Texas firm pays $63 mil. for stake in Vegas plants

Tuesday, Sept. 21, 1999 | 10:54 a.m.

El Paso Energy Corp. of Houston, one of the largest U.S. operators of natural-gas pipelines, agreed Monday to buy Bonneville Pacific Corp. for about $63 million in cash to enter Las Vegas's rapidly growing electricity market.

Salt Lake City-based Bonneville owns a 50 percent stake in an 85-megawatt power plant near Las Vegas that can produce enough electricity to light 85,000 homes.

The natural gas fired plant, called Nevada Cogeneration Associates No. 1 (Garnet Valley), sells power to Nevada Power Co. under a long-term contract. El Paso also is buying Bonneville's Bonneville Pacific Services, which provides operations and maintenance services to the Garnet Valley and Black Mountain cogeneration plants in the Las Vegas area.

Houston-based El Paso, with sales of $5.8 billion last year, owns 26,600 miles of U.S. interstate gas pipelines and stakes in 38 power plants worldwide. It also trades power and gas.

The company, with $10 billion in assets, issued a statement saying: "The Bonneville Pacific acquisition represents our first entry into the Nevada power market, one of the fastest-growing regions in the country. We anticipate further expanding our presence in Western United States power generation projects in the near future."

The sale of Bonneville Pacific marks the end of a tangled bankruptcy and criminal case that generated headlines for years this decade in Salt Lake City. The company was formed in the 1980s to capitalize on tax credits for alternative-energy projects. Its founders included Deedee Corradini, who later became mayor of Salt Lake City.

When Bonneville Pacific filed for bankruptcy in December 1991, investigators discovered executives had overstated the company's financial condition and used illegal securities transactions to pay for energy deals, the Salt Lake Tribune recounted in a story today.

Coradini and her then-husband, attorney Yan Ross, eventually agreed to pay $800,000 to the company's bankruptcy trustee as part of the money Bonneville owed creditors.

Bonneville Pacific's top officers and principals paid fines and served prison terms for fraud and income tax violations tied to Bonneville Pacific.

The Tribune reported the bankruptcy trustee brought more than $150 million back into Bonneville Pacific from settlements in lawsuits against bankers and accountants he alleged were involved in the company's failure.