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Show Currently Speakingf Q NRECA By Moon Lake Electric Asso., Inc. Last week's paper carried a story on the Moon Lake Project released by Deseret Generation and Transmission Cooperative. An explanation of the function of this new cooperative and the advantages Moon Lake Electric realizes due to its formation should be of interest to our member-consumers. Since the early 1960s Moon Lake obtained the bulk of its power from federally operated hydro plants along the Colorado River administered originally by the Bureau of Reclamation and now by Western Area Power Administration (WAPA). This was an inexpensive, plentiful source of power. While it is still inexpensive, it is no longer plentiful. In 1970 Moon Lake Electric was told by the government that the hydro power from this source was fully allocated and by 1975 we would not be able to increase our allocation. This turned out to be true, and while our allocation for WAPA remained the same, Moon Lake continued con-tinued to grow and to meet the increased in-creased demand for energy, had to purchase supplemental power from Utah Power & Light Company at a much higher cost than WAPA power. Former directors of Moon Lake had the foresight to realize that the bureau power would eventually run out and they entered into coal leases near Rangely, Colo., with the intention of building, or having someone build, a power plant to take care of the future needs of the Association. By 1974 Moon Lake Electric's demands had increased to an extent that an engineering firm was engaged to study the feasibility of a plant. One reason that this course was pursued was the large amount of power requested by the oil shale industry. However, during the course of the study the oil shale industry changed their method of retorting and because of delays, their power requirements were greatly reduced. The reduced requirement by the oil shale industry made it necessary for Moon Lake to seek other participants whose additional load would make a plant feasible. The frontend costs (Environmental Impact Statements, engineering, surveys, etc.) in the millions, are almost as much for a small plant as they would be for a large one. A(j this same time the other cooperatives and municipalities in the state were feeling the same power pinch. They investigated the possibility of joining forces with Moon Lake Electric in building the power plant, now known as "The Moon Lake Project". Pro-ject". With their decision to participate, par-ticipate, the feasibility studies were again undertaken. They, along with Moon Lake Electric, formed Deseret Generation and Transmission Cooperative to coordinate this project and future power supply projects. In the interest of economics, the coal leases have been transferred to Western Fuels-Utah, Inc., which is a subsidiary of Western Fuels Association, a non-profit cooperative set up for the purpose of mining and distributing coal. They will mine the coal and deliver it to the plant at cost. An overriding royalty has been worked into this arrangement to be paid to Moon Lake for the life of the mine. Within three years the cost Moon Lake has incurred in connection with the coal will be defrayed. If, for any reason the project does not go, there is a provision that the coal reserves will revert back to Moon Lake. The advantage of the forming of Deseret G&T to Moon Lake Electric, as well as the other entities, is the securing of an independent source of power and the sharing of the cost of the financing and administration of these projects. If it were feasible to build a small plant by ourselves, as we said before, the front-end costs would be nearly the same as for the larger plant and Moon Lake Electric would be paying 100 percent of these costs rather than a shared portion. Hopefully this will answer a few of the questions you may have had regarding Moon Lake Electric's relationship to Deseret Generation and Transmission Cooperative. |