4 May 2009
Candidate Response: Patrick Cox
Why do you wish to serve as a Director of PEC?
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.
2009-05-04 ::