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Council approves resolution to proceed with UAMPS capacity purchase and Wheeler agreement for peaking generators; air permit remains key condition
Summary
Council adopted a resolution authorizing a capacity purchase agreement with UAMPS and related balance‑of‑plant arrangements with Wheeler Machinery for a peaking generation project. Staff said the agreement enables UAMPS to seek financing, but the project remains contingent on receiving the required air permit.
Brigham City on Thursday approved a resolution authorizing a capacity purchase agreement with the Utah Associated Municipal Power Systems (UAMPS) and related contracts with Wheeler Machinery Company for an on‑site peaking generation facility, clearing the way for UAMPS to pursue project financing while staff continue to secure regulatory approvals.
Project framework and reason for the agreement
City staff and project consultants told the council the arrangement will let UAMPS finalize financing and Wheeler begin long‑lead procurement at its own risk; Wheeler offered to start engineering and procurement prior to final air‑quality permitting in order to limit cost escalation from inflation and extended lead times. The city’s agreement with UAMPS is structured so the project must still obtain a federal/state air permit; if Brigham City cannot secure the air permit, the city would not be obligated to move forward with the project.
Key figures and schedule
- Projected scale and cost: Staff provided an indicative project cost near $24 million and a preliminary 20‑year financing profile; project proponents estimated a bond payment of roughly $1.8 million annually over 20 years as an illustrative figure for planning. The first phase of construction will accommodate up to 6 generator slots in the facility; the city expects to place three units initially with space and permit allowances for future expansion.
- Output and system impact: Initial installed capacity in phase one is estimated at up to 7.5 megawatts when three units are operating; the shell is sized to accept six units for up to 15 MW. Staff said the peakers are intended to reduce the city’s exposure to volatile day‑ahead market prices and transmission capacity constraints that drove high wholesale costs in recent years.
- Air permit: City staff said the air‑quality permit review is underway with state regulators and that the first stage feedback was positive. They cautioned that final permitting, expected in the coming months, remains the project’s gating item.
Council action and next steps
The council voted to adopt the resolution authorizing Brigham City to enter the capacity purchase agreement with UAMPS and the balance‑of‑plant agreement with Wheeler Machinery. Project staff will continue engineering work, complete geotechnical studies, finalize interconnection and gas‑service details, and then return to council with final financing terms and a bond‑sale package before any sale is completed.
Why it matters: staff said owning or contracting for peaking capacity provides a hedge against extreme wholesale price spikes and transmission risks the city experienced during recent market disruptions; the project would change the city’s electric rate and capital profile once financing and construction are finalized.
