Intermountain Power Project (IPP)

The Intermountain Power Project (IPP) is one of the major construction projects of the 1980's in the Intermountain West. It is a 1,522 megawatt, coal-fueled power generating facility located in west central Utah which will provide electrical power to southern California through a 500 kilovolt (kV) direct current transmission system. Power will also be supplied to Utah and Nevada through a northern transmission consisting of two 345 kV lines to Mona, Utah, 46 miles east, and one 230 kV line to Gonder, Nevada, 144 miles west. (Gonder is six miles north of Ely.) The Project is expected to cost $5.5 billion ($3.342 billion with financing costs excluded). Commercial operation for the first unit is scheduled for July, 1986, and completion is set for July, 1987.

The owner of IPP is the Intermountain Power Agency (IPA), a political subdivision of the State of Utah organized under the Interlocal Cooperation Act, Title 11, Chapter 13 Utah Code Annotated 1953, as amended. IPA was formed by 23 municipalities within Utah to own and finance IPP. The project has been financed with tax-exempt revenue bonds, using as collateral power sale contracts between IPA and 36 power purchasers located in Utah, Nevada, and California.

The concept for the Intermountain Power Project began in 1970 when the Intermountain Consumer Power Association (ICPA) was notified by the Federal government that there would not be sufficient energy available to meet its needs from the Colorado River Storage Project after 1976. Following this notice, ICPA began considering alternatives for future resources and in 1973 met with a number of Southern California municipalities to explore interest in a joint action agency power project.

As a result of these activities, the Intermountain Power Project Corporation was formed as a non-profit corporation under the laws of the State of Utah on January 18, 1974 for the purpose of investigating the feasibility of constructing and operating a thermal powered generating resource. Shortly thereafter, in July 1974, ICPA and the California Purchasers entered into the IPP Membership and Study Agreement, setting forth membership interests and voting rights in IPP. In March 1977, the Utah State Legislature amended the Act to allow municipalities to jointly develop electric generating facilities, and on June 22, 1977, the 23 Utah municipalities listed above organized IPA as a political subdivision of the State of Utah to finance, construct and operate the Project.

Approximately one year later, on August 24, 1978, Power Sales Contracts were offered and in response the 23 Utah municipalities, six Utah cooperatives, Utah Power & Light Company, and six California municipalities agreed to accept the generation and capacity of the Project. The Power Sales Contracts were signed as of September 28, 1978 with the exception of the California Purchasers which signed as of August 6, 1980. The Power Sales Contracts provide for, among other things, the creation of the Coordinating Committee and for IPA and the Los Angeles Department of Water and Power (the "Department") to enter into a Construction Management and Operating Agreement.

The three main components of the Project are located primarily in Utah and California. The Generation Station is located near Lynndyl, Millard County, Utah. The STS extends approximately 490 miles from the Generation Station to Adelanto, California with an alternating current/direct current converter station at each end. The Northern Transmission System (the "NTS") consists of two segments. The first segment, consisting of two parallel 345-kV AC transmission lines, extends approximately 50 miles from the Generation Station to a switchyard located near Mona, Utah. The second segment, consisting of a single 230-kV AC transmission line, extends approximately 144 miles from the Generation Station to the Gonder Switchyard located eight miles north of Ely, Nevada.

The West Ridge Project consists of the West Ridge Mine which is now under development in the Book Cliffs coal region in central Utah near East Carbon. The project is owned on a 50/50 basis by Intermountain Power Agency and ANDALEX Resources, Inc. It is being developed and will be operated by West Ridge Resources, Inc., a wholly owned subsidiary of ANDALEX Resources, Inc. ANDALEX will also be responsible for the marketing of the production. West Ridge will be a longwall mining operation with full production planned for the year 2001 at the rate of 3.5 million tons per year.

A portion of the coal used is loaded at the Andalex Loadout located at Wildcat, UT on the Utah RY. IPPX has their own unit train hoppers.

