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Co-Op Reformer: Cherryland Resolution Vote ‘Fails Perfectly’
TRAVERSE CITY—Capping their 90-day campaign to educate their fellow Cherryland Electric Cooperative members about the costs and financial risks of a proposed northern Michigan coal plant, a group of local citizens brought a resolution to the floor of their co-op’s annual members meeting this past Wednesday afternoon calling for more information about the project.
The resolution requested more transparency about how the co-op’s financial involvement in the coal plant, which Wolverine Power Co-op wants to build in Rogers City, would affect Cherryland members’ rates.
The resolution was introduced, seconded, and debated before a record crowd of members that assembled at Wuerfel Park in Grawn for the annual meeting.
But when the vote came, 25 percent of the members present supported it.
However, Tom Karas, founder of Co-OpConversations.org, the Web-based group that pushed the resolution, said that he sees the vote as a victory.
“It was a perfect defeat,” according to Karas. “We couldn’t have asked for much better.”
“We knew going in that actually passing the resolution on the first try was a long shot,” he said, “but we also attained our real goal—educating co-op members about the financial aspects of the Wolverine coal proposal, which Cherryland is actually very involved in.”
In fact, the members meeting featured Wolverine CEO Eric Baker, who candidly told the meeting that his firm, which is partially owned by Cherryland, had already spent $20 million of its company revenues on the proposal to build a new coal plant in Rogers City. He disclosed that his firm had also spent $7 million exploring a coal plant venture with another firm that was eventually abandoned.
Baker also acknowledged that Wolverine and the four retail co-ops that own it—Cherryland, Presque Isle Electric & Gas, Great Lakes Energy, and Tri-County HomeWorks Co-Op—could conclude “new construction may not be the best option.”
Karas took issue with some of the language Baker used in his address.
“Although we appreciate Mr. Baker finally explaining the costs associated with the proposal so far, to describe the monies invested as ‘revenues’ is a gross misstatement,” Karas said. “The money Mr. Baker is referencing is member money, not Wolverine revenue. It was drawn from member accounts through a special funding mechanism over the last four years. The members of Cherryland made an unknowing investment in a plant they may or may not want. So Mr. Baker obviously tried to cover up the true source of the money spent so far.”
The resolution that Karas’ organization came up with called on Cherryland to disclosure the most recent cost estimate for the proposed plant, and the effect it would have on members’ electricity rates.
Wolverine unveiled the plant proposal in May of 2006 with a $1.2 billion price tag attached. Since then, most details of the co-op’s expenditures on the project, as well as updated information about its potential price tag, have remained secret.
During debate over the resolution, some in the crowd said that, while they supported the request for greater transparency, they felt that asking for an updated estimate of the proposed plant’s cost within 30 days left too little time for officials to react. Others, however, were impatient that there has been so little information given during the more than three years that the proposal has been under consideration.
After the debate, the resolution was defeated by what appeared to be a 3-1 margin.
The debate over the resolution discussion, according to Karas, was part of an effort by Co-opConversation.org to spark wider awareness and discussion of the Roger City coal plant’s finances and its effect on members’ rates.
Earlier in the week, the organization produced a public event at the State Theatre in Traverse City, called Coal Night, that attracted 228 people to a two-hour presentation by national experts on coal financing and technology, plus video messages, and the award-winning documentary Fighting Goliath – The Texas Coal Wars, which was narrated by Robert Redford.
According to Karas, the reform group met the goals it set earlier this spring—forcing Cherryland and Wolverine to at least begin discussing financial transparency and educating co-op members. Karas said that the 30,000 visits the group’s website has attracted demonstrate strong interest in the cost issues his groups is raising.
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