PSC cracking down on electric co-ops
Nine out of 10 rural homes in this country were without electric service in the mid-1930s. President Franklin D. Roosevelt decided when he was elected in 1933 that something had to be done to serve the underserved.
The end result was the Rural Electrification Administration’s creation of cooperatives (co-ops) to provide those electric services. Co-ops are nonprofits that are owned by the members who buy the electricity.
Traditional electric companies call their members customers, and that is where the state Public Service Commission has concentrated most of its regulations. So those who run the co-ops have pretty much done their own things for years.
The Advocate reported that members of the PSC were surprised when they learned co-op board members were compensated. They found out when two cooperatives wanted to charge their customers more on monthly electric bills. They learned that much of their “operating margin” revenues was spent on perks for the board members.
The co-ops’ 96 board members aren’t legally allowed to receive a salary, but in 2017 alone, they were compensated. The average was $26,250 but some directors made $50,000 or more.
Members of the PSC have decided it’s time to put a halt to what they call lavish perks. The PSC said the boards that run the co-ops have health insurance coverage and have engaged in extravagant travel.
New rules being formulated by the PSC will forbid co-ops from providing board members with health and life insurance, cap per diem at $200 a day and set term limits. Some directors were elected at meetings when only a few members attended.
The PSC will require that 5 percent of the members must be present at election meetings. If attendance doesn’t reach that level for three consecutive sessions, or three in five years, then votes for new directors will have to be taken by mail.
PSC Commissioner Foster Campbell said, “We’re coming up with a whole package: term limits for board members, complete transparency on finances, a new way of electing them.”
He said, “We don’t need them flying all over the country, to Las Vegas, for conferences and seminars.”
Co-op board members haven’t responded to the PSC’s plans. We hope they do because the members they serve deserve to be told about their reaction to the complaints being lodged by members of the PSC.