SALT LAKE CITY — An audit prepared by the Utah State Legislature's Auditor-General could lead to increased state oversight of the massive Intermountain Power Project near Delta.
The audit, presented to legislative leadership on Tuesday, raises questions about how the Intermountain Power Agency is structured with its biggest customer being California-based entities, which also have a majority share on its board. Auditors pointed out that nearly 98% of IPP's power generated goes to California; the remaining 2% go to Utah municipalities. Some lawmakers wanted to know to what extent can another state control something within Utah's borders?
"If 98% of the power is going out of state, it's not a benefit to the citizens of the state," said House Majority Leader Mike Schultz, R-Hooper.
The plant was constructed initially with an agreement to use Utah-mined coal in its operations. Coal use has declined dramatically in recent years, the audit noted. IPP is pivoting to use alternative forms of energy like natural gas and hydrogen, retiring its coal units in 2025. California's legislature has set greenhouse gas emission standards for power entities it does business with. With that state being such a big customer, it posed a risk for the plant's very existence, lawmakers were told.
House Minority Leader Angela Romero, D-Salt Lake City, said lawmakers should not be so critical of California policies when Utah has yet to come up with its own comprehensive energy plan.
"We're faulting California for having a plan. Maybe we need to look at ourselves as Utah," she said.
Auditors also examined IPA's tax agreements with the state and Millard County but noted residents in some communities believe the plant is still beneficial to them. It was accusations that Intermountain Power Agency failed or delayed providing documents to legislative auditors that appeared to irritate legislative leaders. Auditors said they could not get recordings or minutes from board meetings. IPA insisted it was legally privileged information.
"We're supposed to be taking care of the best interests of the public and taxpayers. There’s been tremendous benefit to IP over the years because of benefits the state has given to the entity but yet we can’t even get line of sight to what’s happening inside the organization," said House Speaker Brad Wilson, R-Kaysville.
Intermountain Power Agency General Manager Cameron Cowan offered to provide more information to lawmakers, telling the committee they were committed to transparency. He warned that upsetting their governance structure could interfere with existing contracts.
"At this point, changing the governance structure entirely or in some forms we feel could interfere with those contracts and bond-holder rights," he said.
But lawmakers hinted legislation may be coming to tweak IPA's governance structure or at least provide more oversight. Any bill would not appear until the 2024 legislative session in January.
Read the audit here:
