San Marcos Mercury | Local News from San Marcos and Hays County, Texas

April 23rd, 2009
PEC's position on HB 1390 and SB 921

Pedernales Electric Cooperative General Manager

Note: The following statement from Pedernales Electric General Manager Juan Garza was given at PEC’s regular Board meeting on April 20.

Last week, the Board of Pedernales Electric Cooperative voted 6-1 to support one of two bills to reform the operations of electric cooperatives being considered by the Texas Legislature. Identical bill language was filed by Sen. Troy Fraser (R-Marble Falls) and Rep. Patrick Rose (D-Dripping Springs). Alternative reform legislation, supported by the statewide organization Texas Electric Cooperatives, was also filed by Rep. David Swinford (R-Amarillo).

The PEC Board vigorously – and publicly – debated the alternative bills, with all of the Directors focused on the same issues: protecting both the reforms that have been enacted at PEC and the interests of the Cooperative and its members. After this debate, the Board majority voted to support the Swinford bill and oppose the Rose-Fraser bill for the following reasons:

Brackets: The Rose-Fraser bill was peppered with “brackets,” provisions that would impose restrictions – and corresponding costs to members – on PEC and not other Texas electrical cooperatives. The Board felt it is generally wrong to treat PEC differently than all other cooperatives and Texas utilities and to punish PEC’s members and current management for the actions of prior management.

For example, the Rose-Fraser bill mandates that PEC have single-member election districts which takes away the PEC membership’s right to decide this key governance issue that is currently the subject of a lively debate among PEC directors and membership.

The Rose-Fraser bill would require PEC to get approval from the Texas Public Utility Commission before investing in electricity generation facilities. That could needlessly drive up the cost of PEC’s newly negotiated right to share facility ownership with the Lower Colorado River Authority. The requirement could also hurt PEC’s efforts to buy wind turbines or solar panels and sell or lease them back to individual members.

Open Records section: Under the current PEC open records policy, members may be required to document a legitimate reason before being given access to Cooperative records. The law allows this so-called “proper purpose” requirement for all other nonprofits in Texas. This reinforces the fact that these entities are businesses and prevents records from being used for purposes adverse to member interests. However, proper purpose protections are not included in the Rose-Fraser bill.

Third-party oversight: Under the Rose-Fraser bill compliance will be the responsibility of the Public Utility Commission – which is geared toward resolving issues through expensive, time-consuming administrative hearings that require costly outside lawyers.

The Attorney General – the state’s highest law enforcement office – would assume oversight under the Swinford bill. The Attorney General’s office has expertise in consumer protection and transparency measures, overseeing governmental open records and open meetings compliance, as well as monitoring other nonprofits. Most importantly, the Attorney General is well versed in resolving disputes over access to records and meetings through less-costly, informal mechanisms.

PEC has taken significant measures over the past year to ensure that the cooperative meetings, records and business practices are among the most open and transparent in the industry, and that our election process is undeniably democratic. The Board’s endorsement of Rep. Swinford’s bill was made recognizing that certain aspects of the bill should be strengthened. As an example, the Swinford bill does not require other coops to allow the same degree of public access to Board meetings that PEC has voluntarily adopted. In fact, it is our hope that other cooperatives will follow the example of PEC and commit to open governance.

We were heartened that during the hearing Rep. Rose and Rep. Swinford indicated their willingness to compromise. If that happens, we are convinced that lawmakers can pass legislation that treats all Cooperatives fairly while protecting their members’ rights.

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