The survey questions were either not well thought out and often completely irrelevant to the PEC’s mission of supplying electricity to their membership (strength of agreement/disagreement with statements like “The federal government should encourage prayers in public schools” and “A woman’s life is fulfilled only if she can provide a happy home for her family”) OR they were designed to provide a demographic profile of PEC members in order to fuel a PEC Public Relations push to convince us that PEC is our knight in shining armor.

We suspect that upon seeing the results of the recent Somerset Guild report, which showed that PEC’s Management and Board are not seen in a particularly positive light despite changes over the past two years, someone got the bright idea that they could simply tell us how good they are, repeatedly, and we’d eventually begin to believe it.

I’ve got news for you, guys and gals.  You’re going to have to earn our positive reviews by making the right choices in managing our Coop.  Whitewashing won’t do the trick.  You’ve made some excellent progress over the past couple of years, but you’re also holding back on some pretty important reforms.  And you’ve shown some Bennie Fuelberg-esqe tendencies by spending thousands of dollars of PEC members’ money to sponsor a table at a recent high society schmoozefest/benefit.  We happen to like the charity, but we don’t like your spending our money without our permission. (more details in the Watchdogs May archives).

As someone said a while back, PEC’s a big boat, and it’ll take a while to completely change course.  But we’d appreciate it if you’d help us turn the rudder instead of holding it back.  And stop trying to tell us we’re on a beautiful, efficiently run yacht headed toward the promised land when we can all see that it’s actually a servicable freighter, run by – well, not the Keystone Cops, but not exactly with military precision either, and our course just beginning to come around to the right direction.

In response to your survey, some members of PEC4U’s Watchdogs discussion group have come up with a survey of our own (preview link only) for the Board members and current Board candidates.  The live survey link was sent to all the current Board members and all but one Board candidate (we don’t have Tom Griebel’s email address) on Saturday, May 8th.

We’ll share the results here and on the Watchdogs discussion group.

By the way, you can read more details in the Watchdogs Archives, and add your two cents – or just stay informed – by joining the discussion.

Ballots were supposed to have been mailed on May 5th, so you should be getting yours soon.

PEC4U’s Steering Committee discussed at length as to whether or not we should endorse candidates as we have in the two previous democratic elections.  After weighing the positives and negatives of both the endorsement question and the candidates, we have decided that we should endorse once again.  Our choices for this year are:

District 4: Chris Perry

District 5: Steven Carriker

Of course, we encourage you to think for yourselves, examine the candidates, and make your own informed choices.  View the candidate’s short video statements on PEC’s website, and participate in PEC4U’s online Candidates Forum. 

And then vote!

Pedernales Electric Cooperative itself limits the candidates to something like 120 words and a short videotaped statement. We feel that this is not adequate for in-depth decision making (which we hope that our fellow members will do), and allows no public forum for questions and answers between candidates and the members. Shouldn’t we all be allowed to ask questions of our potential leaders, and shouldn’t the candidates be given the opportunity to explain their positions on various topics in depth? We think so.

Since PEC isn’t yet providing a satisfactory venue, PEC4U is once again filling the void.

Candidates, please feel free to announce yourselves in this forum. You may provide as much or as little information about yourself as you’d like. Thank you for choosing to serve the PEC membership.

PEC Members and other interested parties are welcome to voice opinions and ask questions about and PEC-related topic. We only ask that you keep it clean and relatively civil. We retain the right to restrict any Forum user who is abusive, crude, or uses foul language or is otherwise disruptive in the public forums or in private correspondence through this bulletin board.

This Forum will remain online for about a month after the election on June 19th.

Grand jury indicts former Pedernales leader, longtime lawyer June 18

Many enablers led to indictments in scandal June 20

Indictments say pair directed co-op money to relatives of PEC executives June 20

In District 6, Larry Landaker won with 5,152 votes, defeating David Bethancourt with 4,488 votes, Linda Kaye Rogers with 4,285 votes, Daryl Losaw with 3,385 votes, Theresa Rourke with 2,343 votes and Robbi Boone with 2,271 votes.

District 7 incumbent Patrick Cox ran unopposed.

