For the first time in two years, he feels saving he plant might really be an option, he said. Councilor Steve Weston said he had learned water rights are connected to the plant, and it is important to protect them.
“The water is gold,” he said.
Councilor Troy Houston said he wanted to clarify that the water rights issue had not been explained to the council in the past. He said this was the first time he had seen momentum in a positive direction.
City Manager Shayne Scott said he had spoken with the Federal Energy Regulatory Commission that morning and they had said whatever the city decides is fine, so the council is not locked into the decision from last February to decommission or sell the plant.
The decommissioning of the plant would likely include removal of the penstock, a pipe that delivers water from the mouth of the canyon to the hydro plant. Councilor Alan Adams, who is also a farmer in the Parowan Valley, said there are probably 25 to 30 shareholders who get their water from that penstock. The city owns about 25 percent of the irrigation company shares.
Removing the power plant and penstock is not a good option.
“It would be totally devastating to the farmers,” Adams said.
He said he is excited about the prospect of having the city and farmers work together to save the plant, and thinks maybe they could divide it up into a “per share” cost.
“I think it has to be a cooperative effort or it will never happen,” Adams said.
There will be another water board meeting on Jan. 31 where further discussion will take place.
The council also voted last Thursday to do an interest rate modification on current electric bonds with Wells Fargo. The bonds were refinanced with Wells Fargo last June, but as interest rates have dropped even further, the city was looking at refinancing again, and possibly going with SunTrust Bank.
They had been approached by Johnathan Ward of Zions Bank, and he was able to find them a good deal through SunTrust. However, when Wells Fargo found out the city was looking at changing bondholders, they offered an even lower interest rate that will ultimately save the city just more than $300,000 on its electric bonds.
Ward said in addition to the rates, he was concerned with some of the covenants in the contract with Wells Fargo.
“Really we’re here to try to find the best alternative for the city,” he said.
Landes agreed that he was somewhat uncomfortable with the covenants in the Wells Fargo contract, but the council voted to go with the rate modification at Wells Fargo, which had a lower interest rate than the SunTrust proposal and was quicker and less expensive than a full refinance.