Natural gas power plant nears completion, will help Ephraim meet rising demands, cut costs

EPHRAIM—Ephraim City is about to step into the circle of medium to large public power operations in Utah that have their own natural gas-fired power plants.

 Within a month or two, the city expects to complete an $8 million project to repurpose its 50-plus-year-old Power Department Building, colloquially referred to as the “powerhouse,” as a power plant.

The key feature of the plant is a 6-ton generator built by Caterpillar Inc., the international heavy equipment manufacturer, capable of meeting about 20 percent of the city’s peak power demand. Better still, there’s space in the building for a second generator.

The project is the culmination of imagination, deliberation, planning, administration and high-tech construction. Cory Daniels, Power Department director, says the plant is the biggest project of his career.

“Once we get this power plant built, that’ll be a big thing I did. I feel like it’s going to help the residents (of Ephraim) for the next century. It’ll make life better for my kids and hopefully my grandkids. That’s my goal.”
Cory Daniels, Ephraim Power Department director

Why such a facility? Two reasons, Daniels says. First, demand for power in Ephraim has been growing at 8 percent per year compared to population growth of 2-3 percent. Ephraim ranks near the top of the 37 members of the Utah Associated Municipal Power Systems (UAMPS), an association of public power operations, in increased demand for power.

The second reason is to save money. There are times every year when Ephraim can’t get enough power from its own hydros and from UAMPS-affiliated plants to meet demand. It has to turn to the “grid,” the national flow of available power. Last year, power from the grid cost as much $100 per megawatt. The estimated cost of power from the new plant is $45-$55 per megawatt.

“We’re not going to run (the plant) 24-7,” Daniels says. “It’s probably going to run 6-8 hours per day in the summer” (when air conditioning pushes up power demand).

While the plant won’t generate enough power to run the whole city during a power outage, the city is hoping to implement what Daniels calls a “black start.”

If there is an interruption in power delivered over Rocky Mountain Power transmission lines, the city will be able to keep the power on at selected sites, such as a hospital, the city hall, the fire station and schools, Daniels said. “That was really what the mayor (former Mayor John Scott) wanted,” Daniels says.

The city started thinking about such a plant in 2022 and 2023, when a coal mine fire and breakdowns at the Hunter Power Plant in Emery County cut off power from one of the city’s biggest suppliers. At the same time, wholesale power prices soared.

The city’s power fund went more than $1 million in the red. The city increased power rates two times to stop the losses.

In midyear 2024, the city hired Utility Financial Solutions, a national consulting firm, to do a study of Power Department finances. The city hadn’t decided yet to build its own plant. But the consultants factored the cost of the plant into its power rate projections.

“Our rate structure that we have in place right now was implemented to help pay for the power plant when the time was right,” Daniels says.

A few months later, Bryan Kimball, director of community development and city engineer, recommended calling in a specialized firm to make a 3-D model of the Power Department Building. The “scan” would measure interior and exterior walls, windows, doors, stairs, railings and the roof, among other features.

Some city council members were squeamish about the $20,000 cost, but Kimball told them the scan would save money and hassle in the long run.

“This guy came in and walked around with this thing on his head,” Daniels says. The biggest question was whether two of the Caterpillar (CAT) generators, or just one, would fit in the building. The answer was two generators.

The scan also identified where more than 10,000 feet (just under 2 miles) of conduit (pipes or cables containing electric wire) should be placed under the floor and in the walls to operate everything in the plant, including a second generator some day.

A few months later, the city invited Wheeler Machinery of Salt Lake City, the largest Caterpillar dealer in Utah and also a general contractor, to make a presentation to the council on CAT generators. The company has installed the generators for Snowbird ski resort, Provo and Springville, to name a few customers.

Shane Minor, a Wheeler representative, told the council that with such a unit, “you have a local asset…that you have control over. You can actually walk up to it and put your hands on (it). You own your power. You’re not necessarily renting your power.

In March 2024, with city council approval still pending, Daniels dove into paperwork required to get the power plant off the ground. The paperwork took almost full time for two months.

“Obviously, we had to go out to bonding with it,” Daniels says. “We went to UAMPS, went through their bonding counsel.” One benefit of membership, he says, is that the association will help a member out when that city wants to install new power infrastructure.

“With a natural gas-fired generator, “you have a local asset…that you have control over. You can actually walk up to it and put your hands on (it). You own your power. You’re not necessarily renting your power.”
Shane Minor of Wheeler Machinery, the company installing the Caterpillar generator

The association issues the bond and adds the cost of bond payments to the member’s monthly power-purchase bill. For Ephraim, bonding through UAMPS cut the interest rate about 1.5 percent below what the city could get on its own. 