The Intermountain Power Agency (IPA) and its Intermountain Power Project (IPP), located just north of Delta, Utah, were created in 1976 to meet the power needs of some 23 public agencies and municipalities in Utah. The Los Angeles Department of Water and Power is the operating agent, as nearly all IPP power is exported to 27 California municipalities until such time as Utah allotments are called in to meet in-state demand.

As of April 2004, IPP increased its capacity rating to 1,800 MW, making it the largest power generation facility in Utah. In 2003, IPP generated a net of 13,553 GWh of power and purchased 5.3 million tons of Utah coal, the majority of which came from Canyon Fuel mines. The remaining amount of coal was supplied by the Andalex mines, two of which are partly owned by IPA. In addition, a small amount of coal was purchased from the Emery mine before it became idle in August 2003.

Plans for expanding IPP by adding a third unit would increase generation capability by another 950 MW in 2009. This additional capacity is intended to supply power to communities in Utah, New Mexico and Arizona. Coal consumption would rise almost 40 percent with such an expansion. This new demand is expected to be met mostly by Utah coal, particularly from the mines jointly owned by IPA and Andalex. (Documents on file at Utah Geologic Survey)

1957
The Utah Cooperative Association begins exploring methods to secure low cost hydroelectric power from the Colorado River Storage Project. The Intermountain Consumer Power Association (ICPA) is formed to provide direct support for acquiring the power.

1970
The U.S. Bureau of Reclamation notifies ICPA that expected energy resources from federal dams would not meet projected ICPA load growth requirements after 1975. ICPA begins investigation of alternative sources of power for future requirements.

1973
ICPA representatives meet with Southern California municipalities to identify interest in the development of a joint action power project.

1974
The Intermountain Power Project is formed as a nonprofit corporation under Utah law to investigate the feasibility of constructing and operating a thermal power generating plant and associated facilities. The Project is joined by ICPA and six southern California cities. Salt Wash near Caineville, Utah, in Wayne County is recommended as the primary study site.

1977
The Utah State Legislature amends the Utah Interlocal Cooperation Act to allow municipalities to jointly develop electric generating facilities. Twenty-three Utah municipalities organize the Intermountain Power Agency as a political subdivision of the State of Utah to construct and operate the Intermountain Power Project. Utah Governor Scott M. Matheson, after conferring with Interior Secretary Cecil Andrus, directs the formation of an Interagency Task Force on Power Plant Siting to consider alternate sites for IPP. The task force recommends an alternative site near Lynndyl, in Millard County.

1978
IPP authorizes engineering and environmental studies necessary to incorporate the Lynndyl Alternative Site into the IPP Environmental Impact Statement. Power sales contracts are entered into with 23 municipalities, six rural electric cooperatives and Utah Power & Light Co. IPA adopts the Power Supply Bond Resolution.

1979
Interior Secretary Andrus announces approval of the Lynndyl Alternative Site for construction of the Intermountain Power Project.

1980
IPP acquires surface and underground water from five Millard County irrigation companies. Consulting engineers are retained. Power sales contracts are entered into with six southern California municipalities. The Los Angeles Department of Water and Power is designated Project Manager and Operating Agent. Assets of the Intermountain Power Project are transferred to IPA. The IPP Board of Directors is dissolved and the IPP Coordinating Committee is formed.

1981
Millard County approves a permit allowing construction to begin. $300 million of initial project capital funding is received from the sale of 1981 Series A Bonds. A groundbreaking ceremony is held on October 9 in Delta, Utah, and at the Project site.

1982
Bechtel Power Corporation is approved as Construction Manager and installation of structural concrete begins. A Project Operating and Maintenance Plan is adopted, establishing the Intermountain Power Service Corporation. Coal supply contracts are executed with two Utah mines.

1983
Structural steel erection commences. IPA issues $900 million in 1983 Series A Bonds -- representing the largest joint action agency financing in history. Coal supply contracts are executed with four more Utah mines. The Unit 1 steam drum is lifted into position.

