PEC replaces and will investigate former legal counsel

“I am going to use the authority given to me by the Board on this matter to ensure that there is accountability for any potential wrongdoing and uphold fiduciary responsibility to the Cooperative membership.”

-- PEC General Manager Juan Garza

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February 6, 2009

TO: All PEC-area newspapers
MEDIA CONTACT: Anne Harvey, (830) 868-4933; Austin line, (512) 219-2602

Johnson City, Tx – After the discovery of irregular payments to its longtime legal partner, Clark, Thomas & Winters, Pedernales Electric Cooperative is taking expedient action in replacing the firm and investigating the billing irregularities brought to light through an investigation completed in December by Navigant Consulting.

On Jan. 26, the PEC Board of Directors voted unanimously to end the relationship with Clark, Thomas & Winters and authorized PEC General Manager Juan Garza and Interim General Counsel Luis A. Garcia to seek new counsel to represent the Cooperative and investigate the billing issues at Clark, Thomas & Winters.

PEC has announced that the Cooperative has retained Doug Alexander of Alexander DuBose & Townsend LLP from Austin, Texas as legal counsel to replace Clark, Thomas & Winters and represent PEC on the appeal of a settlement in a civil lawsuit.

“It has been our primary focus to replace Clark, Thomas & Winters on all legal matters at the cooperative as quickly as possible,” said Garcia, “and I’m pleased to announce the appointment of Doug Alexander as counsel on the civil case.”

PEC also is finalizing its search to engage legal counsel to conduct an investigation of the irregularities identified in the Navigant Report in regards to payments made by Walter Demond, a lawyer for Clark, Thomas & Winters, while he served as outside General Counsel for the Cooperative. PEC expects to announce this appointment early next week. This counsel also will be developing options for action by PEC to protect the interests of its members and the Cooperative.

“I am going to use the authority given to me by the Board on this matter to ensure that there is accountability for any potential wrongdoing and uphold fiduciary responsibility to the Cooperative membership,” said Garza. “We are determined to expedite a thorough investigation and bring a speedy resolution to this matter.”