By Claudia Grisales | Wednesday, June 17, 2009, 04:28 PM
UPDATE:
The indictments are against Bennie Fuelberg, Pedernales’ former general manager, and Walter Demond, who works for PEC’s former longtime law firm, their lawyers confirmed.
“Bennie Fuelberg put his heart and soul into PEC for 30 years. He never stole one penny,” said Chris Gunter, Fuelberg’s lawyer.
Gerry Morris, who represents Demond, said there is “no question that they will be here to answer the charges.”
Both lawyers were at the Blanco County Courthouse this afternoon when the indictments were issued.
A Blanco County grand jury today indicted two people on felony charges related to the months-long investigation of past wrongdoing at the Pedernales Electric Cooperative. The Texas Attorney General’s Office said no names would be released until the two people were arrested.
Here’s the Attorney General’s statement: “The Blanco County grand jury has indicted two defendants on felony charges. These are the result of the Office of Attorney General investigation and the unlawful conduct at the Pedernales Electric Cooperative. “The grand jury charged two defendants with three felony charges. Both of them have identical charges.” The charges included misapplication of fiduciary duty in excess of $200,000; theft of property in excess of $200,000 and money laundering between $100,000 and $200,000. The first two charges are first-degree felonies, the statement said. The other is a second-degree felony.

Read the candidates’ bios in the mailer or on the PEC.coop website. Read their answers to the PEC4u.org Steering Committee’s 9 questions, and the Steering Committee’s endorsements. Ask your own questions of them directly or in our Candidates Forum. Inform yourselves, then make your own choices.

But don’t forget to VOTE!

Mail and online voting end June 12.  You can also vote in person at the Annual Meeting, June 20, 2 pm in Johnson city.

Since becoming a board member in July 2008, to fill the unexpired District 7 term, we have achieved meaningful improvements in a short time. The reforms achieved by the PEC are ones that I advocated in my 2008 campaign:

• Reformed the election process by instituting one member-one vote rules, requiring directors to reside within the district represented, balancing membership in director precincts, and eliminating the district advisory director position;

• Ratified new ethical standards, including policies addressing conflicts of interest for directors and key employees, along with whistleblower protections;

• Implemented a landmark open meetings/open records policy that provides access to PEC’s decision-making process, including posting of board meeting materials and video recordings of each meeting on PEC’s web site;

• Reduced the Board’s compensation package by an estimated 40 percent and implemented a sound reimbursable expense policy;

• Approved a long-term wholesale power agreement with the Lower Colorado River Authority that promotes transparency and the sharing of information on costs and rates; and

• Adopted goals that promote energy conservation and the increased use of renewable resources.

Please explain what you see as the proper role of a Director of PEC.

The December 2008 Navigant stated, “The lack of controls and effective Board oversight allowed PEC’s former Senior Management to enter into questionable transactions, receive significant compensation, and operate the Cooperative inefficiently, as well as on a basis contrary to the best interests of the Cooperative’s members.”
The bottom line – the board of directors, whether by intent or neglect, failed in their duties and responsibilities. This has cost the PEC millions of dollars and an immeasurable loss in the confidence of our members. Now, the task of the board of directors is to institute policies, provide direction to management, continue reforms and change in order to restore the viability of the organization and reestablish the trust of the members.

What do you see as the one or two greatest challenges facing PEC in the next year?

Restoring the integrity and viability of the PEC through a revision of the bylaws and adoption of financial reforms and a budget process consistent with best management standards and practices.

There are currently pending two legislative bills in Austin regarding the governance of electric co-ops in Texas. One is known as the Rose/Fraser Bill (HB1390 and SB 921) and the other is the Swinford Bill (HB 3820). The PEC board voted on April 6 to support the Swinford Bill and to oppose the Rose/Fraser Bill. If you had been a Director, how would you have voted and why?

As a member of the board of directors, I voted to support the Rose/Fraser bills and continue to support the goals in this legislation.

Some members have advocated what they call a “Bill of Rights” for PEC members. Basically the idea is to require that certain aspects of governance such as fair elections open to all members, Open Meetings, and Open Records provisions can be changed only by a vote of the members, not by a By-law change adopted by the board of directors. Do you view this as a good idea? Please explain briefly.

Yes. I have stated this in public positions, in my announcement for reelection and will work for a revision of PEC bylaws with the new board of directors. I also worked to pass and adopt the open meetings, open records and other policies intended to restore trust and transparency in the PEC.

What role, if any, do you feel PEC should play in promotion of so-called “distributed generation” of electricity by members (solar panels, wind etc.)?

I have been an advocate of renewable energy initiatives and conservation since the 1990’s. I worked to advance the policy initiatives that established the conservation and renewable goals for the PEC that the board adopted in 2008. The Texas Renewable Energy Industries Association (TREIA) presented me an individual award in November 2008 for efforts involved in renewable energy and also recognized PEC for the adoption of our renewables policy.

