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Vital connections.

Vital Connections

Utah Heats Up

Utah's major utility companies actively promote Utah as a place to do business. Economic growth for the state means more utility connections for them.

Mountain Fuel recently installed natural gas lines to 48 new communities of 90,000 people in central Utah, including Ephraim, Richfield, and Salina and to three communities in southeast Idaho. Mountain Fuel's system now includes more than 9,000 miles of distribution lines and 5,680 miles of service lines. The company is also nearing the end of a 20-year project to replace all low-pressure cast-iron portions of its system with non-corroding plastic pipe. And they've converted the majority of its transportation fleet to, what else: natural gas. Since 1987 the company has invested more than $80 million in the expansion of its system.

The new natural gas service to southern Utah has caught the attention of southern California manufacturing companies, according to John Williams, executive director of the Five County Association of Governments. He says the number of inquiries about the area have risen significantly over the last 12 months. "The Mountain Fuel Supply line--coupled with the strong work ethic and our proximity to southern California markets--has resulted in an increase in inquiries about our area," says Williams. He says he is working with 64 southern California manufacturers, firms expressing interest in either additional information, availability of sites, the cost of doing business, utility rates, availability of natural gas, or actually visiting the region. Williams cites recent Los Angeles Times' articles that state one out of every five southern California companies are looking at moving or expanding out of that state in the next five years. "We're now averaging two serious site visits per month. The first questions they ask are about the availability of natural gas and labor."

"Economic development is paying good dividends for our area," says Williams. "The momentum is going our way."

In 1992 Mountain Fuel plans to distribute natural gas to another 10 communities, including Delta, Beaver, and Fillmore via seven feeder lines that will tap into the new Kern River Pipeline, which begins operating this month. The 900-mile pipeline--36 inches in diameter--carries 700 million cubic feet of gas per day from gas-producing fields in southwestern Wyoming, into Utah near Coalville, and through Utah and Nevada to Kern County in southern California.

The project is a joint venture by Tenneco and The Williams Co., parent company of Salt Lake-based Northwest Pipeline.

"Looking to the future, we see a good supply situation and competitive prices," said Nick Rose, chief executive officer, Questar (Mountain Fuel's parent company). "Mountain Fuel's service area enjoys a significant advantage in natural gas availability because it is located near some of the nation's most abundant supplies." One-third of Mountain Fuel's gas supply comes from its own wells, helping to keep the prices competitive for Utah customers.

"We're always looking for opportunities to extend provisions to benefit Utah and to make our company grow," said Art Yeager, economic development director.

Hello, Hello, Hello

Businesses requiring up-to-the-minute telephone technology will want to hook up with Utah in 1992. As reported in UB's May 1991 issue, Utah is home to one of AT&T's 4E switching centers, giving Utah businesses technology and convenience rivaling any infrastructure found in any of the world's major metropolitan centers.

AT&T continues to invest in Utah. "That's what it takes. It's not a matter of doing it once and then resting on your laurels," says Bob Hood, AT&T's marketing manager.

"Any modern communication that is required is available to businesses in Utah," says Hood. Utah's advanced fiber-optics infrastructure can be compared to that in downtown Manhattan or Los Angeles, he remarks. "Salt Lake City is at least on par if not better than most major cities; it is often first in the deployment of new features."

Some rural areas of Utah, however, lag behind the state's metropolitan corridor when it comes to telecommunications infrastructure. Hood says he's heard businesspeople and economic development officials from around the state express concern--they understand the benefits of a fiber-optics system and want to participate. "This is a very real and important issue that Utah must resolve if we are to compete in a global marketplace."

"Telecommunications will be the real backbone of Utah's infrastructure in the next decade," predicts Bobbie Coray, director, Cache Economic Development. Logan, like most metropolitan areas of Utah, have state-of-the-art communications abilities. She says most of the business locations that have happened in Logan, occurred because of that technology.

