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ELECTRIC CO-OP TO CUT ABOUT 60 JOBS

SHARE ELECTRIC CO-OP TO CUT ABOUT 60 JOBS

Lynn Mitton, general manager and CEO of Deseret Generation and Transmission has announced plans to reorganize and reduce the electric co-op's work force by Oct. 2.

The reorganization, which is expected to eliminate about 60 positions, will affect employees at the Bonanza Power Plant near Vernal and at the cooperative's main office in Sandy.Moon Lake Electric Association, based in Roosevelt, is the largest of the six rural electric distribution cooperatives in Utah, eastern Nevada, southwestern Wyoming and neighboring areas of Colorado and Arizona, which make up Deseret. Moon Lake Electric will not be impacted by Deseret's decision to downsize operations.

Mitton told employees at Bonanza and at headquarters in Sandy that it's imperative the company obtain maximum efficiencies in its overall strategy to survive in today's marketplace.

"We're facing an unprecedented competitive environment in the electrical utility industry, " Mitton explained. "Other utilities have already enacted work force reductions and are cutting costs."

Deseret was dealt a harsh economic blow immediately after opening the Bonanza plant in 1985 when it became evident that the market for Bonanza's energy would not materialize as anticipated. The plant and it's associated transmission, railroad and coal operations were built at a cost exceeding $1 billion.

About five years ago Deseret implemented an agreement with creditors to defer payments to give it time to seek energy markets outside the state, but those plans failed as well when surplus energy supplies across the country drove down demand and price. Deseret is currently in discussions with potential buyers for a possible sale.

Mitton says Deseret is doing everything possible to analyze each aspect of operational costs including the cost of coal which represents Deseret's largest operational expenditure. In an effort to bring coal down to competitive levels, Deseret's coal supplier, Western Fuels Utah, last month set in motion a huge work force reduction at their Deserado Mine near Rangley, Colo.

In addition, Deseret is attempting to sell excess generation as a means to reduce costs, Mitton noted. "We are implementing a very aggressive power marketing campaign and we have also initiated negotiations to sell over half of our power generation to third parties."

To encourage load growth and financial stability, rural electric co-ops who are member/owners of Deseret are working with Deseret's power marketing division to establish stable and competitive rates for consumers.

Moon Lake Electric officials are "active participants" in the on-going discussions between Deseret, its creditors and potential third party purchasers. Moon Lake is contractually obligated to purchase approximately 75 percent of their wholesale power supply from Deseret.

"Our position is to come out of this with competitive wholesale rates. We are not content with present wholesale power costs and have been working to reduce those expenses," stated Grant J. Earl, general manager for Moon Lake Electric Association.

"We are firm in our position that our current wholesale power costs are unacceptable in today' s competitive environment. Our power costs effect the operating expenses for everyone - irrigators, small businesses, large industrial consumers - and we recognize our membership's need for lower operating expenses."