MINUTES OF THE
LEGISLATIVE AUDIT SUBCOMMITTEE
Tuesday, October 10, 2023 • 8:00 a.m. • 445 State Capitol


Members Present:
President J. Stuart Adams, Co-chair
Speaker Brad R. Wilson, Co-chair
Sen. Evan J. Vickers
Rep. Angela Romero
Rep. Mike Schultz
Members Absent:
Sen. Luz Escamilla

Staff Present:
Kade R. Minchey, Auditor General
Debbie Clawson, Executive Assistant

Note: A copy of related materials and an audio recording of the meeting can be found at www.le.utah.gov.
1.Committee Business
President Adams called the meeting to order.
2.Audit Report Presentations
Mr. Brian Dean, Deputy Auditor General, introduced A Performance Audit of the Intermountain Power Agency (Report #2023-13).
A Performance Audit of the Intermountain Power Agency (Report #2023-13)
Mr. Matthias Boone, Senior Audit Supervisor, presented the findings of the audit.
Mr. Boone responded to a question from President Adams regarding the benefit to Utah of having a generation plant in our state when a majority of the energy generation actually goes to another state: California.
Mr. Dean responded to a question from Representative Romero asking why we are faulting California for having a plan, and why Utah does not an overall energy plan.
Mr. Boone and Mr. Dean resumed the presentation after a comment from President Adams regarding governance.
Mr. Boone and Mr. Dean responded to a question from Representative Romero about whether the municipalities that use IPA as their source of power were included in the audit.
Mr. Boone resumed presenting the findings of the audit.
Mr. Boone clarified for Representative Schultz that IPA is a political subdivision.
Mr. Boone responded to a question from Representative Schultz about whether this was a similar situation to what occurred with UTA where the board was basically rubber stamping what the administration gave them.
Mr. Boone responded to a question from President Adams asking whether it was normal for an entity not to allow access to closed door meetings or minutes.
Mr. Boone responded to a question from Representative Schultz about whether the agency followed the Open Public Meetings Act.
Representative Schultz commented on the difference with the Inland Port Audit where the auditors were present at all closed meetings
Mr. Boone responded to a question from Representative Schultz for more clarity in understanding the tax exempt municipal bonds and how they were put in place. Mr. Boone also responded to additional questions along these lines.
Mr. Cameron Cowan, General Manager, responded to a question from Representative Schultz about whether IPA is paying a full tax assessment value under the current structure.
Mr. Cowan responded to a clarifying question from Representative Romero regarding whether there are things other than IPA that are impacting Millard County's taxes.
Mr. Boone responded to a question from Representative Romero about whether IPA had received the $17 million credit in impact fees.
President Adams commented at length on some of his concerns, including: having a power generation plant in Utah where 98% of the power goes elsewhere; the loss of jobs at IPA; no coal production anymore; water right issues; concerns over the lack of governance control; and that auditors were not allowed into their closed meetings.
Senator Vickers commented on his concerns of the impact of IPA on the citizens of Millard County (which he represents), and believes that the biggest concern is the governance structure of IPA.
Cameron Cowan, General Manager, Intermountain Power Agency, responded to the findings of the audit. Eric Bawden, General Counsel, was in attendance as well.
Mr. Cowan responded to a request from Senator Vickers to help him understand how the process worked with the municipalities to decide how much of the hydrogen power they were going to use, and how much was going to go out of state.
Mr. Cowan answered a question from Senator Vickers regarding how the decision was made to go from 1,800 megawatt capacity to 840 megawatts.
Mr. Cowan responded to a question from President Adams as to why the cloak and dagger and not sharing information about a public entity with the auditors so that we could have good information for taxpayers and lawmakers to be able to make good decisions.
Mr. Dean also responded to this question from Speaker Wilson.
Mr. Minchey responded to another question from Speaker Wilson regarding how "privileged information" was being withheld from state auditors.
