PEC Not Following Spirit of 'One Member, One Vote' Rule

By Linda Kaye Rogers

It seems our wonderful electric co-op, PEC, just can’t quite go along with the standards of practice of all other electric co-ops. Nope, we have to continue on the fringe and over the edge in our approaches to governance and co-op behavior.

So what is it now? Multiple meter memberships.

The IRS code for tax exemption status for 501c(12) calls for democratic control and defines that control as “one member: one vote." In the decision of Puget Sound vs Plywood, it was stated that there must be democratic control. The concept was that weight and votes not be tied to patronage capital or equity. What was not clearly stated was that one membership is ONE body/entity. So, how does PEC handle this? PEC charges a membership fee for every meter and then every “membership” gets a vote. (How they separate that from patronage capital and equity is another question). So PEC seems to be within the law, but certainly outside the intent or the spirit of the law. And they may be riding a very fine line on the legality of it.

Contact with the National Rural Electric Cooperative of America (NRECA) confirms that PEC is the ONLY cooperative who has this practice. In fact, some cooperatives are very explicit in their definition of one member: one vote, stating no single member may have more than one membership or one vote, regardless of number of meters.

So why is this important? Because MEMBERS own the coop – equally. But if some members have more than one vote, they have more control. And there are some members who have a LOT of control, which means we are outside the parameters of “democratic control."

In late May it came to light that while PEC has 222,524 “member(ships)” it has only 203,592 “customer/owners.” It has 18,932 commercial meters with 47 single member/entities having 99 or more meters/votes. These “members” are primarily developers, governments, utilities, schools, and multi-family housing. It has been speculated that Time Warner Cable is the largest entity with about 1,700 meters/votes. While there are hundreds of members who have small businesses, ranches with separate meters for wells and barns, etc., the “47” are clearly large businesses. Decisions made for business may not hold the best interests of individual members, and vice-versa. But, single-meter members are the meat and potatoes of the co-op!

So let’s look at how this plays out in a voting situation. PEC will conclude its first ever “democratic” election of board directors on Saturday, June 21. As of June 18, there were 22,247 BALLOTS returned, but there were 30,284 VOTES cast. That would be 8,037 votes that have come from multi-meter memberships – roughly 30 percent of the votes. Right now we have no way of knowing if MANY of the smaller meter holders returned ballots, or if just a handful of the BIG meter holders are controlling the vote. Either way, to my thinking, we have a problem.

This is not Democracy in action. Clearly, there is still much clean-up to be done in the house of PEC.

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.