Once Derided PEC Subsidiary Envision Moving To Texas

By Linda Kaye Rogers

Much has been said about the money loosing subsidiary ENVISION. Now it appears that the perceptions and past reports may be inaccurate, or at least only partially disclosed.

Envision Utility Software Corporation was founded by Cooperative Services, Inc of New Mexico. PEC became its first customer in 1986. In 1990 PEC purchased 50% ownership. In 1995 another 25% was acquired and in 2002, PEC purchased the remaining 25% , making it a totally owned subsidiary of PEC at a cost of $1,016,364 plus $53,336 of the seller’s liabilities assumed. Total price tag: $1,069,700. Austin Energy has just purchased a new software program for $30,000,000. Things look better already.

PEC is Envision’s largest customer with only 1.2% of revenues generated by other customers. Envision provides all the software for operations of PEC, including the computerized billing, outage tracking, and such tasks as figuring members’ capital credits.

Envision is still located in New Mexico and three of the PEC Board members sit on its Board (at no compensation). The two additional Board Directors receive $750 per meeting and no Director receives any benefits from Envision.

So why is Envision costing us so much money? It really isn’t. The problem lies in the Generally Accepted Accounting Practice (GAAP) that requires the financial report of a wholly owned subsidiary to be shown on the parent report. The operational costs and the annual expenses of Envision are about $6,160,000. Outside revenues are about $106,500.

Up front this looks like a $6 million loss per year, but here’s the catch: PEC pays nothing for the services rendered by Envision. These services are necessary and the charges range anywhere from $1.04 to $1.75 per transaction. The service cost from Envision is about $1.40 per transaction. Envision shows a cost of services to PEC, but PEC doesn’t pay, so a loss is reflected. While Envision certainly is not making money by providing services and charging other companies, and there may even be a loss, it is not actually losing $6 million a year.

In order to rectify the false perception of a huge annual loss, and the additional costs of having Envision in New Mexico, GM Juan Garza plans to move the operations to Texas and fold the whole operation into PEC. It would then be a department like any other in PEC that is part of the operations of the co-op.
The full capabilities of Envision are yet to be maximized, making it a viable system for some time into the future.

Linda Kaye Rogers grew up on a small family farm in the Rio Grande Valley. She received her BA and Masters of Science in Social Work from UT Arlington. She has taught smoking cessation, communication skills, stress management and parenting in hospitals, corporations, community groups and churches. Linda Kaye moved to Wimberley in 2000 where she built a straw-bale cottage and immediately established a rainwater collection system as her water supply. That same year she began volunteering at the Katherine Anne Porter School and has worked in various capacities at the school. She is an avid organic gardener, animal lover, conservationist, and environmentalist. In 2005 she spearheaded efforts to defeat a road bond that would have benefited a developer and cost Woodcreek North residents a dramatic and 20-year tax increase. Linda Kaye is a member of PEC4u, the group of PEC members who initiated the investigation of PEC Board governance and practice.