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City considers aligning commercial demand charges with UMPA, eyes data centers to bolster load
Summary
Staff said Nephi is charging commercial customers less than the Utah Municipal Power Agency (UMPA) and suggested aligning demand charges with UMPA; the city noted lost large loads and said it is seeking smaller data centers to improve load factor without major community impacts.
City Administrator Seth Atkinson told the council that Nephi City’s commercial electric demand charges are currently lower than the Utah Municipal Power Agency (UMPA) charges and suggested aligning the city’s rates with UMPA. He explained that demand charges apply when the city reaches peak usage and that UMPA must procure additional power to meet those peaks; the city’s practice is to charge individual commercial and industrial customers for their own demand once peak usage is reached.
Atkinson said the problem arose after the city lost some large commercial customers that had contributed significantly to the load factor. As a mitigation strategy, staff said they are looking for smaller data centers to improve the load profile without imposing a major impact on the community. Councilors discussed the fiscal implications and the need to balance economic development with local impacts; no rate change vote took place at the work session.
