Wagons firmly circled: Governance at REA’s and Tri-State

Anne B Butterfield, March 26, 2009

We don’t go around trying to restrict people’s autonomy do we? The inner libertarian balks at that. So why should Coloradoans support the Public Utility Commission in its quest to extend its regulatory reach to that big rural electrical company known as Tri-State?

The PUC is taking comments until April 6th on whether it should regulate the resource plans of Tri-State and any rural electric co-op directly involved in power generation. Tri-State is a wholesale power and transmission company which produces 75% of its power from coal plants and owns interest in a few coal mines. It is owned in turn by 44 rural electric associations, many of whose leaders like to smear renewable energy and efficiency. Tri State and the REAs are not regulated because of their supposedly democratic governance, being owned by their members.

The problem is that owner-members mostly don’t understand their status and don’t get involved in governance, allowing board members to grab plenty of power. Nationwide, REA governance is so bad that Rep. Jim Cooper (D-TN) wrote “Electric Co-operatives: from New Deal to Bad Deal?” On our neighbors here in the Front Range, Poudre Valley Rural Electric Association and Intermountain Rural Electric Association, here are a few stories.

The board of IREA spent $100,000 of member money to support the anti-global warming propaganda of Dr. Patrick Michaels, a professor of climate science at the University of Virginia. One-sided propaganda is richly provided on the co-op’s website and is always mailed to IREA members even though about half of them voted in favor of Amendment 37, Colorado’s renewable energy standard. The board also addresses its members as member-consumers, as if to de-emphasize their role as owners. The board doesn’t seem intent on honoring the members’ values and status, does it?

In its coup de grace of over reach, the IREA board in 2006 quietly committed $366 million of member money to a one-quarter share of the new Pueblo coal fired power plant known as Comanche 3, which will put the membership at risk if carbon costs get legislated. This move was such a shock to some members that they invented an advocacy group called IREA Voices; the utility tried to intimidate them with a cease and desist letter for using the term IREA.

Member-owners who wish to explore IREA’s governance can be met with a wall of opacity. Neil Priester of IREA Voices says that at annual meetings the board members don’t wear nametags and they sit up front with their backs turned to the audience. When he approached one of them, the board member said he was simply not interested in meeting with him.

PVREA is another fast growing co-op in the state, its membership having nearly doubled in 15 years. So it’s with alarm that its members should greet the new Articles of Incorporation which propose allowing the board to reduce its minimum number of members from eleven down to seven. This notion arrived in the mail this month without comment in a teeny change hidden nicely in several dozen mark-ups in a five-page, single-spaced document. Some think it’s a strategy to close down the diversity of the board just when the membership is at its largest, most diverse, and closest-ever to voting in new blood.

The president of PVREA’s Board, Keith Croonquist, has insisted that the small board option is for cost reduction. (Board members are paid about $20,000 each year.) How ironic it is for him to mention costs, since the PVREA board has spent up to $177,000 on an annual member shindig with live bands, paid speakers and lavish meals – and ballots mailed out only when specifically requested. This last foible was corrected at the request of a “new blood” candidate Steve Szabo who has been keeping PVREA on its toes.

The members of IREA and PVREA should resolve their governance issues by voting new blood into their boards in elections this month. With diversity, issues actually get debated rather than rubberstamped with the power of incumbency. As for the rest of us, let’s recall that the increasing coal emissions of our REA neighbors are indeed our business because they waft into our lungs, food supply and our children’s future. There is no reason for REAs to go on operating as de facto unregulated monopolies trying to hide behind filmy skirts of democracy.

Please write to the PUC by April 6th at puc@dora.state.co.us; the docket number is 09i-041e.