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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Time to Take a Hard Look at Utility Companies – Again!

STILL BURNING: The coal-fired power plant near Independence, Ark.

STILL BURNING: The coal-fired power plant near Independence, Ark.

New Orleans   The other day I was talking to an archivist as part of an oral history project about ACORN, and we were covering the early 1970s, and as we got ready to march forward to the 20/80 campaign, she stopped me and said, “What about the utility campaigns?” Good point, and that’s where we will start next time we meet, but it also was a wakeup call and a reminder that gas, electric, and water utilities need to be front-and-center organizing targets once again just as they were in the 1970s for both the same and different reasons.

The responsibility of utilities for clean water is obviously front page news these days, underlining the lack of infrastructure investment and, sadly, the willingness to inflict damage to citizens, especially minority and low-and-moderate income families with lead and an array of poisons. Environmentalists have been hammering on power generating companies for some of the same problems as well as trying to wean them from coal burning plants and towards more alternative fuels. The cheapness of oil and gas right now makes that push a little easier, but it’s a fight.

The battles of the 70s certainly included the issues of coal and the famous fight of ACORN in Arkansas to downsize the plans for what would have been at that time the worlds’ largest coal burning plant on White Bluff on the Arkansas River between Little Rock and Pine Bluff proposed by Arkansas Power & Light part of Middle South Utilities, now Entergy, but the fights were also over pricing. The costs were escalating for consumers, while businesses and heavy users in industry were paying pennies for power and being subsidized by the small customer or the “biscuit cookers,” as gas mogul, Witt Stephens used to refer to all of us. Investor owned utilities, as public utilities, are regulated by public authorities either elected or appointed depending on the state, but that also means that legislators are always open season for utility lobbyists so guaranteed rates of return and paddy cake handling is all too common.

Maybe we’re about to go to war again though as indicated by a huge dispute in central Louisiana with CLECO, an investor owned operation headquartered in the middle of the state and serves only Louisiana residential customers, almost 200,000 of them, and wholesale customers in Mississippi as well. CLECO has the highest rates in the state, and that along with its monopoly position drew the interest of a private vulture firm that specializes in operating huge infrastructure projects. Macquarie Infrastructure and Real Assets is named after an Australian bank, but it’s a US-based operation with offices all around the world and big time assets as well. It specializes in monopoly products that are essential services like ports, airports, and of course utilities. One of its recent properties is the Hawaii Gas company. There can’t be a more captive consumer base that being the sole gas provider on the islands!

Macquarie is trying to buy CLECO to keep singing that song, and CLECO’s board was good to go, but the Public Service Commission is elected in Louisiana and so far has refused to approve the merger. Most interestingly they are standing in the way over the very issue that makes CLECO so attractive to Macquarie, the exorbitant utility rates. Macquarie is trying to sweeten the pot by offering consumers a couple of months of free power. Several of the commissioners aren’t fooled though and are demanding that the rates be reduced by 20% or more before they’ll vote yes.

Who knows if they’ll stand pat or fold, but it’s worth starting to look at utilities again. Gas prices are going up. Coal is on the ropes, but utility bills are continuing to rise, so it may be time to dust off some of the old strategies and tactics and take a hard look at these companies again and suit up for battle.

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