zoning.”

Nephi has a strategic location with major transportation corridors and proximity to the Wasatch Front and the Union Pacific Railroad. One of the businesses in the proposed annexation area is making use of the railroad through a spur.

“This proposed annexation would aid in the expansion of the city’s electric service,” he said. “A new transmission line is critical for the provision of electric service to the new and expanding businesses in Nephi.”

The extension of power services will be paid by the city as part of the transmission line project. Connections to a distribution line will be paid by businesses or developments requesting the service.

It is anticipated that the majority of the costs of this transmission line extension will be covered by large power users. Some of the power users are on the system and expanding their uses. Others will be new businesses.

In addition, two existing businesses in the proposed annexation area will help fund the transmission line project.

“To date, the city uses approximately 24 Megawatts during its peak season,” said Atkinson. “The new and expanding businesses are expected to add approximately 8 Megawatts of load. Revenues from these services will be significant and will contribute much toward extensions costs.”

The city anticipates receiving additional property taxes from the area being developed as well as additional sales taxes from business located in the area engaging in retail sales.

The existing businesses in the proposed annexation area may contribute to the growth of the city as they become fully operational. The council can use the 138 kV Project Area Plan and their zoning authority to control the pace of growth.

“Currently, the city’s population growth is below those projected in the annexation policy plan,” said Atkinson.

Services to the area could be provided since water and natural gas utilities are already extended to the area and a distribution line can be added to transmission poles to provide electric services. Most of the land in the proposed annexation is undeveloped land and the potential annexation affects a city goal of preserving and enhancing the rural image of the city.

Existing businesses to the north have installed septic tanks for wastewater purposes. Those properties would need to sign an annexation agreement that would specify that if a sewer becomes available they would be required to connect. Any extensions of the sewer lines or lift stations would be paid for by developers.

“The proposed annexation would provide services to an area that is highly likely to produce industrial and commercial businesses,” said Atkinson.

The corridor has access to the I-15 freeway, Main Street, Old Highway 91 and the railroad and the undeveloped north Nephi freeway exit.

The proposed annexation is a critical component to securing the easements necessary for the installation of a city transmission line. By providing the transmission line, the city is expanding their electric grid and will provide many years of electrical capacity.

In addition, the proposed annexation can significantly reduce the costs of the transmission project by securing easements in exchange for power services and enabling a relatively straight line for the transmission installation thus reducing power pole costs.

The project will also connect two significant businesses with power service and provide future cash flows for the electric fund. Based on the current economic conditions, timing is also a cost for the project. The more negotiations that would need to occur with additional land owners on an alternative route would add time and significant pole costs which are currently $300,000 per pole.

In addition, the current tumultuous interest rates being seen by the Federal Reserve, more time seeking alternatives routes would add more interest costs. Moving the project forward expeditiously will save funds.

The proposed annexation enables efficient design of the transmission line.

Connecting existing businesses for future cash flows will help offset the costs of the project.

“The 138 kV project is critical to ensure that reliability, redundancy and capacity meet the needs of Nephi’s current and future residents and businesses,” said Atkinson.