Many areas in rural Utah, such as the communities surrounding Logan, however, do not have telephone systems to accommodate some modern telephone conveniences, such as call waiting, call forwarding, or voice messaging. Sometimes, in fact, just placing a call proves challenging.

Wayne Cantwell has owned Cantwell Brothers Lumber Co. in Smithfield, Utah, since 1949. Also an outlet of Ace Hardware, his store orders products from vendors in Chicago. Cantwell tells horror stories about the telephone system in and around Smithfield, frustrations also experienced by other business owners in 41 communities throughout the state. The phone system, he says, is antiquated: "The background noise is enough to hurt a caller's ears; it snaps and clicks, then you get knocked off the line. One day I had to call my supplier five times before I got through," he explains.

Cantwell and other business owners have formed the Smithfield Business Association and have US West to replace the outdated system in the region. "In 1982 US West told us we'd have the new digital equipment in place in two years." Frustrated and losing customers, business owners met with US West to communicate their needs.

"The very type of businesses that could do well in these outlying areas--such as reservations centers--can't locate there because of the outdated technologies," Coray insists. "No business in its right mind would locate in the areas around Logan with the existing analog telecommunications system."

Coray believes Utah should have a standard telecommunications system throughout the state. "If Utah is to be truly economically viable, we should demand that service."

Utah does, however, have 700,000 digital lines, connecting 92 percent of the state with modern fiber optics, according to Leanne Shay, community affairs manager, US West. "Since the new technology has come into being, people in all areas of the state expect to have the same type of service as do the major metropolitan areas," Shay comments. "But when you have 100 offices, it takes time to convert the system."

The dilemma, Shay explains, is in "finding the revenues to respond to the data age." Upgrading the 41 remaining centers would cost an estimated $1 million each. She confirms that Smithfield and Hyrum are scheduled to be converted in June, 1993.

Traditionally, US West has upgraded its rural centers when they can no longer handle the capacity of the area. In March 1990, the state legislature passed a law enabling the Public Service Commission to consider an alternate form of regulation. In the original proposal, US West requested an authorized rate of return of 14 percent versus the former 11.8 percent. If actual earnings turned out to be less than the 14 percent, then the phone company could apply for a rate increase. Otherwise, it would file for a decrease. With the new legislation, US West proposed to enhance its service to Utah, freeze rates for four or five years, and invest $91 million in upgrading its rural offices "at no cost to the consumers of Utah," Shay explains.

In return for its investment in Utah, the utility wanted an authorized rate of return of 14 percent vs. 11.8, one of lowest in the U.S. "Instead of authorizing the 14 percent rate of return, the PSC authorized it at 12.2 percent. US West, however, is still required to upgrade the remaining centers. According to Shay, the issue is before the Utah Supreme Court.

IPP: Lighting Up the West

Sprawling just outside Delta, Utah, is one of the world's largest and most modern coal-fired power plants. Intermountain Power Project (IPP) employs 615 people in producing electricity for residents and businesses in 36 municipalities and rural electric co-ops from Logan to Southern California.

Its computer-driven system makes it one of the most modern power plants in the world. With a sophisticated back-up system in place, the plant rarely goes off line. Power from the IPP can be relied upon more than 90 percent of the time versus the industry's average of 70 to 80 percent, says an IPP spokesperson.

IPP has an elaborate visitor information center, equipped with video programs and models of the plant.

PHOTO : Intermountain Power Project, Delta, Utah.

PHOTO : Welders work on the Kern River Pipeline in the foothills east of Bountiful.

PHOTO : Built at a cost of $947 million, the new Kern River Pipeline is the largest interstate pipeline built in the U.S. in the last decade.
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Copyright 1992 Gale, Cengage Learning. All rights reserved.

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Title Annotation:economic growth for Utah brings more utility connections
Publication:Utah Business
Date:Feb 1, 1992
Previous Article:You can get there from here.
Next Article:Utah's business climate: a pro-business stance?

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