1984
Installation of wire and cable begins. A groundbreaking ceremony is held in Springville, Utah, for construction of the IPP Railcar Service Center. A contract is executed with Union Pacific Railroad for coal delivery. Initial project financing of $4 billion is completed by IPA.

1985
First scheduled coal train arrives at the Project site. Unit 1 boiler is fired. Construction of the Southern and Northern Transmission lines is completed.

1986
Turbine roll of Unit 1 is initiated in February and the Unit is declared commercially available in June. The First Generation Celebration commemorating the completion of Unit 1 is held at the Project site on September 10.

Andrus approves new power plant in Utah desert -- Salt Lake City (UPI) -- Interior Secretary Cecil Andrus has approved a location In Utah's western desert as the site for the world's largest coal-fired power plant -- a 3,000 megawatt giant that will provide electricity for Los Angeles County and dozens of small cities in Utah and Nevada. In a speech to the Intermountain Power Association Wednesday night. Andrus sanctioned a site near Lynndyl. Utah, ending two years of dispute over possible locations for the $4.5 billion Intermountain Power Project. At full production, the facility will generate daily as much electricity as Utah consumes in a year. Fifty-eight percent go to Los Angeles and five of its suburbs. It will also consume nine million tons of coat annually, an amount equal to Utah's current total coal production.

Transmission Line Completed On Time -- Right on schedule, to the exact day, the Intermountain Power Project's (IPP) 490 mile transmission line from Utah to California was completed.

The line, which was started May 1, 1984 was completed Monday, Sept. 16. The final spans of wire were attached at the towers and racks by the two contractors who divided construction of the line, Commonwealth Electric Company of Marietta, Georgia, and Irby Construction of Jackson, Mississippi.

IPP's site manager for the transmission line, Mike Pontius, attributed the timely completion to the quality of the supplies, the contractors, and the work force. "Completing this large and complex project on schedule is a tribute to a productive work force and excellent contractors," he said.

The contractors employed 600 workers to construct the line, about 300 each. Commonwealth constructed the 239 mile portion from Adelanto, California, to Moapa, Nevada. and Irby constructed the 250 mile portion from Delta to Moapa. Except for the initial tower survey, the contractors were responsible for all phases of the construction.

The first phase involved cutting the access roads. The second phase was the excavation and construction of the footings of the steel towers. The footings were poured to an average depth of 20 feet and varied in diameter depending on the steel tower height and weight. Some of the excavation involved blasting through rock structures.

Power agency buys coal reserve in Emery to fuel plant near Delta -- The Intermountain Power Agency has purchased a 35-million ton coal reserve in Emery County to fuel its 1,500 megawatt electrical generation plant near Delta.

IPA purchased the Mohrland coal field from United States Fuel Co. for $28 million, IPA spokeswoman Ann Garrett said.

The agreement alters a previous contract between IPA and United States Fuel, which called for the purchase of a certain tonnage of coal from the Mohrland mine.

Garrett explained the new agreement benefits both parties by offering United States Fuel an immediate cash payment for its coal, while allowing IPA to determine the amount of coal it uses at the plant and leaving an option open to sell excess coal from the reserve.

The Intermountain Power Project electrical generation plant will use an estimated 4 million tons of Utah coal annually, she said.

IPA has previously signed other agreements to purchase coal from Utah mines operated by Coastal States Energy, Tower Resources and Cyprus Minerals.

The $5.8 billion power plant project is near completion, Garrett said.

Operating tests are being run along IPP's northern transmission lines and and the first commercial power generation is scheduled in or before July. The plant's two, 750-megawatt generators will be in full operation by July 1987.

More than 75 percent of the electricity generated from the plant will be delivered along 590 miles of transmission lines from Delta to southern California.

Six California communities have purchased power shares In the project along with 23 Utah municipalities, five Utah cooperative utilities, Utah Power & Light and a Nevada cooperative.

The project has been praised by local government officials and economists as one of Utah's largest industrial undertakings, employing more than 4,500 workers in 1985.

