Overton Power District in dispute with supplier

Friday, Dec. 7, 2001 | 9:29 a.m.

Idacorp Energy L.P., a subsidiary of Idacorp Inc., sued Overton Power District No. 5, a small electricity district 65 miles northeast of Las Vegas, alleging it defaulted on a $2.5 million power payment.

Boise, Idaho-based Idacorp sued Overton on Nov. 30 in Idaho state court in Boise, alleging it isn't entitled to renegotiate or terminate a contract to buy 210,000 megawatt-hours of energy at $88.50 a megawatt-hour.

Idacorp, which said Overton agreed to raise its rates to its customers to the extent necessary to make its payment obligations to Idacorp, said "Overton's breach of contract is completely without basis."

Overton said it buys 350,000 megawatt-hours a year for its 9,000 residential, industrial and casino customers in eastern Clark County. Overton buys the remaining 140,000 megawatt hours from the Colorado River Commission.

Kent Bloomfield, Overton's chief executive, said: "There are ongoing attempts to renegotiate the contract because energy prices have dropped. We entered into the contract in April at $88.50 a megawatt-hour because the market at that point in time was much higher. We thought it was a good deal then. But now natural gas prices have dropped and therefore prices to produce electricity should also be lower."

Bloomfield said the market range is now around $40 a megawatt-hour.

"We stopped paying Idacorp in October because we believe we've been overpaying them since June or July when energy prices began dropping. Because of those overpayments, we aren't in default," he said.