REC says as­ser­tions sur­round­ing trans­parency, fair­ness are base­less

Lo­cal group un­de­terred, will con­tinue REC re­form ef­forts

Rappahannock News - - NEWS • FROM PAGE ONE - By John Mc­caslin Rap­pa­han­nock News staff

A lawyer for Rap­pa­han­nock Elec­tric Co­op­er­a­tive has sent a 5-page re­sponse to three lo­cal men who re­cently an­nounced the Re­power REC cam­paign “to bring needed re­forms” to the large elec­tric util­ity that serves Rap­pa­han­nock County.

“An elec­tric co­op­er­a­tive is owned by its cus­tomers. If you get your power from REC then you, like us, are a mem­ber-owner of REC. That means you have a right to be kept in­formed of your coop’s af­fairs and have a say in how your co-op is run,” Seth Heald of Rix­eyville, Michael Mur­phy of Bos­ton, and John Levasseur of Fred­er­icks­burg stated in form­ing Re­power REC.

“This is es­pe­cially im­por­tant be­cause REC mem­bers are sup­posed to elect the coop’s board of di­rec­tors, and the board’s de­ci­sions af­fect our pock­et­books. REC's re­cent 40 per­cent in­crease in cus­tomer ‘ac­cess’ fees has in­creased monthly bills for all REC mem­bers’ homes and sig­nif­i­cantly re­al­lo­cated how REC col­lects rev­enues from dif­fer­ent cus­tomers,” the three stated.

“Yet it was de­cided in a closed board meet­ing with lit­tle if any ad­vance co-op­mem­ber in­put and re­view. We be­lieve that sig­nif­i­cant de­ci­sions like these should be made in the open, so all REC mem­bers can see how their board func­tions, and with full mem­ber in­put and over­sight. Democ­racy is, af­ter all, the core prin­ci­ple of the co­op­er­a­tive form of busi­ness own­er­ship, and a democ­racy can’t func­tion with­out trans­parency.”

Writ­ing on be­half of REC’s board of di­rec­tors, in­clud­ing chair­man Christo­pher Shipe, sec­re­tary Linda Gray, and pres­i­dent and CEO Kent Farmer, Charles W. Payne, Jr., of the Fred­er­icks­burg law firm Hirschler Fleischer, an­swers “we re­spec­tively dis­agree with your as­ser­tions that REC's Board is ‘not fair, demo­cratic and trans­par­ent.’ . . . The re­al­ity is REC is the com­plete op­po­site and is one of the most trans­par­ent and demo­cratic com­pa­nies in its in­dus­try.”

The lawyer says be­yond the co-op’s in­de­pen­dent fi­nan­cial au­di­tors and nu­mer­ous on­go­ing dis­clo­sures to the Vir­ginia State Cor­po­ra­tion Com­mis­sion, it com­plies with Ru­ral Util­i­ties Ser­vice stan­dards and pro­vides nu­mer­ous fil­ings to fed­eral agen­cies that in­clude FEMA, OSHA, and the De­part­ment of En­ergy.

“REC's an­nual meet­ing and elec­tion pro­cesses are clearly rep­re­sen­ta­tive of the Co­op­er­a­tive's com­mit­ment to demo­cratic prin­ci­ples, in­clud­ing with­out lim­i­ta­tion (i) en­cour­ag­ing the par­tic­i­pa­tion of all its mem­bers in the an­nual elec­tion process through ex­ten­sive mar­ket­ing and out­reach ef­forts, (ii) es­tab­lish­ing par­tic­i­pa­tion in­cen­tives like door prizes, (iii) pro­vid­ing larger venues in the heav­i­est pop­u­lated ar­eas of REC's ter­ri­tory and (iv) of­fer­ing mem­bers bal­lot­ing op­tions in­clud­ing par­tic­i­pat­ing in per­son or by proxy vot­ing. In ad­di­tion, REC an­nual elec­tions con­sis­tently ex­ceed min­i­mum mem­ber quo­rum re­quire­ments,” Payne writes.

The three men of di­verse back­grounds — Heald spent 34 years as a lawyer with the U.S. De­part­ment of Jus­tice in Wash­ing­ton, D.C. — knew be­fore­hand that their ef­forts would be met with re­sis­tance.

“This won’t be easy,” the group opined in this news­pa­per last month. “We’re deal­ing with an en­trenched REC board that is all too com­fort­able with its gen­er­ous com­pen­sa­tion and the lack of trans­parency that frus­trates gen­uine mem­ber over­sight of the board. That’s why REC’s board has re­sisted even mod­est ef­forts to im­prove trans­parency.”

Re­power REC also held a com­mu­nity fo­rum at the Lit­tle Wash­ing­ton The­atre last month to an­swer ques­tions and en­list sup­port from lo­cal res­i­dents.

Now, in re­sponse to the REC’s let­ter, Heald and Mur­phy tell the Rap­pa­han­nock News: “As you can imag­ine, we were dis­ap­pointed to see that [REC] re­sponded so neg­a­tively to our re­cent at­tempt to bring some mod­est trans­parency and democ­racy re­forms to our elec­tric co­op­er­a­tive.

“When we asked REC’s board to al­low us to gather pe­ti­tion sig­na­tures so we could sub­mit pro­posed by­law amend­ments with com­mon-sense re­forms to get our co-op to do what some other elec­tric co-ops are al­ready do­ing, we were met with com­plete re­sis­tance. Not only is REC’s board not in fa­vor of our re­forms, it claims ab­surdly that we some­how don’t even have a right to put them up for a vote by the co-op’s mem­ber­ship.”

Re­power REC’s pro­posed re­forms are, (1) to make REC board meet­ings open for co-op mem­bers to ob­serve, which could eas­ily be done with on­line ac­cess, (2) to have REC fully dis­close in its mag­a­zine how much our co-op is pay­ing each board mem­ber each year (with money that comes out of our elec­tric bills), and (3) to make the an­nual board­elec­tion ballot more clear, so that REC mem­bers ac­tu­ally know who they’re vot­ing for, and how their ballot will be han­dled.

The co-op’s lawyer wrote that the REC board and its of­fi­cers not only “strongly dis­agree” with Re­power REC’s as­ser­tions, “in our opin­ion, they are based on hearsay, mis­in­ter­pre­ta­tions, and lack of trans­parency as to your true un­der­ly­ing agenda and mo­tives ver­sus good faith pur­suits of the best in­ter­est of the mem­ber­ship.”

Re­power REC says it is un­de­terred in its mis­sion: “The REC board’s ac­tion in try­ing to block our mod­est re­form ef­forts makes us more de­ter­mined than ever.”

Re­power REC: “Not only is REC’s board not in fa­vor of our re­forms, it claims ab­surdly that we some­how don’t even have a right to put them up for a vote by the coop’s mem­ber­ship.”

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