Category Archives: Announcements

PEC member and energy industry professional Rick Thomas speaks against PEC deregulation

electricpoleIn a recent letter to my opponent, PEC member and Lakeway resident Rick Thomas made a great point against deregulation through well-rounded authoritative research. Mr. Thomas is an energy industry professional and is experienced in co-op management.

Mr. Thomas has provided me with a copy of his letter and has authorized me to repost its points to my Website and share its value with friends,  neighbors and supporters.

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Here are the main points:

Point #1 — It is questionable whether the proposed retail rates include all applicable charges, therefore they do not make an accurate comparative schedule with PEC’s current rates.

Mr Thomas: “First, from the comparative schedule of energy prices from November 2014 (source unknown) I see that the Competitive Zone REP price is 7.8 cents. What I can’t discern is whether  the source author has included the TDU charges. If TDU charges are not included, then the schedule would seem to not be a valid comparison since I believe the other utilities’ rate would be the “all in” cost. […] In a quick web site review, I found over 20 competitive offers for eligible Texans, with an energy price ranging from 8.5 cents per kWh to almost 15 cents per kWh, all with varying terms and conditions — which can be confusing. I believe the TDU charges of approximately 3 cents would then be added for a sum total of 11.5 cents to 18 cents per kWh respectively. I even found one quote that encourages more kWh usage rather than less..the more the purchaser uses, the lower the cost. That seems counter-current to energy conservation but I guess that is the market at work. Also, I question whether the rate comparisons of cooperatives vs munis were adjusted for member density and load characteristics. Those factors can affect a comparison substantially; in my opinion much more study is warranted and necessary in such an important matter as the discussion of deregulation of PEC. It seems imperative to me that all members of PEC must understand the potential outcomes of retail competition, which fundamentally shifts the risks of the electricity market/power supply from the cooperative as a group ( the reason cooperatives were formed in the first place) to the individual member.

Point #2 — Most members have no desire to shop for retail energy sources and retail choice produces marginal results at best.

Mr Thomas: “Secondly, from my personal standpoint, my PEC electric rate is approximately 11 cents per kWh, and given the high level of service and reliability the PEC provides, I have absolutely no desire to shop for other energy sources. Interestingly, after a number of years in the electric industry myself, I had discovered little solid empirical evidence that, over the long term, deregulation at the retail level has resulted in lower rates , particularly to cooperative members. Moreover, I found most electric cooperative residential members were not interested in shopping for alternative sources of energy; however, commercial and industrial customers would likely shop. Perhaps all that has changed over the last couple of years. I think the members understand that their cooperative’s sole mission is to provide dependable and reliable service at reasonable costs. They expect to choose a Board of Directors that will work together to make good policy decisions and ” look out for the members’ interest”. 

Point #3 —The elimination of all travel and on-site training for directors would have absolutely no impact on rates.

Mr Thomas: “The example of director travel restrictions, etc. seems very small in relation to the bigger PEC cost picture. Perhaps we should continue to focus on other cost items such as long term power supply , renewable energy requirements, transmission congestion issues, and a national energy policy. I suggest the ongoing PEC Director vs Cooperative lawsuit ( Austin American- Statesman, May 6, 2015) could likely create more unnecessary legal/staff expense than all directors’ travel expense for a year, and best I can read, with no real member benefits resulting from the dispute. In my opinion, as a matter of principle, the lawsuit of this nature is unnecessary, unwarranted and wasteful of cooperative resources.”

Rick Thomas, Lakeway, TX

FRIENDS OF PEC TO MEMBERS: Corporate and Political Interests Attempt to Sway Pedernales Electric Co-op Directors Election

The-Future-Of-ElectricityPolitical groups and energy company affiliates are actively interfering in the director elections for the Pedernales Electric Cooperative, a non-partisan group known as Friends of PEC charged today.

“Running our billion dollar co-op should be about good business, good service, and low rates – not about partisan gamesmanship, and certainly not about giving control to any political party,” said Friends of PEC chairwoman Shirley Beck.

Friends of PEC said it has obtained evidence that private energy company executives from Houston and Midland are trying to influence the outcome of the PEC elections, and appear to be spending tens of thousands of dollars to elect certain candidates.

In addition, the group charges that highly partisan Republicans are bringing an unhealthy political focus to heretofore non-partisan PEC elections – one example being a county Republican Party Resolution offering a partisan litmus test for the election, and endorsing a slate of candidates.

