Homer Electric Association ran deregulation up the flagpole back in 2009. The idea of reduced accountability looked good to co-op management. Fortunately most HEA members didn’t agree. We decided to keep Regulatory Commission of Alaska consumer protections.
Now HEA management is back with the same old arguments. What’s different? They’re paying a PR firm $25,000 to $30,000 of our money to sell deregulation to us. The propaganda uses trigger words like “Kenai Peninsula based local control” and “Anchorage based, politically appointed RCA.” It makes unsubstantiated claims and promises based on inappropriate comparisons with unlike utilities.
Why does HEA need regulatory oversight?
It’s a monopoly. Without RCA scrutiny, members would be stuck with any terms HEA mandates. In 2008, Congressman Jim Cooper, D-Tennessee, published an analysis of U.S. electric cooperatives (Harvard Journal on Legislation, Vol. 45) for the House Committee on Energy and Commerce. The following paragraph from it illustrates an important reason to maintain oversight by a neutral third party.
“Co-ops are governed by a board of directors composed of members from each of the co-op’s service areas, elected by the general membership. Co-op board seats are very attractive positions … annual compensation for co-op board members can reach $15,000 to $50,000 [$8,000 maximum for HEA in 2014], depending on the size of the co-op, frequency of meetings, value of health insurance, and attendance at expense-paid state and national conventions. No expertise is required. Co-op board members sometimes display astonishing ignorance of co-op business but are insulated from liability for their decisions due to the co-op’s not-for-profit status. …The ability of co-op employees to control these board seats — and, through the directors, the co-op — has made employees much more influential than the co-op’s apathetic membership. Co-op managers and employees have often become the de facto owners of the co-op.”
Between 2009 and 2013 I attended almost every HEA board meeting open to regular members and saw examples of this happening. I only recall two occasions when the HEA board voted down a significant proposal from the general manager.
While we had some fine folks serving on the HEA board, decisions were based primarily on background information provided by management reflecting only its point of view. Regular HEA members rarely came to board meetings with their thoughts and the board was rarely sympathetic to their suggestions or complaints when they did.
The HEA board is not a neutral third party. It represents HEA’s corporate interests. If management and board disregard your plea, you can appeal to the RCA at no cost. With deregulation, Superior Court would become your only option for appeal. How many HEA members can afford the time, money, and emotional energy required for a court challenge?
Vote against so-called local control.
Mike O’Meara is the spokesman for the HEA Members Forum, an ad hoc group of approximately 300 Homer Electric Association members who support efforts to adopt clean, affordable and sustainable alternatives to fossil fuels.