Co-op board OKs policy to assess offers
JOHNSON CITY — The Pedernales Electric Cooperative is not for sale, its leaders say — again.
But in case someone makes a play for the largest electric cooperative in the U.S., the utility now has a policy in place to evaluate such offers.
At the co-op’s regular meeting of its board of directors in Johnson City on Monday, board members unanimously approved the co-op’s first “disposition policy,” two years after a New Jersey investor’s inquiry into buying Pedernales was rebuffed.
“The current policy is that we are not for sale,” board member Patrick Cox said. But the utility needed a process to examine whether an unsolicited offer to buy co-op assets should be seriously evaluated, Cox said.
Acting General Manager Luis Garcia stressed that though the board is responsible for determining whether the offer is a qualified one, it is up to the co-op’s 230,000-plus members to decide whether to sell co-op assets. Approval requires a two-thirds vote of members, Garcia said.
In 2008, New Jersey investment firm manager Kurt Holmes floated an offer to buy the co-op for an estimated $300 million. The board rejected the offer from his company, Quentin Capital LLC. Cox said at the time that it was “certainly not anything even worth considering.”
The new policy takes a twophase approach to evaluating such offers, Garcia said. First, it must not interfere with the co-op’s bylaws, must identify all members of the interested parties, and indicate a buyout’s effects on rates, service and benefits to its members.
Reaching the second phase means that it is a “very serious offer,” Garcia said. If it reaches that point, the board can vote to look for additional potential buyers.
Board President Larry Landaker said the policy does not signal that the co-op is for sale.
“It was determined over a period of time that it’s not adequate to simply have a policy that said ‘we’re not for sale,’” Landaker said.
In other co-op news, the board approved salary increases for Garcia and acting general counsel Aisha Nawaz Hagen, who took Garcia’s place as general counsel when he became the interim general manager.
Garcia will receive a $20,000 increase to bump his pay to $238,000 annually, and Hagen will receive an increase of $12,000 to bump her pay to $152,000 annually. The increases will be maintained on a quarter-by-quarter basis until the permanent positions are filled, officials said.