Recent postcards sent to members tout a slate of “conservative” candidates Paul Graf (Dist. 6) and Amy Akers (Dist. 7). The postcards are from Texans for Affordable Electric Rates, a project of the American Reform Coalition, which claims to support consumer education, economic health, and the “overall wellbeing of the American family.”

A look at their websites reveals that these groups don’t appear to be doing anything other than trying to influence the PEC election. The president of the board of directors, John Michael Wilshusen, is also president of an energy consulting company that operates in Dallas and Midland. The secretary of the board is Alan Morgan, vice president of Remora Oil Company, based out of The Woodlands.

Why would these corporate interests bankroll PEC Board of Directors candidates? Generally, candidate Jeff Barton and incumbents Cristi Clement and Larry Landaker have campaigned for diversifying the co-op’s energy sources, and to take advantage of record breaking low current pricing of Texas-based solar and wind technologies.

Another organization, called Texans for Low Cost Power (TFLCP) is promoting Mark Axford (Dist 1), Paul Graf (Dist. 6) and Doug Kadjar (Dist. 7). Kadjar is an officer of the Hays Constitutional Republicans, and Axford’s wife, Trixie Bond, is a Republican precinct chair. TFLPC seems to be a vehicle for tea party and libertarian activists on the right wing of the Republican Party who argue that PEC directors should be elected based on their commitment to the Party and a commitment to abandon the co-op in favor of for-profit retailers.

If customers want lower rates, deregulation isn’t the answer. The Nueces County Electric Cooperative is the sole example of a deregulated electrical co-op in Texas and both its rates and those of newly introduced for-profit retailers are higher than those at PEC. Nueces County charges about $142 for 1,000 kilowatt hours, compared to only $116 for the same amount of energy from the PEC.

Friends of PEC, an officially registered not-for-profit, non-partisan organization, has endorsed Barton and incumbents Cristi Clement and Larry Landaker. The Friends of PEC board is made up entirely of longtime co-op members.

“We sent each candidate a questionnaire, invited every candidate to respond, and we’ve even published the responses of the candidates we endorsed on our website (http://friendsofpec.org/our-candidates/questionnaire-responses/), so everyone can see for themselves their qualifications and their positions,” Beck said. “We don’t ask candidates what political party they identify with, and we don’t care. In fact, we are actively against ‘Washington style’ partisan campaigning.”

Clean Water Action also endorsed candidates based on written candidate questionnaires, which all candidates were invited to submit. The questions focus on the PEC’s programs for energy efficiency and renewable energy, and on the water-energy nexus. Unlike wind and solar, coal and gas-fired power plants require enormous amounts of water to function. The questionnaire and answers received can be found on its web page: http://cleanwater.org/feature/vote-now-pec-election.

TOM SMITH: When it comes to the PEC, don’t mess with success

By Tom “Smitty” Smith — Smith is a Pedernales Electric Cooperative member who has advocated for open governance, lower rates and cleaner energy at the co-op for seven years.

The-Future-Of-ElectricitySince 2007, the Pedernales Electric Cooperative (PEC) has launched multiple reforms with stunning results. Along with purging corrupt leaders — including two top executives convicted on criminal charges — the reformed PEC has significantly lowered customer bills. In May, the average bill will be 9 percent lower than it was 10 years ago. More than $65 million in capital credits has been returned to member customers. Changes in bylaws have codified members’ rights and provided them with new opportunities to participate in the co-op’s decision-making.

Yet, some candidates for the board are determined to mess with success. Some candidates would deregulate the PEC, claiming deregulation would lead to lower bills for customers.

In 60 percent of Texas, electricity markets are deregulated. But it’s far from clear that being able to “shop for power” actually benefits consumers.

First, retail electric providers (REPs) are designed to maximize long-term profits for shareholders and executives, not minimize customer bills, which is one of the fundamental operating principals of electric cooperatives.

Second, in order to attract customers in a deregulated market, retail electric providers use highly aggressive, sometimes deceptive sales tactics. If you look hard enough in deregulated markets, you can find deals with lower rates. Those include bait-and-switch strategies, which lure customers into short-term deals that have hidden long-term fees, like minimum usage charges and early termination costs.

