Deseret Generation & Transmission Co-operative, Sandy, has entered into an agreement with Tri-State Generation & Transmission Association of Denver and PacifiCorp of Portland to study a possible acquisition of Deseret's assets.
Deseret is a wholesale power supplier to six electric distribution co-operatives serving consumers in Utah, eastern Nevada, southwestern Wyoming and neighboring areas of Colorado and Arizona. The Roosevelt-based Moon Lake Electric Association is the largest of the rural co-operatives in Deseret's system.Russell Cowan, Moon Lake member relations manager, said Moon Lake is optimistic that a sales agreement favorable to the local association and its consumers will be reached.
According to a joint news release, the participants in the acquisition study will determine poten-tial benefits to be derived from integrating resources, economies of scale and an extended electrical transmission system. A steering committee of officers of the three utilities will be established to coordinate the study's efforts.
The boards of directors of the three utilities would have to approve any plan for the exchange of assets. Also required would be approvals by the member systems of Deseret and Tri-State, as well as regulatory agencies and ultimately Deseret's creditors. The signed agreement also provides that Deseret develop and present to its board of directors a plan to address employee concerns.
Deseret owns a 25-percent interest in PacifiCorp's Hunter II power plant in Emery County and leases and operates the Bonanza Power Plant near Vernal.
The Bonanza Plant was constructed in the early 1980s to meet the needs of a rapidly growing rural economy. However, growth in Deseret's service areas did not take place as projected, and the prospect for future growth is uncertain.
In the mid-1980s Deseret began to secure markets for its additional generation capacity. Power sales to several California municipalities resulted in significant revenue but have not been sufficient to provide Deseret with long-term financial stability. This has required Deseret to study alternatives that will provide stable rates for its members. One such alternative was a proposal to sell Deseret's share of Hunter II to PacifiCorp, a proposal PacifiCorp and Deseret announced in 1992.
Tri-State G&T is a wholesale power supplier to 34 rural electric distribution systems serving a population of approximately 600,000 in Colorado, Nebraska and Wyoming.
PacifiCorp through Utah Power and Pacific Power serves 1.3 million customers in seven western states.