Important Issues at PEC

We’ve witnessed some remarkable and positive changes at PEC in the past year. We had our first democratic election of directors, we have a new management team, and many member-focused policies have been adopted. We now have open and public board meetings, the right to access co-op records, and a cooperative that does its work in the bright light of day. While I am supportive of these changes and appreciate our hard-working board members who have done this, I know there is still critical work to be done. Following are some issues that the board is facing now and in the near future, and my viewpoint on appropriate action:

1) Rates & Overhead Costs
This has proven to be a controversial subject, largely because it is a complex issue that is frequently misunderstood. PEC hired C.H. Guernsey & Company to do a rates analysis. Their findings, coupled with the recommendations of the PEC Power Supply Committee, was presented to the board and to the public. Based upon the cost of power and the cost of PEC to deliver that power, it looked as if a rate increase was in order. However, that is just an analysis and recommendation not taking into consideration other options PEC could utilize to lower its cost of operations and distribution of power. Since then, the board has sent it back to committee for further analysis and new data is being presented for discussion.

I do not support an increase in member rates or the service fee. I think that PEC should first look for areas to increase their efficiency and lower their operating costs. The Navigant report and the C.H. Guernsey report both show that the PEC overhead costs are above average. Finding ways to trim overhead costs should be done before any rate increase is considered. I would also like to see a rate structure which rewards our members who conserve and use less energy.

2) Increased use of Alternative Energy
We all want our electric providers to user cleaner, greener energy. I don’t know anyone who doesn’t support that. As a board member, it would be my responsibility to marry this desire with reality. The reality is alternative energy is still “a work in progress.” It’s out there, and we currently have a contract to buy wind power from the Trent Wind Energy Farm in south Texas. The harsh reality of this is that this wind power cost us more than the power we buy from LCRA, which uses primarily fossil fuels. PEC in on the right track when it comes to alternative energy—we’re carefully folding it into our power portfolio as it becomes reliably available. I support this initiative to thoughtfully adopt new sources of alternative energy as they become both affordable and reliable sources. Its our members’ money that’s paying for this, and we must handle that responsibility wisely.

3) Regulation of Texas Electric Cooperatives
The board was recently presented with two policies proposals for regulation Texas Cooperatives. A bill written by Senator Troy Fraser (and mirrored by Rep. Patrick Rose) called for strict measures for open meetings, open records, election procedures, Public Utility Commission (PUC) oversight, and a series of “brackets” that would regulate other aspects of our electric cooperative. Another bill, written by Senator Ted Swinford, was much more lenient in regards to member rights and left complaints in the hands of the attorney general. Both bills had their apparent weaknesses: Fraser’s in that it was punitive to PEC through the use of bracketing, and Swinford’s in that it did not require appropriate member control.

In short, our board was presented with a lose-lose situation, and ultimately the majority voted to support the Swinford bill. While I probably would have voted for the “neutral” position of supporting neither bill, in hindsight I can see some wisdom in their stance. Since they took the action of standing against the Fraser bill, Rep. Rose has since come back to the table to compromise and taken out some of the damaging aspects of their proposed legislation. The result is a bill that protects member rights without penalizing PEC members for the abuses of the past (those bad people are gone now, so why punish the members left behind who are working hard to pick up the pieces and rebuild the co-op?). I am optimistic that this new and improved bill will pass the House vote and bring regulation and member rights to all Texas co-ops in an equitable manner.


4) Charitable Giving
As a community activist and philanthropist I am in support of charitable giving. In fact, it’s a time-honored tradition for co-ops to support their communities. I applaud PEC for giving, especially through student scholarships. However, our method for our charitable giving needs to be improved. Currently, our board votes on whether or not to donate PEC money for causes, and how much. While our board is elected to represent us, I think this is another area requiring more member control. As a board member I would propose a “operation round-up” type program where members can add on the amount of their choice to their monthly bill to give to charity. A variety of charitable causes could be listed and the member can elect how much to give. I think the result of this would be surprising…I think members would give more than our board currently allows and, because they have been given the right to choose, would have the benefit of feeling good about their willing donation.

My Speech

Copy the link below and paste it into your web browser to see my speech on the PEC web site. All candidates were given two minutes.

http://www.pec.coop/CorpProfile/mov4.aspx?mov=20090428_Forum_04.flv