Nueces County Electric Cooperative is the sole example of a deregulated electrical co-op in Texas. It charges about $142 for 1,000 kilowatt-hours, significantly more than the PEC, which charges $116 for the same amount of energy. According to the Nueces County Electric Co-op website, the lowest rate offered in the area is $123 per 1,000 kilowatt-hours — far above the PEC’s rate.

This legislative session marks the fourth time Texas legislators have tried to force the PEC to form single-member districts for electing directors, instead of allowing at-larger voting to continue. Some candidates for the board endorse this approach. In fact, the debate has been ongoing within the PEC’s board for five years; the board has done studies of the impact that changing the process would have and asked its members to vote on whether to change it – twice. Both times, co-op members voted no.

Why? Because under a single-member system, the board would be hugely Austin-centric, since the vast majority of co-op members live in or near Austin. Meanwhile, rural members would have virtually no voice. With the current at-large, direct democratic vote, every board member has to think about how their decisions will affect all voting co-op members, including those from rural districts.

The PEC story shows how well member-controlled utilities can work. In the last seven years, the PEC has regained control of the board and management. The PEC has audited itself and eliminated huge executive salaries, hidden bonuses and board member perks. Meanwhile, it has also managed to reduce rates three times.

Through webcast meetings, the PEC has opened up its governance to scrutiny from all of its members. The PEC has adopted a bill of rights for all members and conducted a survey to find out how members want the co-op to operate in the future.

What’s next for the PEC? Plan for growth; buy or contract for new sources of electricity; plan for drought; develop new rates; educate members on how to save energy and money; and develop a new business model that allows the co-op to pay its bills even while consumption declines with increased energy efficiency.

At the moment, three of the PEC’s seven board seats are up for re-election. Now is the time to review the candidates’ positions and vote for whoever will lower average bills, fairly represent rural and urban members, and plan for a more energy-efficient and less water-intensive future.

Smith is a Pedernales Electric Cooperative member who has advocated for open governance, lower rates and cleaner energy at the co-op for seven years.

IMPORTANT: Former Travis County Commissioner Karen Huber endorses Cristi Clement (District 1) and Larry Landaker (District 6)

karenhuberphotoDear Friends,

As you consider your vote for Pedernales Electric Cooperative’s (PEC) Board election, please note there are pivotal issues to consider. Since I was involved at the earliest stages of reform efforts for PEC and have followed closely its continuous improvement, I wanted to share my thoughts with you.

When the new PEC Board took over in 2009, after the Fuelberg era, much needed to happen. PEC had never given its members “capital credits.” It had refused to embrace renewable energy. Its Board election process and governance lacked transparency and was rife with financial abuse. It had numerous questionable contracts. In general, PEC was a mess.

Christi Clement and Larry Landaker are two of the new era Board members (both up for re-election) who successfully guided PEC into a responsible organization. Under their leadership, PEC now has a budget (yes that’s correct!), internal audits, policies for open meetings/open records/open elections, a Whistleblower program, Energy Efficiency and Renewable Energy goals, a Strategic Plan, a Directors’ Code of Conduct and an Ethics policy. None of these existed before this new era board.

They also established PEC’s first, ever, recurring distribution of capital credits – about $70M since 2009 – back to members and have increased member equity from a low 17% to a healthier range of 35% to 42%.

Major reforms take time but Clement and Landaker have been key players in accelerating the speed and effectiveness of these reforms. PEC is now reaping the benefits for its #1 priority — lowering of rates. Worth noting are three rate reductions in the past year, alone – all while maintaining a service-reliability rating among the highest in the nation.

Some candidates want open choice for PEC customers – meaning freedom to choose between purchasing electricity from PEC or from an investor owned utility (IOU). I have consulted with utilities including analyses of performance criteria and I will take a cooperative any day over an IOU. As co-op members, we own our utility and can make desired changes, as demonstrated in the ousting of the previous regime. IOUs are publicly owned companies that must respond to investor profit demands rather than ratepayer demands. Co-ops offer members local control and that’s critically important. While an IOU can manage its rates to attract new customers, evidence exists that over time, both their rates and reliability offer no advantages over a well run cooperative and in many cases do not perform as well. PEC is at risk of instability if we elect board members who want to allow co-op members such choices.