Daniels also had to work out terms of a contract with Wheeler. “There was a lot of paperwork getting the payments (to Wheeler) structured,” he says. “You need to pay a certain percentage of their construction costs at a certain time.”

The paperwork included costing out items the city needed to take care of itself, including the natural gas line coming into the plant, new windows throughout the building, a fence, new paint and rain gutters.

In June 2025, Daniels presented the project, including terms of the proposed bond, to the city council. The council approved it. The plans and bond had to go to the UAMPS board, which also approved it.

The city ended up with a bond for $8 million, payable over a maximum of 30 years. But Daniels says the power plant could be paid off in as few as 12 years. “If we save money on the market price (of power) maybe we can put that (savings) toward the bond.”

The city, which had replenished its reserves from the $1 million deficit years earlier, loaned $2 million to the project to get it going while waiting for the bond to be issued.

The next step was gutting the building. That took two very full weeks, Daniels says. A lot of equipment, plus Daniels’ office, occupied the main floor. And there were a lot of old oil tanks, piping and other junk in the basement.

With the building cleared, crews contracted by Wheeler Machinery arrived and started jack hammering out the concrete floor. After the broken concrete was removed, workers smoothed out and compacted the dirt underneath and put down road base.

It turns out a natural gas-fired power plant needs a lot of electricity. The next step was developing “raceways,” small tunnels 1-6 inches wide, through the road base. Extensive conduit carrying electric wire was run through the tunnels to various electrical parts in the generator.

Conduit was also run along the floor and walls for plugs, lights, heating and, most important, automated equipment to control almost everything in the building. A new concrete floor was poured and fire-resistant paneling installed over the floor and walls.

“The building’s going to be totally automated,” Daniels says. “It’s going to have a weather station on the roof. The interior’s going to be climate controlled. It’s going to have a humidity sensor…These generators can only run at a certain temperature. The temperature needs to stay at 72 degrees…When all is said and done, it’ll be like a brand new building. I’m excited about that.”

On Nov. 24, the generator arrived. It took two cranes to lift it off a semi truck trailer. The cranes set it on the ground, then lifted it onto platforms with wheels to roll it into the building. “It was really neat to watch.,” Daniels says.

As of Feb. 15, a few more things needed to be completed. A new hallway containing three offices was being finished along one side of the building. Workers have tapped into a Enbridge Gas line on a street north of the building. But a gas pipe still needs to be run from there into the generator.

Also pending is one of the bigger challenges in the project—approval and construction of a 31-foot-high exhaust pipe for fumes created as natural gas is burned.

“We had to go through an air permit (process) with the Utah Division of Air Quality,” Daniels says. “We had a third-party help us do that.”

The state said the plant didn’t need a catalytic reduction system, also known as a “scrubber.” Rather the city needed a less complicated “oxycat” (oxygen catalyst) machine, which neutralizes greenhouse gasses and trace amounts of other harmful gasses.

The oxycat, which has a big square box at the bottom and a big tube surrounding the exhaust pipe, has been installed behind the building. 

One of the final steps, still to be completed, is negotiating a natural gas purchase agreement. While Enbridge Gas will transmit gas to the plant, it won’t supply the gas itself.

Like many large natural gas users, including the Norbest turkey plant, Ephraim expects to purchase natural gas from a wholesale provider. Such companies agree to provide a given volume of gas at a set price for a given period, such as 6 months to a year. Wholesale prices are nearly always lower than retail utility prices.

The new plant is expected to make a big difference in the availability and cost of electricity in Ephraim.

Daniels gives a hypothetical example: Suppose the city is consuming 10 megawatts for six hours per day during peak summer and fall months. But it can only get 6 megawatts from its hydros and from UAMPS plants at a typical price of $65 to $68 per megawatt. It is faced with buying 4 megawatts from the grid at approximately $100 per megawatt per hour for each of the six hours. That translates to $2,400 per day or as much as $72,000 per month.

If, instead, the city generates 2 megawatts from its gas-fired plant at $47 per megawatt, or $1,128 for six hours per day, it saves $1,272 per day. Over a month, those savings come to more than $38,160 per month.

And given the same scenario, once the second generator is in, the city wouldn’t have to buy power from the grid at all. It could generate the 4 megawatts at less that it pays now for power from its established sources. At 4 megawatts per hour, the savings for 6 hours of use, compared to purchasing power from the grid be $2,544 per day or $76,320 per month.

Daniels, who worked for Manti City Power for four years before joining the Ephraim Power Department says, “I’ve got 30 years in…Once we get this power plant built, that’ll be a big thing I did. I feel like it’s going to help the residents (of Ephraim) for the next century. It’ll make life better for my kids and hopefully my grandkids. That’s my goal.”