The Buck Stops With Us
Dear Friends and Neighbors:
Recent decisions by the Pedernales Electric Cooperative (PEC) board to elect a member of its old guard as president and maintain its directors’ salaries well above the national median are deeply troubling. These disturbing decisions, coupled with the discovery of a $565,000 secret bank account,continue a pattern of mismanagement and abuse that falls far short of the standard deserved by PEC members and employees.
As the State Representative for PEC’s Johnson City headquarters, and thousands of PEC members and employees, I am committed to ensuring our co-op’s long-term success by ending this pattern of abuse. It has become clear that state government must act – the only way to ensure real change at PEC and to prevent similar events at other Texas electric cooperatives is to pass strong reforms next session.
Legislation requiring all electric cooperatives in Texas to comply with Open Meetings and Open Records statutes is the only guarantee that business practices are transparent and accessible to co-op members. This is a critical component of reform because it creates the environment necessary for local control to truly exist. Communities need the reality of Open Meetings and Open Records in order to ask questions and guarantee real answers that keep boards of directors and management accountable.
Furthermore, the PEC experience has taught us that all Texas co-ops should submit annual audits to the state’s Public Utility Commission for review, limit investments outside their core business of providing electricity, and guarantee fair and democratic elections for the board. Next session,the Texas Legislature must require all four of these critical reforms in statute so that reform is lasting. Strong local control for Texas’ 3 million co-op member-customers is the surest way to prevent fraud and abuse, while guaranteeing the lowest electric rates possible.
As I testified on this matter in Washington D.C. last month, members of Congress questioned our state’s ability to solve this problem. The federal government sees PEC’s questionable business practices as an indicator of similar problems at electric cooperatives nationwide. We must show Congress that the Texas Legislature has the tools it needs to address these problems and that we are committed to necessary reform.
Our message to Congress and to Texas families must be that the buck will stop with us. It is important for co-op members and legislators alike that we fully understand what went wrong with PEC in order to prevent further mismanagement. A financial and governance review by Navigant Consulting, Inc., ordered by State District Judge John Dietz, is ongoing. That report, and any light that it sheds on the events that took place at PEC, must also shape our legislative agenda. Our Texas Legislature is equipped to craft legislation that serves as the foundation for local control, while avoiding the unnecessary costs associated with over-regulation.
On the whole, Texas co-ops are providing their member-customers with excellent electric service at a cost that is considerably lower than the average rate charged by investor-owned utilities in areas such as Dallas, Houston, and South Texas. Publicly-owned utilities bring an important balance to our energy market – it is public power that keeps energy costs affordable for many middle-class families across Texas. Particularly in today’s economy, this is an asset we must protect.
Public power only works, however, when it is transparent. And without transparency, there is no meaningful local control. We can achieve this balance with the right reforms at the state level – let us work together to make Texas an example for other states.
