Ephraim gets serious about building its own power plant

EPHRAIM—Based on a presentation by the Power Department director at the last city council meeting, Ephraim is getting serious about developing its own natural-gas power generating plant, a project that could cost $7.5 million up front but save the city much more than that down the road.

Ephraim owns hydroelectric plants in Ephraim Canyon that generate some of its power. It participates in power projects sponsored by the Utah Association of Municipal Power Systems (UAMPS), which entitles it to a significant amount of power, generally at below-market rates.

Creating a backup power source

But if those sources aren’t sufficient, the city has to purchase power on the wholesale market. A couple of years ago, wholesale prices spiked so high that the Power Department went more than $500,000 in debt. That forced the city council to raise power rates twice in one year.

The idea behind the generating plant is to create a backup source. When power demand rises, such as during cold winter months when people are using their furnaces and summer months when they’re turning on their air conditioners, the city, rather than buying power, could simply run its own generators.

In one year, demand for power in Ephraim increased 10 percent, which was the biggest increase among about 50 cities in UAMPS, Mayor John Scott noted at the April 2 council meeting.

Economics of natural gas power

In November 2024, a representative from Wheeler Machinery in Salt Lake City, which markets natural-gas power generating units, told the city council the average cost of power purchased from Rocky Mountain Power was $75 per kilowatt.

At typical natural-gas prices, the representative said, the average cost of generating the same amount of power at a city-owned generating plant would be $40.

Plans call for remodeling “Powerhouse,” the Power Department headquarters southwest of the Ephraim Public Library, into the generating plant.

The Power Department would move to a “public works campus” being developed at 250 S. 400 West. In fact, a bid opening for an estimated $6.5 million Public Works Building and related facilities is scheduled tonight (Thursday).

At the recent city council meeting, Cory Daniels, power department director, ticked off some of the tasks his department has completed to get the generating-plant project moving.

“We already have the site location,” he noted. “We have water and sewer already.”

The department has filed a Notice-of-Intent with the Utah Division of Air Quality to build a smokestack on what is now the Power Department site. “We’re pretty much halfway done with our air permit (a permit that allows a facility to emit pollutants), which is really good,” Daniels said.

The department is planning to put up a 30-foot smokestack, “which isn’t very significant compared to other places,” he said. The stack would have “scrubbers” to remove noxious fumes. “It would hardly emit any noxious fumes at all.”

Daniels said he had talked with Enbridge Gas about extending a natural gas line on 400 West to the Powerhouse at about 50 West. The cost of the new line, including a large meter to measure the amount of gas used, would be about $65,000.

The service fee for such a meter would be about $2,400 per year. “We would have to pay a transmission fee as well,” Daniels said.

Another cost would be moving electrical equipment from the Powerhouse to a substation, located on the Powerhouse grounds. A Salt Lake City power engineering company estimated that cost at $51,000.

At the presentation last year by Wheeler Machinery, a company representative said a power generating unit would cost $5,000. The city has talked about purchasing two generators.

Daniels said how the city would finance the generators is up in the air. It is possible that UAMPS could finance them. That would obligate the city to extra UAMPS requirements, and the power association would own the units, even though Ephraim would maintain and operate them. The other option would be private financing of some kind.

The biggest cost, Daniels said, would be remodeling the Powerhouse building to hold two generating units, plus provide some office space. That would cost an estimated $7.4 million.

However, he estimated such a facility “could pay for itself in 12 years” by enabling the city to meet growing power demand without purchasing high-priced power on the wholesale market.