The Intermountain Power Project in Millard County which sells nearly 75 percent of its generated electricity to California cities — is scrambling to meet stockpile requirements.

"The coal situation in Utah right now is very, very difficult," said Reed Searle, general manager of the Intermountain Power Agency. "Our coal pile surplus is way under what our guidance is. We are eating into that surplus, and thank God we had the surplus or we couldn't have run the plant."

According to a report released this week by the Utah Energy Office, coal production fell in 2003 for the second consecutive year to 23.1 million tons, down from 25.3 million tons a year earlier.

The mine sale price for Utah coal decreased to $16.64 per ton in 2003, compared to $18.47 in 2002. In 2003, total revenues fell below $400 million for the first time in i6 years.

Yet while prices and production levels may be falling, coal distribution to electric utilities is skyrocketing due to Utah's growing demand for power. Roughly 85 percent of Utah's coal in 2003 was delivered to electric utilities at home, across the nation or overseas. Ninety-three percent of all electricity generated in the state can be traced to the burning of coal.

"We own two of our mines (Genwal and West Ridge, both jointly with Andalex), and neither one is producing anywhere near their budgeted production levels," Searle said. "We are not meeting our delivery requirements to others in the state of Utah. We're having trouble getting shipments via the railroad. For the first time in quite a while, we're taking truckloads of coal again."

The falling production levels can be traced to a number of reasons, including lower quality coal, the shutdown of the Skyline Mine in Emery County and dangerous gases that have shut down or delayed production in other mines.

Searle said IPP has historically used Utah coal to generate its electricity. Now the plant is having to import coal from surrounding states at higher prices.

"I won't comment on the price of coal," Searle said. "If you look at 2004 data you will find an entirely differently story. The price is substantially over $20 (per ton)."

Dave Eskelsen, a spokesman for Utah Power parent company PacifiCorp, said he is unaware of any transportation constraints in coal reaching the company's three coal-fired plants.

"We don't take a whole lot of coal in Utah by rail," Eskelsen said. "It's not a big issue with us."

Jon Allred, a spokesman for the Utah Energy Office, said a bottleneck in the railroad system has created constraints across the West.

"Out-of-state users of Utah coal are having increasing difficulty dealing with coal quality," Allred said. "Power plants in California are reporting they are keeping fairly small amounts of coal on hand, that they're barely meeting reserve requirements."

In fact, Union Pacific can't hire enough people to handle an unprecedented increase in demand for service amid a surge in the economy and glut of Asian imports reaching the United States.

That compounds the problems for power plants like IPP, which rely on the railroad.

"We see a very serious coal shortage problem for a couple of years," Searle said. "We are very worried about our ability to get the quality and quantity of coal that is necessary."

Utah Railway does not take the train all the way to the power plant near Lynndyl. The train is turned over to the Union Pacific at Provo. UP takes the train from Provo down the Lynndyl Subdivision to Lynndyl. At Lynndyl is the track to the power plant where the train is unloaded on a balloon track. The empty train then returns to IPP's yard at Springville, where it is inspected. All IPP trains start and end at their Springville yard.

BNSF does not have anything to do with the IPP train. It is a UP and Utah Railway train.

The UP track that this train goes south on (railroad west) lays east of the IPP yard in Springville. Anything going north goes to Salt Lake City.

Train crews change in the UP yard in Provo. The IPP yard is where the trains are stored and checked out. All IPP trains leave the Springville yard to go to the mine load outs. Both Utah crews and UP crews work out of the IPP Springville yard. Also at IPP's Springville yard is car storage, train storage, and a car shop for car repairs. This shop repairs both IPP cars and other company's cars.

IPP does get some coal from Wyoming and Union Pacific runs these trains, but at present I'm not sure were the Wyoming trains are loaded.

Power for the IPP train train is both Utah Railway MK50-3's and UP AC units, both GE and EMD. Utah will use UP engines if their own power is on the east end of their line. If UP is short of power in Provo, then the Utah Railway's motive power will run to the power plant with the train.