go forward with preliminary negotiations allowing former Moab resident
Aldine J. Coffman to construct four power turbines on Spanish Valley
water and irrigation lines.
According to a Memorandum of Understanding between
Coffman’s company, International Energy Equities, Inc. (IEEI) and the
water agency, discussions began in March 2004 between Coffman, his
business partner William G. Luke and water agency manager Dale Pierson
concerning projects that could utilize the energy of the water and
irrigation mains under the management of the agency. In July 2004
Coffman toured the various systems of all of the water districts with
an engineer to begin a feasibility study. On August 5, 2004, Coffman
and Luke made a presentation to the board of trustees of the agency,
presenting an “unsolicited proposal” to install four generating units
at the developer’s cost, with the developer sharing the revenue with
the water agency “and its member units.”
Coffman told the agency board during its regular
meeting last Thursday that the Memorandum of Understanding will enable
him to negotiate with Utah Power and Light over a Power Purchaser
Agreement and agreements regarding the technical requirements of
hooking power generators up to the UP&L grid.
“This document says we are in negotiations, which
allows me the authority to negotiate with Utah Power and Light,”
Coffman said.
The water agency sent out a request for proposals
after hearing Coffman’s presentation to see if there was interest from
other power generation companies in a similar project. The irrigation
and culinary lines in Spanish Valley typically have more pressure than
the system can handle at the lower ends of delivery, Pierson explained,
and currently uses pressure release valves to control the buildup of
pressure as the system heads downhill.
“This gives them the ability to go to Utah Power and
Light and come back to us with figures,” Pierson said. “Then we can
negotiate the contract itself. The (Memorandum of Understanding) is not
binding.”
Agency board member Rex Tanner asked for a ballpark
figure on what the water districts could earn by receiving a portion of
the electricity generated and sold by IEEI.
“Just so we know how much trouble this is worth,” Tanner said.
The response from Coffman was tentative because he
has yet to negotiate with the power company, but could be $10,000 a
year, or 10 percent of the generation of electricity.
Pierson said that “one way or another pressure has
to be reduced down line.” On Chapman Lane, he said, the originating 30
pounds per square inch of water becomes 150 PSI.
“That’s too much pressure to manage,” he said. “What
A.J.’s group is proposing is a way to reduce that pressure.”
Spanish Valley Water and Sewer Improvement District
board member Karla VanderZanden said “We’re as a group considering
potential change in the use of water, even a secondary system.” She
asked who was on the committee that has worked with the turbine
developers to this point. They are Tom Stengel, Dan Pyatt and Gary
Wilson.
“Future expansion of a secondary system may even make this more valuable,” Pierson said.
Rangely, Colo., Water District Manager Ann Brady
said their district has had a turbine power generator on the White
River since 1993. Although she said she was familiar with the name,
Coffman, the contract with the district is with a company call PMTI.
Coffman has given the Rangely Water District as a reference to local
water board members, and Brady spoke highly this week of power
generation in general terms.
“There’s a lot of money in hydro if it’s done
right,” Brady said. “It’s a long-term contract so it needs to be worked
out. Not just the energy payments, but the capacity payments. The
capacity contract is where we make money.”
And lots of it: $721,000 in 1998 as a high, and $206,000 in 2002 as a low.
“We’re still in a five-year drought,” she said.
When the water pressure dips below 135 cubic feet
per square inch, the generator is shut down to allow the flow to
rebuild. By comparison, the pressure on the White River is going to be
substantially higher than Spanish Valley flows through the system.
“It’s been a really good little project for us,” she
said. “But you have to have an engineer negotiate the contracts and
there should be two separate contracts for capacity and energy.”
The White River project was presented as a “turnkey
project,” she added, but the water district there sold bonds to build
it. Coffman’s proposal to the water agency is to finance construction
and negotiate a contract for permission to build it.
“Well. if we make a little green power and get a
little revenue, why not,” said board chair Gary Wilson. Wilson, a hay
farmer, chairs two of the three forming boards of the agency and holds
a majority of the irrigation rights in Spanish Valley.
Barb Morra, member of the Spanish Valley Water and
Sewer Improvement District, advised her board that the amount of power
that could be generated on the culinary line wasn’t worth the risk of
building a turbine on the system.
“It should only be on the irrigation lines,” Morra
said. “I don’t think we should do anything to jeapardize the integrity
of the culinary (drinking) water system.”