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Evaluating Your Cooperative: an Introduction
Tennessee Congressman, Jim Cooper’s report, “Electric Co-operatives: From New Deal to Bad Deal” is the best source we’ve found for an overview of how electric cooperatives have strayed so far from the original intent. The report explains not only what has gone wrong, but offers suggestions on how to get back on track. Click here for the full report. For those of you who don’t want to read the full report, Click here for a summary, of what a good electric cooperative looks like, and why many cooperatives today are not serving their members’ best interests.
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A Change for the Better
Many electric cooperatives do not appear to fully appreciate the rapidly-changing situation utilities find themselves in, with global warming, energy efficiency, and clean energy issues. Cooperative members have begun to notice that the system has broken down, not only around energy issues but financial management issues as well. Read the stories below to learn how co-op mismanagement and denial of the changing energy playing field have affected co-op members. then scroll down and learn how co-op members are taking charge to protect their present and future interests.
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Pedernales Electric Cooperative
Texas—Members were denied access to financial information. The utility refused to allow state auditors access to their financial records. Destruction of some co-op files and information appeared to be intentional during the course of the court case and criminal investigation.
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Hilco Electric Cooperative
Texas—According to 2006 un-audited figures, the 7 directors of HILCO Electric Cooperative, Inc. spent approximately 30% (over $200,000) of the total profits on themselves (travel expenses, meals, etc.), and then raised our electric rates. When the board of directors found out we were revealing information, they clamped down even tighter on their den of secrets, making updated information impossible to obtain.
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CoServe Electric
Texas—Members filed suit against their co-op on February 18, 2009. The lawsuit alleges that the co-op has wrongfully taken $54 million of the members’ money. The suit also alleges that controlling directors of the cooperative’s board have placed the members’ fund at risk in for-profit business endeavors, subverted democratic control of the co-op and conducted their operations in a culture of secrecy.
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Yellowstone utility sues over coal plant contract
Montana—Dec 29, 2008—One of five electric cooperatives behind a new coal-fired power plant under construction near Great Falls is going to court to sever its ties with the project. At issue is Yellowstone Valley's interest in the 250-megawatt Highwood Generating Station. The plant's projected cost has nearly doubled from an original $456 million price tag to $900 million.
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Southern Montana Electric Generation
Montana—The 50,000+ electric cooperative members in Montana who were going to use the coal plant will be paying $30 per month for the next 35 years to recoup the $40 million spent thus far on an unfinished power plant.. Co-op officials are looking for long-term financing to cover the $40 million which would offer some relief to customers.
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East Kentucky Power Cooperative
Kentucky—East Kentucky Power Cooperative, Inc. (EKPC) operates as a not for profit generation and transmission utility in Kentucky. It provides wholesale energy and services to distribution cooperatives that serve homes, farms, businesses, and industries. The company provides its services through renewable energy plants, peaking units, hydro power, and transmission lines. East Kentucky Power Cooperative, Inc. was founded in 1941 and is based in Winchester, Kentucky.
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East Kentucky Power Cooperative
Kentucky—The PSC also said that in the event the $12.3 million spent on replacement power affects the financial bottom line enough to trigger default provisions leading to higher interest rates or a cutoff of credit, the financial consequences will have to be borne by the distribution co-ops and their customers.
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Richmond Virginia's Old Dominion Electric Cooperative
Virginia—In the face of an economic recession and mounting threats from climate change, the prospect of introducing an unnecessary $6 billion coal plant is outrageous. ODEC’s proposal is extremely concerning and out of touch.” - Tom Cormons, Campaign Coordinator with Appalachian Voices
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Intermountain Rural Electric Association
Colorado—By the 1980’s IREA had become a huge corporation perceived by many members as insulated and nonresponsive. It was alleged to be losing money, paying huge salaries to executives, had nearly doubled electric rates in one year, was giving lucrative “pro-growth” concessions to developers, had audit trouble, and had amended its by-laws to strip members of governance rights.
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 Cobb EMC
Georgia—Eight members sued the co-op and Cobb Energy in fall 2007, saying ties between the two had drained assets from the co-op, enriched co-op insiders like the CEO, and was rife with conflicts of interest.
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Poudre Valley Rural Electric Association, Colorado
Ft. Collins, CO– In response to Poudre Valley Rural Electric Association’s (PVREA) proposed 10.6 percent average rate hike for its customers in 2008, the PV-Pioneers, a Colorado non-profit, presented an alternative plan that would encourage Home Energy Makeovers for those PVREA customers least able to pay for a rate increase and least able to afford investments in energy efficiency.
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