PEC 4 U: working for democracy and transparency at the Pedernales Electric Co-op

"One of the first things we need to do is deal with the election of directors. We've seen some old boys appointing their friends. Let's have no electioneering, no opposition to new candidates, no possibility that your picked slate would win and win big. I don't think we've had an election in the past 30, 40 years."

--PEC Director O.C. Harmon, at the Annual Meeting 6/19/07

Recent Developments:

May 1:

Candidate Forum, Johnson City 6PM. Candidates get 2 minutes apiece to convince you to vote for them. We don't feel that's enough, so we've added an online Candidate Forum where YOU can ask YOUR questions. (Maybe you'll even get answers!)

More about the Settlement hearing soon.... There's still time to send in your objections to the settlement - see the Lawsuit section.

April:

Board meeting: April 21, 2 pm, Cedar Park City Council Chambers at the Cedar Park Public Library, 550 Discovery Blvd (see map and agenda). Members welcome.

The Lawsuit: According to the settlement terms, after all is signed and sealed, we will still be left with the majority of the Board scoundrels who got us into this mess. The Board and Bennie will not be held accountable for anything they have done, no matter how irresponsible, negligent, fiscally irresponsible, self-serving or even criminal. No one who received the self-dealt largess of extravagant compensation and benefits will be made to repay a dime that they extracted from the coop's coffers. And we, the member-owners will be left with legal fees amounting to millions of dollars, much of which will not even be covered by the organization's errors and omissions policy because, clearly, the actions of the Board and management were far worse than errors and omissions.

But all is not lost. You can object to the settlement. There will be a "fairness hearing" on April 30, and those written objections received by April 28th will be considered in that hearing. More details on the Lawsuit page, including a sample objection.

The Election: 59 candidates have submitted petitions to run for the 5 available Board seats. About 1/3 of those have filled out our Candidate Questionaire as of 4/11. Have a look at why they're running and what they plan to do as Board members.

The election schedule is as follows:

April 7: nominations due either at PEC hqs or postmarked
April 14: background checks completed
April 15: PEC send letters and makes phone calls informing candidates of their eligibility
April 18: An overview session for candidates to be held at PEC headquarters, with Garza, interim Board head, and probably a facilitator
April 21: Board meeting; announcement of candidates in each district
May 1: Candidate Forum: at training center. Website to include videotaping.

From here on, matters will be handled by Election Services Corp (ECS), an independent outfit from NY. They will print the ballots, develop the online voting site, and count the ballots. They will attend the annual meeting to count in-person votes.

May 7: ballots mailed out with candidate bios (200 words)
June 13: deadline to return online and mail-in ballots
June 21: Annual meeting

Mid February:

Texas Attorney General enters PEC investigation (see article in our Media section).

PEC held "open" Board meetings on January 21 and again in mid February, which was a first. PEC4U stalwart Ric Sternberg videotaped the meetings, and has made the footage available on his Neighbors In Paradise website. It's not exactly riveting material, but you should see what your "representatives" are doing. After dealing with trivial issues in public, the Board goes to "executive session" behind closed doors and continues meeting. We acknowledge that there are certain sensitive topics which are best discussed in private (lawsuits and some contract negotiations, for instance), but we also hope that the board will share as much information as possible with the members it represents.

Late Jan/early Feb:

PEC releases petition forms for Board Candidates, PEC4U releases Candidate Questionaire. More...

A Senate investigation is on the trail - not just of PEC, but all Texas electrical coops, with PEC in the main spotlight. More...

January 21: Board meeting (open to the public) Proxy voting and Nominating Committee abolished. Ballots will be mailed and online voting established, with a 3rd party counting the votes. See articles on the In The Media page. The general impression brought back by Watchdogs members who attended was that the board was "evasive", "scattered", and that "They all certainly looked quite glum to be raked over the coals by the disenchanted members who spoke." One member who attended reported that:

"When reviewing a documented agenda item, that being the total electricity bought and sold for 2007, I asked why the amount bought had increased by 5% and the total cost had increased 40%. The acting President could not answer my question and he leaned over and asked the acting GM who responded to me that he didn't know. I asked the board if anyone knew and complete silence. This was an agenda item for review! That's their core business! "

That member was promised an answer the following day be email or phone call. No answer by 2/6/08...

January 18: Board President Burnett resigns effective immediately.

January 16: Blanco County prosecutor to begin Pedernales investigation, PEC4U delivers letter requesting resignations of entire Board.

January 4-15: More articles from the Statesman, San Antonio Express-News, and Junction Eagle

Austin Energy head Juan Garza hired as new PEC General Manager, starting Feb 8. Generally regarded as a good choice (though behind closed doors and for too much money).

