A rift over legislation aimed at making rural electric association (REA) board elections more transparent and fair for challengers has in part spurred one co-op to part ways with the statewide association representing Colorado’s 21 REAs.
The general manager of the Delta-Montrose Electric Association (DMEA) on Colorado’s Western Slope announced last month the co-op was pulling out of the Colorado Rural Electric Association as of April 30, citing an “unfortunate pattern of [CREA] opposing most electric industry initiatives that come before the Legislature.”
Pressed for specifics, DMEA general manager Dan McClendon said Monday the split has been a long time coming but came to a head with the introduction by state Rep. Claire Levy, D-Boulder, of the REA board election transparency bill on Jan. 14.
“The DMEA over the last 20 years or so ran through some very tough times on that very issue [election transparency] and we have grown and learned through that process to this day,” McClendon said. “We try to be open and provide all the information that all of our members want at any time.”
Fair elections as oversight
House Bill 1098, which passed by a 34-28 vote on third reading in the House Monday and now heads to the Senate, would mandate co-ops adopt and post an election policy online, give advance notice of election dates and ballot mailings and reveal campaign contributions by co-op employees.
Electric co-ops were first set up in the 1930s as nonprofit corporations controlled by member-customers to help provide electricity in rural areas where for-profit, investor-owned utilities in urban areas refused to expand because of low profit margins.
REAs are therefore largely exempt from oversight by the Colorado Public Utilities Commission, which regulates investor-owned utilities such as Xcel Energy, but that means co-op member-owners are in charge of electing directors who then hire staff.
In recent years, green candidates advocating for more renewable energy and efficiency programs have run afoul of longtime board members wanting to invest in traditional (and cheaper) fuel sources such as coal and natural gas.
“We have 21 different load profiles and 21 different opinions on how things should be done, and we operate on a very democratic process,” said CREA government relations director Geoffrey Hier, whose membership will shrink to 20 with the departure of DMEA.
“It’s one member, one vote. We have full, open discussion of issues; everyone can put their input in; and generally speaking there’s more consensus building than what I see down at the capital, where it’s very polarized.”
Hier says the CREA consensus on Levy’s initial bill was that it went too far and needed amending before the organization could support it. Those changes were made, and now the CREA endorses the version the Senate will begin considering in committee.
But McClendon says only slight tweaks were necessary and that the CREA often is viewed as obstructionist on any sort of reform legislation – not just refusing to endorse but also failing to promote legislation or offer its own agenda for moving forward in the 21st century.
“Over a period of time [our board] felt CREA has more or less had a negative approach to various energy issues in the past – renewable and efficiency, they’ve opposed a lot of those things,” McClendon said.
“There have been bills in the past that CREA didn’t get onboard until the wee hours at the end, and it drug some of that process down and we just feel, looking at the future with things that need to come on, that we wanted to be free to work with legislators to do things that we feel are right for our members.”
Several years ago, the Intermountain Rural Electric Association – the state’s largest co-op with more than 140,000 members on the Front Range – dropped out of the CREA for almost the exact opposite reason.
The IREA, with a majority of board members who feel global climate change is being overstated and that Gov. Bill Ritter’s “New Energy Economy” is needlessly driving up electricity prices, was at odds with the CREA for not opposing renewable and efficiency measure aggressively enough.
Dues and diversity
The IREA’s election policies, which green challengers alleged backed the fossil-fuel-favoring incumbents, in part led to the push for the current REA transparency bill. Opponents felt employees hired by the board were working to keep challengers at a disadvantage through a variety of questionable board election practices last April.
When the IREA pulled out, McClendon says, the other co-ops were forced to pay higher dues to compensate for the budget shortfall caused by the departure of the state’s largest REA – increasing for DMEA from around $40,000 a year to $56,000 a year.
“That allocation has gone up significantly for us recently, particularly in light of Intermountain Rural Electric leaving, and that left a huge hole in [CREA] revenue and we voiced last year that the budget should be very closely looked at,” McClendon said. “Our feeling was it wasn’t looked at as closely as it needed to be.”
Hier disputes that notion, pointing to a board subcommittee that examines the budget and offers recommendations to the board, which ultimately determines the final figure. “We give our members a very good value for their dues,” he said. “We are a membership-based organization; the dues fund the organization.”
Again, he said it’s difficult to make such a diverse membership happy all the time.
“We have some co-ops that the bulk of their load is agriculture, irrigation; we have members that are very residential-based and we have members that are very industrial-based, and we have to find the commonality for all those members,” Hier said.