The Idaho Public Utilities Commission (PUC) has approved a plan by Utah Power and Light Co., partner in a merger with PacifiCorp, to offer its largest customer, Monsanto, reduced rates as well as an option to arrange for the delivery of third-party power when prices fall below state levels. The PUC cautioned, however, that approval of the new service agreement "should in no way be interpreted as a preauthorization of retail wheeling." The SCC concluded that the changes negotiated by the two companies were required by "manufacturing and supply options available to Monsanto and market and regulatory changes within an increasingly more competitive electric industry."
Monsanto contributes over 28 percent of all Idaho revenues. In addition, interruptible rates to Monsanto had increased 21 percent since 1991 and were scheduled to increase another 4 percent on July 1, 1996. Under the new agreement, Monsanto will pay the utility $30 million for early termination of its existing service agreement, and then take 9 megawatts (Mw) of firm service and up to 206 Mw of interruptible service at a monthly minimum charge of $66,000 and 1.85 cents per kilowatt-hour (¢/Kwh) for all energy delivered. The new contract can be renegotiated in 1999 if Monsanto receives a signed offer by a third-party to deliver power at prices equal to or lower than 1.85¢/Kwh. The agreement also requires the utility to negotiate the terms and conditions for delivery of the third-party power if existing laws allow wheeling. Re PacifiCorp, dba Utah Power and Light, Case No. UPL-E-95-4, Order No. 26282, Dec. 21, 1995 (Idaho P.U.C.).
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