3 support electric franchise

Continental Divide workers Abel Alvarez, left, Abe Gonzales and Raul Sanchez, background, run an underground electrical service cable to a new home in Grants Tuesday afternoon. The Grants City Council held a study session Wednesday night to discuss a measure to grant a 15-year franchise to Continental Divide giving right-of-way privileges to provide electric service to customers. [Photo by John A. Bowersmith/Independent]

By Jim Maniaci
Cibola County Bureau

GRANTS — The mayor and two Grants City Council members a majority of the five-member municipal governing body voiced support Wednesday night for granting a 15-year franchise to Continental Divide Electric Cooperative for a 3.5 percent fee.

But the one councilor who has vehemently opposed the cooperative's board continued opposition during Wednesday night's workshop. The fifth councilor was absent, but will get to vote at Tuesday's 6 p.m. action meeting in the City Hall Council Chambers.

The council's action Tuesday would be to approve publication of the ordinance granting the franchise, with the council officially adopting the ordinance on Nov. 28.

In December 2003, the previous 15-year franchise at a 2 percent fee expired. The electric cooperative has continued to pay the city the 2 percent, which General Manager Dick Shirley said comes to about $96,000 a year. At the higher rate he said the city would receive about $175,000 a year.

Mayor Joe Murrietta said it is costing the city revenue the longer the decision is delayed. Continental presented its initial proposal in late February with several revisions to the proposal since then having been discussed by the city with Shirley and his staff.

While Mayor Pro Tem Modey Hicks and Councilor Walter Jaramillo agreed with the mayor that it was time the council approved the franchise, they questioned why the previous council's action to conduct an updated study was not implemented during the administration of Mayor Ron Ortiz.

City Manager Bob Horacek meekly said he was not given directions to present a contract for the consultant to do the study. The city would have paid $8,000 and Cibola County would have paid $8,000 to the consultant, who was involved in one of the 1987 studies.

County Manager David Ulibarri was on the council in 1987 and 1988 when two studies were done. They showing the city would profit using a gas-fired plant and that a coal-fired plant would be way too costly. Those costs have now flip-flopped. The cost of a proposed 1,500 megawatt coal-fired power plant using about 5,000 acre-feet of water a year on the Navajo Reservation (Desert Rock) is now well over $1 billion. The 1987 report projected a cost of about $16 million for the city to build a duplicate system to CDEC's inside the city limits.

Shirley said CDEC's analysis showed the city would have lost its projected $500,000 a year profit after only four years and would not have been able to make the debt payments, as outlined in the old reports.

Now the county manager's brother is on the council. But Councilor Ulibarri denied to Shirley he ever told him he wants the city to take over the service he just wants some cost reductions. Shirley agreed Ulibarri had never personally told him he wanted the city to grab Continental's main market.

The cooperative's supplier, Tri-State Generation and Transmission Association, has all of its six coal-fired plants' capacities committed to serving its members and therefore would not be able to sell power to a city-owned utility. Tri-State also has an ambitious 15-year construction plan to more than double its capacity by adding some 2,100 megawatts.

During their acrimonious exchanges, Ulibarri said the co-op charged the city $400 to move some CDEC poles at the airport. Shirley repeated, once again, Continental only charges the city the cost of the materials and labor, without any profit margin being added.

Shirley once again said that the cooperative will not discriminate against its members by giving the city extra breaks, because everyone else would have to make up the difference.

Ulibarri also maintained the city of Gallup, which took over electric service in CDEC's largest community, makes plenty of money providing electricity. He often was very aggressive, raising his voice loudly, when Shirley tried to answer that the CDEC rep often couldn't finish his attempted explanations.

To contact reporter Jim Maniaci in Grants, telephone 285-6184 or (505) 870-7775 (cell).