Reining in Electric Coops, as They Buck and Whine

The Advocate

New Orleans       The problem with celebrating our victories is that often we need to do so pretty quickly before the forces of reaction overrun us again.  Hopefully, this won’t be the situation in a recent critical breakthrough in the Public Service Commission regulation of rural electric cooperatives in Louisiana, but it’s worth concern.

A couple of weeks ago after months of deliberation, hearings, and delays,  the PSC approved several sweeping rule changes for rural electric coops.  The Minden Press-Herald summed up the changes well:

The two rules … require the cooperatives to insert into monthly bills details of how the board members are compensated, and allows co-ops to change voting procedures in co-op bylaws, such as choosing to eliminate quorum requirements.  The second rule allows members to vote on whether they agree with the compensation packages the boards had given themselves, the report read.  Also in the second rule, members of co-ops are allowed a variety of voting techniques — such a mail. “But the wording on the ballot must be approved by the Public Service Commission and regulators must choose an accountant to oversee the vote count,” the report read.  In addition, the rule imposes term limits on board members, as well as requiring directors to receive insurance, if the members approve, at the same level as the co-op’s employees. Commissioners expressed shock upon learning how lucrative the compensation packages are for board members who run the 11 cooperatives that provide electricity to a little less than half the state.

This is ground breaking not only in Louisiana but throughout the south, if not nationally.  Not only are terms limited, but the PSC has put a wrench into way that local coops, their managers, and directors have stacked the deck to prevent any semblance of membership democracy.  I don’t believe in term limits, but this is the exception to my rule, because the cooperative democratic process here and elsewhere has become so estranged from democratic practice or coop principles, that perhaps term limits are the only way to break up the corrupt cabals that have diverted membership power and resources to their own advantage.  Allowing voting other that in meetings where people can be bullied and intimidated or unable to attend because of notice or timing is also important, as well as the fact the PSC is clearly indicating that they are going to keep their eyes of the cooperatives until democracy is restored and assured.  Hallelujah!

The only fly in the ointment is ALEC, the Association of Louisiana Electric Cooperatives.  They don’t want their hayride to be over where they will be forced to pay attention to the membership’s interest and precious dollars, rather than the highly paid management and directors of the cooperatives and their semi-appointed board members.  ALEC is debating going to court to challenge the PSC’s authority here and already has a bill before the legislature that would allow them to ignore the PSC’s orders for more democracy and fiscal accountability.

Jeff Arnold, the ALEC boss, disingenuously told The Advocate that they didn’t need the PSC’s orders because most of their member cooperatives had “already adopted policies to keep the insurance policies the same as employees.  Nine of 10 also have passed resolutions on quorums and term limits.”  Of course, Arnold is never going to point out the obvious contradiction in his statement since the only reason the cooperatives got on top of their self-dealing and anti-democratic procedures was because the PSC went wild over their abuses, which is the very reason they want the PSC to keep of their business so they can go back to fleecing the consumers who are their members like they were doing before.

Even in Louisiana, they may not be able to get away with such an open and obvious rip and run.

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Louisiana Co-ops Run from Democracy and Accountability

New Orleans    Cooperatives should be the shining example that we hold up to corporate abuse and investors greed.  Idealists raise the prospects of cooperatives as the solutions for commerce, housing shortages and affordability issues, worker ownership, and all manner of other social problems everywhere I travel.  The experiments are small but exciting, and then there are rural electric cooperatives in the United States that regularly make a mockery of anything like the principles of democracy and self-government touted in cooperative bylaws.  The latest examples arise in Louisiana which had been positioned for a brief moment as a model for forcing change and bringing electric cooperatives back to their roots.

Coming out of the fog, the elected commissioners of the Louisiana Public Service Commission finally noticed the wild self-dealing of board members of the eleven nonprofit, tax exempt rural electric cooperatives.  Though they are not supposed to be paid, coop managers in order to feather their own nests, were abetting elected directors’ cooperation by helping them  receive huge per diem payments and an array of benefits, including full health insurance along with fully paid junkets to board meetings and conventions.  One commissioner, Foster Campbell, claimed the average compensation of a board member in Louisiana was $27,000 per year and mentioned that these unpaid, volunteer coop board members were better paid than state legislators and local school board members and do less work.

Recently, the Public Service Commission staff at the request of PSC commissioners published new rules.  According to the report by Mark Ballard in The Advocate, “…rules…included a ban on providing board members health insurance, a limit on how much they are paid to attend meetings and a requirement that serve limited terms.”  None of these proposals could be called revolutionary rather than common sense, especially given the widely reported abuses.  The Association of Louisiana Electric Cooperatives, representing eight of the eleven cooperatives, cried like a stuck pig.  Their position is that the PSC needs to keep its nose out of their business, regardless of their subversion of democracy and exploitation of their members, alleging that the PSC can only look at the rate structure and nothing more.

Reportedly concerned that he lacked the votes, Campbell proposed an amendment to the new rules that would allow members to vote on the compensation of their board members and hopefully their staff as well.  The Advocate reported that the amendment would require the cooperative to detail for all of the customer-members exactly how much they were paid and they would have to vote up or down on that amount, quoting Foster as saying, “If they vote ‘yes,’ then you get the money.  If they vote ‘no,’ you don’t.”

This is weak tea compared to both the problem and the initial rules.  The association, more than willing to enable both corruption and never finding an anti-democratic measure it couldn’t endorse to disempower the membership and utility users, claimed they had been ready to march into court.  Holding a fig leaf over their scandalous response, they added that seven of their members had already voted to not offer board members any better insurance packages than co-op staff receive, concealing the fact that there is likely no justification for board members to receive any health insurance whatsoever, since they are not in fact employees, and their work is at best intermittent and not even part-time.

This kind of cynicism is killing the cooperative movement and infecting it with the same corporatism and greed that characterizes other business formations.  Making a mockery of democracy is not sad, but tragic.

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