Based on the information available to you as a PEC member and candidate for Director, how would you rate the financial condition of PEC – strong, adequate, basically sound with a few problems, precarious, or other description. Please feel free to explain briefly.

The actions of the previous board and management left us with many financial issues that still need to be addressed. Specifically, we should insure that we:

• Develop an Equity Management Plan that will balance the PEC equity and debt;

• Provide a Capital Expenditure Plan to assure the member’s money is spent wisely;

• Bring resolution to the Texland Electric Cooperative, Envision and
other third party transactions that resulted in millions of dollars of
costs to PEC and develop new strategic policies for any outside
agreements;

• Assure that PEC management adopts an appropriate budget process with clear accountability to the Board and members for any variances from that budget;

• Provide accurate financial reporting to the IRS and PEC members and secure new audit services; and

Should PEC adopt term limits for Directors?

Yes, but only after review and input from the members through a public hearing and publication on the PEC web site.

Do you think the cooperative model for electricity distribution service, first adopted in the 1930s, remains a viable model for the 21st Century? Please explain your views briefly.

When the PEC formed in 1938, it endowed in its membership the power to effect change through the electoral process. For the past thirty years, I have been an advocate for responsible leadership and management at the PEC. For many years the election process perpetuated board directors, reinforced existing management, and prevented meaningful member participation. Changes to the electoral processes have once again provided members with an opportunity to participate in their cooperative.

Proving that the cooperative business model remains relevant and viable, our members cast their ballots for change in 2008 — a change in leadership, standards, and practices. We have begun in earnest to address that call for a newer and stronger PEC, and I look forward to working in that endeavor in the coming term.

Patrick Cox, Ph.D
512-217-2279

Please take all discussions to the Candidate Forum.

It would be my hope to restore the trust of the membership with its Cooperative leadership, and to continue to build upon the excellent utility service that has been provided over the years by the PEC.
Please explain what you see as the proper role of a Director of PEC.

Having served on several national, state and local Boards and public bodies, the role of a Director is primarily three things: 1) The creation of its public policy; 2) Public accountability and transparency within the implementation of that policy; and 3) Fudiciary responsibility unto its membership.

What do you see as the one or two greatest challenges facing PEC in the next year?

1) Restoring the public trust which will allow PEC to move forward and build upon its successes; 2) The creation and implementation of renewable energy policies as we face ever rising energy costs and climate change.
There are currently pending two legislative bills in Austin regarding the governance of electric co-ops in Texas. One is known as the Rose/Fraser Bill (HB1390 and SB 921) and the other is the Swinford Bill (HB 3820). The PEC board voted on April 6 to support the Swinford Bill and to oppose the Rose/Fraser Bill. If you had been a Director, how would you have voted and why?

Having read both bills, I would support HB3820. I completely support the public accountability provisions within both bills however I would be opposed to the regulatory oversight of the PUC and favor the consumer protection of the Attorney General. Having worked in a regulatory climate throughout my professional career, I understand the implementation and costs related to such regulation and approval processes. This cost ultimately is passed down to the membership, and in my opinion is generally unnecessary. I believe with real membership protection and participation, and a public accountability within the Co-op’s leadership, the people will govern effectively and efficiently.

Some members have advocated what they call a “Bill of Rights” for PEC members. Basically the idea is to require that certain aspects of governance such as fair elections open to all members, Open Meetings, and Open Records provisions can be changed only by a vote of the members, not by a By-law change adopted by the board of directors. Do you view this as a good idea? Please explain briefly.

I do, and I would support this, because it goes to the heart of what a Cooperative is; open governance and service to a membership body. I do not support the concept of the creation of public policy that will affect the masses being created and implemented by a chosen few when the masses have not been called upon, heard and given due consideration. Just because you are a Board member doesn’t always equate to being right.
What role, if any, do you feel PEC should play in promotion of so-called “distributed generation” of electricity by members (solar panels, wind etc.)?

I believe PEC should be a leader in the research and creation of alternative energy sources, and I would support the funding for such.

Based on the information available to you as a PEC member and candidate for Director, how would you rate the financial condition of PEC – strong, adequate, basically sound with a few problems, precarious, or other description. Please feel free to explain briefly.

At this point, I believe the financial condition is adequate. However, as we have learned, the recent reduction of the bond rating presents some serious caution in moving forward. The Board recently approved a new audit firm which I support. Further, internal auditing practices and effective internal controls could assure financial viability and provide general public and member confidence.
Should PEC adopt term limits for Directors?