Mr. Cowan responded to Speaker Wilson's request for help understanding how five years' worth of meeting conversations could be privileged.
Mr. Cowan also responded to Speaker Wilson's question.
Mr. Cowan responded to Speaker Wilson's question to help him understand why the Legislature should not go in and think about changing the governance so that they can get better information about what is happening with IPA.
Speaker Wilson commented that most lawmakers will not feel like they can go back to their constituents and say they did nothing in the wake of this audit with the governance of IPA, based on the fact that we cannot get good line of sight into what is happening there.
Mr. Minchey commented on Mr. Cowan's response about contracts that could be negated if the governance was changed.
Representative Romero commented on the importance of being mindful of how we treat people and how we as members of the Legislature talk to them when they come up here, as that has not been the case with other colleagues at other times. The Representative asked for this to be on record.
Mr. Cowan answered a series of questions from Representative Shultz regarding who sets the rates for energy users and why the Public Service Commission is not involved in that process.
Mr. Cowan responded to a question from Representative Schultz regarding property taxes and why they have a different agreement than what everyone else pays.
Mr. Cowan responded to a question from Representative Schultz about where IPA is in the process of switching from coal to natural gas, and then to hydrogen.
Mr. Cowan responded to a question from Representative Schultz regarding the significant drop off in the purchase of Utah coal if we are not operational on gas until 2025, and this was discussed at length.
Mr. Cowan responded to a series of questions from Representative Schultz regarding the new facilities for natural gas, and what would be done with the current facilities operating off of coal.
Mr. Cowan responded to a final question from Representative Schultz asking whether he would be open to a new governance model as long as it does not interfere with current contracts.
Mr. Cowan responded to a question from Representative Romero asking if the coal mine was closed because of fires.
President Adams commented on the governance issue, and that we as elected officials have an obligation to oversight as IPA has benefitted from being a state agency.
Mr. Cowan responded to a question from President Adams about whether he would be open to having the state or another power agency look at those coal plants and purchase them or help us acquire those.
MOTION:Speaker Wilson moved to refer A Performance Audit of the Intermountain Power Agency to the Public Utilities, Energy, and Technology Interim Committee as the Lead Committee, and the Natural Resources, Agriculture, and Environment Interim Committee, and the Revenue and Taxation Interim Committee as the Review Committees. The motion passed with a vote of 5-0-1.
Yeas - 5Nays- 0Abs- 1
Sen. J. Adams
Rep. A. Romero
Rep. M. Schultz
Sen. E. Vickers
Rep. B. Wilson
Sen. L. Escamilla
3.Committee Business
MOTION:Speaker Wilson moved to approve the minutes of the September 18 meeting.The motion passed with a vote of 5-0-1.
Yeas - 5Nays- 0Abs- 1
Sen. J. Adams
Rep. A. Romero
Rep. M. Schultz
Sen. E. Vickers
Rep. B. Wilson
Sen. L. Escamilla
4.Audit Report Presentations
Mr. Brian Dean, Deputy Auditor General briefly reported on Government Excellence: Efficiency Evaluation Follow-Up Office of the Medical Examiner Efficiency Evaluation (Report #2023-12). Mr. Brent Packer, Lead Auditor, was also at the presenter's table.
Government Excellence: Efficiency Evaluation Follow-Up Office of the Medical Examiner (Report #2023-12)
MOTION:Speaker Wilson moved to refer Government Excellence: Efficiency Evaluation Follow-Up Office of the Medical Examiner Efficiency Evaluation the Legislative Management Committee as the Lead Committee.The motion passed with a vote of 5-0-1.
Yeas - 5Nays- 0Abs- 1
Sen. J. Adams
Rep. A. Romero
Rep. M. Schultz
Sen. E. Vickers
Rep. B. Wilson
Sen. L. Escamilla
5.Recommendation Status
Mr. Kade Minchey, Auditor General, introduced the recommendation status report. Ms. Blevins showed where that report can be found on the office's website.
6.Other Items/Adjourn
MOTION:Speaker Wilson moved to adjourn.The motion passed with a vote of 5-0-1.
Yeas - 5Nays- 0Abs- 1
Sen. J. Adams
Rep. A. Romero
Rep. M. Schultz
Sen. E. Vickers
Rep. B. Wilson
Sen. L. Escamilla