January 14, 2014

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Energy Boom

Changing the Game for Utah’s Rural Economies

By Gaylen Webb | Illustration by Mark Jarman

January 14, 2014

Good luck finding a hotel room or renting an apartment in Beaver County these days. The Utah Center for Rural Life at Southern Utah University says a boom in new business operations and construction has the Beaver County economy humming. An unemployment rate of about 10 percent in 2010 has shrunk to 4.5 percent. Jobs are plentiful but housing is scarce.

The cause of all this activity is energy and natural resource development. Several new projects ranging from copper mining to solar farms are creating buzz in rural Utah—a development that bodes well for the state’s future.

Earth, Wind and Sun

Beaver County is benefitting from the reopening of the open pit Copper King Mine, now under new ownership and management, as well as the $121 million construction project to rebuild the Cove Fort-Sulpherdale geothermal plant, which closed in 2003.

In March 2007, Enel Green Power North America (EGP-NA) acquired the non-generating geothermal plant and other geothermal resources from Amp Resources. EGP-NA expects the first phase of the project to be operating commercially by the end of the year. About 250 construction workers have been busy on the project during the past 18 months, and many will continue to work there as the company builds out additional phases. EGP-NA says when finished, the geothermal plant will have an installed capacity of 65 megawatts.

Farther west, First Wind, owner of Utah’s largest operational, utility-scale wind farm, is exploring the feasibility of a solar energy project in Beaver County. The company currently operates 165 wind turbines spread across the desert in Beaver and Millard Counties, which produce power for about 64,000 homes in Southern California.

Like Beaver County, neighboring Millard County has also become a significant energy hub. In September, Provo-based Energy Capital Group, LLC (ECG) unveiled its plans to develop a 300-megawatt solar plant adjacent to the 1,800-megawatt Intermountain Power Plant (IPP) near Delta at a cost of $600 million. The project is expected to create about 200 new construction jobs and enough clean, affordable electricity to power about 80,000 homes.

ECG will spread 800,000 solar panels across 1,754 acres of desert the company is leasing from the Utah School and Institutional Trust Land Administration (SITLA) for the project, which will generate substantial tax revenue for the county and benefit Utah’s K-12 grade school children through lease payments to SITLA.

The location is ideal because the existing infrastructure includes a high voltage direct current (HVDC) transmission line that will allow ECG to send its power directly to customers in California.

“Having the HVDC transmission line through Millard County has proven to be an asset we never expected,” says Millard County Economic Development Director Linda Clark Gillmor. “California’s green energy requirements have created a market-driven demand for renewable energy, which Millard County’s wind, solar and geothermal resources can provide.”

She believes Millard County has the potential to be the premier example of what clean, economical energy production can look like. “We have the best of everything. Our portfolio of traditional clean coal provides the base load, with solar, wind and geothermal added to the mix, and then balanced out with natural gas,” Gillmor explains. “Renewable energy is intermittent. We need natural gas in the mix, otherwise we would only have power when the sun is shining and the wind is blowing.”

The Intermountain Power Plant and its existing HVDC infrastructure are essential to Millard County’s energy boom. “We have all of these resources here,” she says, “but the DC transmission line to California is key to everything.”

Several other solar and wind companies are working in the county, with power purchase agreements in place or in the queue, and another significant geothermal project is in the works—but Gillmor says it is too soon to talk about any of those developments. Nonetheless, energy development has become a critical part of the Millard County economy.

Market Forces

“Across the county we have a feeling of excitement and concern,” says Gillmor. The excitement stems from all of the energy development activity in the county. The concern is over the future of IPP and its clean coal-generated power. “We anticipate somebody will want that power, even if California doesn’t,” she says.

Gillmor is referring to the mandate in California that the state will not import electricity generated from sources that emit carbon dioxide at a higher rate than that of natural gas combined-cycle plants. Los Angeles and five other California municipals currently consume nearly 75 percent of IPP’s electric generation capacity.

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