Only upon vote by the general membership; again at the very heart of Cooperative purpose and government.
Do you think the cooperative model for electricity distribution service, first adopted in the 1930s, remains a viable model for the 21st Century? Please explain your views briefly.

Sure I do. Cooperatives should be about providing a utility service to its membership in the most effective and efficient manner possible. PEC has a proven record of this very activity. The lack of public accountability which has been its former model does not negate the fact that the membership has been provided with an excellent public utility at a fair price.

Mark Mayfield <mmayfield@txhf.org>

512.755.3024

Please take all discussions to the Candidate Forum.

I want to help keep the reform momentum moving in the right direction. I know it will be challenging, but I have the tenacity to stick with it until the co-op is stabilized, on healthy financial ground, and more responsive to member/owners. I believe I can contribute constructive skills and will work with all board members for the common good of PEC.

Please explain what you see as the proper role of a Director of PEC.

I see a Director’s role as that of a guardian of member/owner interests and a contributor to the board to help establish policy and guidance for co-op management to implement and follow. I believe a Director fairly assesses General Manager performance, ensures good oversight of the financial health of co-op and may advise the General Manager on non-delegated authority areas in concert with the board. A Director maintains open lines of communication with members and is their voice on the board.

What do you see as the one or two greatest challenges facing PEC in the next year?

The number one challenge we face is to get an accurate assessment of the true financial position of the co-op and get expenses under control. Another area would be to asses how much “mission drift” we have and what areas may need to be assessed for consolidation, elimination or other efficiencies.

There are currently pending two legislative bills in Austin regarding the governance of electric co-ops in Texas. One is known as the Rose/Fraser Bill (HB1390 and SB 921) and the other is the Swinford Bill (HB 3820). The PEC board voted on April 6 to support the Swinford Bill and to oppose the Rose/Fraser Bill. If you had been a Director, how would you have voted and why?

I would have supported the Rose/Fraser bill although there are some requirements that I would like to see amended or given further consideration, such as the size standard. I would suggest dropping the size down to around 100,000 to ensure PEC would be included.The bill actually codifies the reforms to date at PEC and gives member/owners the best protections from backsliding by future boards. We now have a very hostile TX Senator/PEC member in our midst due to PEC management position on the bill. I have actively encouraged supporters to support the Fraser bill, and now the Rose companion bill.

Some members have advocated what they call a “Bill of Rights” for PEC members. Basically the idea is to require that certain aspects of governance such as fair elections open to all members, Open Meetings, and Open Records provisions can be changed only by a vote of the members, not by a By-law change adopted by the board of directors. Do you view this as a good idea? Please explain briefly.

I am embracing the concept of Members’ Bill of Rights and think the idea can be developed to seek member participation and define the core elements for protection. I think it is a practical process to encourage member participation again and a great way to re-build the trust that has been trampled.

What role, if any, do you feel PEC should play in promotion of so-called “distributed generation” of electricity by members (solar panels, wind etc.)?

I believe PEC can and should be a promoter and perhaps partner along with LCRA to facilitate and provide incentive programs that encourage use of distributed generation systems. We have the goals, now we need the inertia to move toward them. It’s a step in the right direction.

Based on the information available to you as a PEC member and candidate for Director, how would you rate the financial condition of PEC – strong, adequate, basically sound with a few problems, precarious, or other description. Please feel free to explain briefly.

It appears to me that we may still not know our final true financial position, so I would select a cautious category of TBD – to be determined. Once our new auditors are on board and start digging into things, perhaps they can come up with a preliminary assessment that could be more encouraging. I am concerned with other unknowns that are NOT evidenced in our normal accounting channels. Senator Fraser speaks of possibly $50 million that may have been misused. I am interested in the facts of that view. Also I see little evidence of internal initiatives to address major cost cutting.

Should PEC adopt term limits for Directors?

Yes, I would suggest no longer than 3 terms.

Do you think the cooperative model for electricity distribution service, first adopted in the 1930s, remains a viable model for the 21st Century? Please explain your views briefly.

The co-op model from the 1930’s still makes lots of sense to me. Just like in the REA days, we have sparsely populated service areas where our members need electricity. Private or public for-profit entities would not view those customers as attractive economically. We do have some mixed areas of urban/rural, but the co-op model still serves the common needs of all members. Margins, if any, always go back to the members so the co-op is better suited for our needs as opposed to a stockholder owned entity. We as a co-op, avoid the extra pressure to drive up the bottom line for higher profits for stockholders.

Please take all discussions to the Candidate Forum.