PEC bigwigs live large on 'carte blanche' expense accounts. Anyone for high dollar Celine Dion tickets or 6-week paid "sabbatical" in New England, including expenses? The feeding trough is this way...

Judge Dietz calls for settlment talks in the lawsuit, some fear potential cover-up - "One of the oldest tricks in the defendant's books is to require that the records of a lawsuit be sealed as part of the terms of a settlement." says one long time consumer advocate.

Links to the articles are on our In the Media page.

Full text of depositions of Burnett, Linebarger, and Harmon are released. We're waiting for clarification from the lawyers as to whether Fuelburg's deposition is still classified 'confidential' in full or part before we publish them on this website. Some of the answers are doozies.

November 13: PEC announces major changes.

In a 4-page letter sent to all members, PEC today announced the adoption of many of the initial changes that PEC4U has been working for:

-Board President Burnett to resign effective June 08
-General Manager Fuelberg to resign upon finding a replacement
-Election practices cleaned up, including most of our requests (single member districts and board membership term limits have not been mentioned as yet)
-Capital Credits to be returned to members (not all at once, as they understandably have quite a backlog to catch up with - unfortunately, the $7 million they've earmarked for pre-1976 reimbursement is only around 3% of our total capital contributions)

PEC also announced that the filing of their IRS Form 990 for 2006 will take place on Nov 15, 2007, and that the form will appear on their website the next day. As requested by PEC4U, full compensation for key employees will be included in the Form 990, and is outlined in the announcement.

PEC4U would like to thank all of you who helped achieve these goals.

Welcome, Pedernales Electric Cooperative owner!

Did you know that PEC has over 200,000 owners? Any person, firm, or corporation may become a member by paying the membership fee (for all the details on how to become a member and/or whether you are one, check this PDF from PEC).

PEC also has nearly 900 proud, hardworking employees at last count. We believe it is the desire of most PEC employees and Members to want the best co-op in the country. PEC has a great history, but in recent years management has been hostile to efforts by members to question some very odd-sounding practices. It is our desire to effect changes, where appropriate, to policies that bring the most benefit to the utility customer and PEC employees.

It appears that our concerns are falling on the right ears. In a letter from June 7, 2007 State Senator Troy Fraser, co-chair of the Electric Restructuring and Legislative Oversight Committee, echoed the concerns outlined on these pages about the Board election process, Board compensation, the lack of any rebates or dividends to members from the Patronage Capital fund, and states that "All these concerns are compounded by the roadblocks the PEC Board has established that limit access to information by member-owners." He further reminds the Board that if they do not address these problems, "the state could be forced to address these issues through legislative action."

If you are a member, then you are an owner. How do you want your co-op to be run? All of us have different priorities for PEC. PEC4U's current priorities are (as handed out to the attendees of the Annual Meeting on June 16th):

1) Transparent financial information.

What is the PEC doing with our money?

Where is the members' capital?
Why aren't complete annual reports provided to all members?
Are there conflicts of interest?
Is the bidding competitive?
Who benefits from the off-balance-sheet subsidiaries?
And how do PEC's financial practices benefit us as a member-owners?

Establish more reasonable compensation for the Board's duties and for top management,

2. Democratic member control.

Change the entire election procedure (see more detailed comments about the current procedure)

Single member districts, for accountability
Open up nominations to avoid handpicked candidates ACCOMPLISHED

Allow nomination by petition ACCOMPLISHED
Include petition-nominated candidates on all election materials on an equal footing with the Board's hand-picked candidates

Institute term limits. (Isn't 30 years more than enough?)

3. Open communications with membership

The governance of the PEC is too secretive; let's shine some light. The member-owners want:

Open Board meetings - ACCOMPLISHED (mostly) - There's still too much done in "executive session" but PEC now announces dates and times of Board meetings and allows members to attend and comment.
Timely access to information (start with the web site)
Honest dialog between Members and Management
Openness and honesty in communications - not consumer polls, not advertising.

Please join the Watchdogs discussion list for details as they emerge.

Please call the PEC offices and voice your concerns and complaints, and make constructive suggestions. You are an owner of this Co-op, and should have a say in how things are run. You may also wish to increase the pressure on PEC by continuing to make calls to Senator Troy Fraser (see the letter cited on the home page) and the other members of the Electric Restructuring and Legislative Oversight Committee:

Co-Chairs

.Rep. Phil King
.Senator Troy Fraser

Senate Members:

.Senator Jane Nelson
.Senator John Whitmire

House Members:

.Rep. Joe Crabb
.Rep. Harold V. Dutton, Jr.