Area residents served by Empire Electric, a rural electric cooperative headquartered in Cortez, may see up to a 4-percent increase in rates within the next year if a citizens’ lawsuit fails to prevent the city of Monticello, Utah, from buying their own electrical system.

Empire Electric currently serves 874 residential and commercial members within Monticello. If the buyout occurs, it will lose those customers, but will continue to serve the approximately 160 members who live in rural Utah.

Neal Stephens, general manager of Empire Electric, said that Cortez-area residents may still see their rates rise soon even if the sale doesn’t go through, since the electric cooperative had already planned to do a study in 2001 to see if it needed to raise rates.

"There’s just no substantial impact [on their electrical service]," said Stephens. Electricity rates have not been raised since 1991.

Once Monticello is able to phase out Empire’s involvement, Empire will cut the number of employees working in the area from four to three, Stephens said.

The staff reductions would happen through attrition, Stephens said, since he expects an employee to retire within the next year. He also said that Empire would be able to gain back its customer base, if it continued to grow at the current rate, within three to four years.

A group of Monticello citizens, determined to put the $1.3 million deal to a general vote, may save those customers for Empire.

Just days before the May 15 closing date for the sale, Robert Low, Joel Palmer, Julia Redd, and Albert Steele filed suit in Utah’s Seventh Judicial District Court to stop their democratically elected officials from making the deal before a vote could occur.

In 1979, Empire Electric won the bid to purchase the Monticello system for forty years, with the option to re-purchase the system after 20 years.

Before Empire Electric took over supplying electricity to the city, residents experienced frequent outages and the city’s revenues were not high enough to complete repairs.

Since then, Empire has repaired wires and upgraded voltage levels so that outage rates are now at a rate of one-hour per customer, per year.

"We can all agree that the service from Empire has been excellent," said Trent Schaffer, Monticello’s city manager. "The community remembers what (the service) was like 20 years ago, and there is a lot of fear in the community about the purchase."

The city of Monticello began to study purchasing the electrical system in 1997. To date they have spent $51,000 on the project, and estimate the entire transfer of the electrical system will cost $2.4 million.

The city council hired an electrical engineer, Antone Tonc of Salt Lake City, to do a feasibility study and called other communities to find out what their experience had been.

The feasibility studies were presented to the community at two public meetings early this spring, both of which were attended by nearly 200 people. The consultant found that after paying off the costs to purchase the system, the city could make more than $200,000 a year from the sale of electricity.

Schaffer admitted that citizens who attended the meetings were largely in support of continuing Empire’s service, but he said that there are many silent majorities in the community that support the council’s decision.

The results of both an informal poll and the San Juan Record’s local telephone poll showed that citizens wanted to keep the status quo. In addition, a formal petition gathered 300 signatures in favor of a local referendum.

Despite the polls and the petition, the council voted 4-1 on March 22 to purchase the system in full on May 15. According to Schaffer, they decided to finance it through a short-term lease purchase.

Publishing the details of this financing is the basis behind the lawsuit.

According to Brent Stephens, one of the lawyers representing the citizens’ group, the city violated the Utah Municipal Financing Act and the Utah Open Meetings Act by not publishing the terms of the deal and not allowing for public comment on those terms.

Once the lawsuit was filed, the city called Empire Electric to request an extension on the closing date until all of the legal issues are settled. A judge needs to be appointed before the case can be heard in court.