Sen. Owens says he floated idea of state using eminent domain on IPP assets
The two state senators who represent different sides of Millard County each confirmed last week efforts underway to potentially save Intermountain Power Project’s two coal-fired units from ending up in a landfill after 2025.
Sen. Evan Vickers, the Republican representing Senate District 28, joined Sen. Derrin Owens, the Republican representing District 27, last week at a work session of the Millard School District board.
The two introduced themselves and discussed a variety of issues pending during the upcoming 2023 legislative session, including the governor’s proposed budget, changes in education spending and more.
During a question and answer period, board members broached the subject of IPP and whether there would be any new legislation targeting the power provider, which is transitioning today into a high-tech natural gas and hydrogen burning facility. Owens led efforts earlier this year and during a special session in 2021 to pass legislation stripping the Intermountain Power Agency of an assortment of tax breaks and other statutory benefits it enjoyed as a political subdivision of the state.
IPA’s board of directors recently rejected a bid by Orem company Fibernet and a business partner named Enchant Energy to purchase all of IPP and other IPA-owned assets.
Fibernet hoped to purchase the agency’s two coal units to supply power to massive data centers planned for the IPP site, its CEO reported in a recent press release.
Rumors about the state weighing in on such a plan to keep the coal units open past 2025 have persisted among local officials for some time, though no public confirmation was available until IPA’s board passed a resolution rejecting Fibernet’s offer on Nov. 22.
Owens said discussions among IPA officials and state legislators have taken place at various times regarding extending the life of the coal units.
“That’s been in the works. That’s kind of in play right now. I’d love to see those coal units that billions of dollars have been put into that they stay up,” he said.
He said a lot of high-tech jobs could be created in Millard County supporting such a venture as the one presented by Fibernet. But the senator also acknowledged that federal environmental regulations and costs associated with avoiding them prevented IPA from doing much right now.
“IPP can’t really consider it because of EPA (Environmental Protection Agency) restrictions. So whether the state gets involved to see if it can bridge that gap with EPA… there’s anxiety out there,” he said.
Owens added that one idea is for the state to use eminent domain—taking straight possession of the units from IPA—is among the ideas floated by legislators, himself included during a meeting attended by Senate President J. Stuart Adams.
“One of the things in play, within that meeting, they (IPA officials) were saying with the EPA we can’t do anything. And so I said maybe the state could exercise eminent domain and help take that monkey off your back. That’s turned into that’s what you are going to do,” Owens told school board members.
The senator said it was merely a suggestion toward a possible solution, nothing concrete as yet.
Vickers said there would still be about $200 million of expenses related to keeping the coal units open, that IPA was able to forego by agreeing to close the units by 2025.
“So if anybody picks it up, whether it be Utah or a new buyer, somebody’s got to pay $200 million bucks, or more, to put the additional protections for environmental quality in place,” he said, confirming an argument made by an IPA spokesperson when news of Fibernet’s offer first broke.
“Derrin is right. Speculation becomes fact when there’s not a lot of reality to it. There’s a lot of discussions going on,” Vickers said.
He added that he discussed a plan to keep the coal units open with the governor’s energy director earlier this year and found the $200 million in costs were “the real deal.”
“It is a real expense that would have to be covered,” Vickers said.
The senator then went on to describe the potential for large businesses to take part in the effort to produce and store hydrogen adjacent to IPP, regardless of whether it’s feasible to keep the coal units open.
“There’s some big companies looking at putting significant money, $10 billion, $10 to $15 billion worth of investment along with that,” he said.
Owens added that protecting the area’s agriculture water remained a high priority among legislators. He also said it might seem there is contention between the state and IPA over such issues, but “it really isn’t.”
Vickers spent four years as Utah Senate Majority Leader and was recently reelected to that job again ahead of the new legislative session.
He represents the western half of Millard County starting near Delta, while Owens represents the east half of the county.