So, I’m voting for Cristi Clement (District 1) and Larry Landaker (District 6). Both believe in cooperatives and have extremely important knowledge bases about utility operations. They have gained back member trust for PEC by virtue of a superior record of accomplishments. They are progressive and innovative. Clement and Landaker are already winners, doing a stellar job. No changes are needed here! I hope you will consider joining me in supporting them.

Information on all candidates is available at www.pec.coop.

Karen Huber

Former Travis County Commissioner, Pct. 3

Protect your co-op. Now is the time to take action and vote.

The ballots are in the mail. Yours may come today or tomorrow.

NOW IS THE TIME TO TAKE ACTION AND VOTE!

clement2014-300dpiThis is a critical election.  This year the destiny of PEC is in your hands. Our opposition is promising lower rates and there’s nothing new about that. But their proposed path to lower rates is immediate deregulation or “customer choice”.

This essentially is a high risk route to dissolve PEC and hand members over to profit-hungry Retail Energy Providers (REP). Under this plan, you have to find your own energy. 

REPs are businesses skilled at deceptive and confusing sales tactics.  Their goal is to maximize long-term profits for their shareholders. PEC is non-profit and member-owned. Do not hand over your co-op and your interest to big businesses who do not put you first.

Going into a competitive retail electric market in PEC service territory is NOT A SOLUTION to lower rates.  The single co-op that has entered into “choice” now has higher rates ($144 for 1000kWh) when compared to PEC at ($116.20).

“Choice” HAS NOT WORKED THUS FAR in rural territories… but Co-ops do.  That is the reason why PEC was formed in the first place.

Moving to “choice” would be sacrificing long-term stable and competitive PEC retail prices under our LCRA contract. Electric rates in a competitive market are subject to extreme volatility as they are connected to the rise and fall of natural gas.  Natural gas prices WILL rise. At such time, members will appreciate the stability that our wholesale power agreement provides. 

Our contract also allows us to purchase on the competitive market and we already use that feature when pricing is advantageous.  We do not have all of our eggs in one energy basket and are working to diversify further .

TRANSFORMATION IS WORKING WELL FOR ALL OF US. TOGETHER, WE HAVE COME FAR.LET’S NOT MESS WITH SUCCESS AND KEEP IT UP THE GOOD WORK.

  • We have lowered rates three times since 2014—our rates are now 9% lower than they were 10 years ago!
  • More than $68 million in capital credits have been paid back to our members. 
  • PEC rates are slightly lower than the “average” residential rate according to Public Utility Commission, January 2015 data.  But we want to lower our rates more, while not sacrificing reliability or safety or customer service. We are focused on achieving that soon.

PEC is a source of pride to our members and a role model for other electric cooperatives across the country.  Let’s keep our co-op autonomous!

THANK YOU FOR YOUR SUPPORT AND CONTINUED TRUST. TODAY, RE-ELECT CRISTI CLEMENT AS PEC DISTRICT 1 DIRECTOR.

District 1 candidate forum set for 7 p.m. on May 20 at Quail Point Lodge

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As ballots get to PEC members’ maiboxes, the HSB POA has joined with local Republican groups to organize a full-on candidate forum. This is an important event. It is a chance to test each candidate’s knowledge, abilities and vision for PEC.

I look forward to meeting everyone and reaffirming my plan for PEC’s future. Let’s outline how we can move forward by building on our current successes.  We have worked hard at rebuilding PEC and we have kept our promises.

PEC must remain an autonomous co-op and a desirable workplace. Moving forward, we have to remain focused on delivering reliable power at the best possible rates, while keeping our co-op strong and free of conflicts of interests.

The floor will be open for questions about current issues and plans:

  • Electricity rates
  • PEC policies and strategies for the future
  • PEC’s energy portfolio
  • Board governance and by-laws
  • PEC public giving
  • Member representation.

Thank you for your continued support.
Together, let’s keep PEC moving forward.

  • When: 7:00 PM, Wednesday, May 20th
  • Where: Quail Point Lodge
  • (107 Twilight Lane, Horseshoe Bay, TX 78657)

SAVE THE DATE: PEC invites members to April 23 candidate forum

Pedernales Electric Cooperative is inviting members to a forum to learn more about this year’s PEC Board of Directors candidates. The forum will be held Thursday, April 23, at 5:30 p.m. at PEC headquarters, 201 S. Ave. F in Johnson City.

PEC plans to announce the official slate of candidates running for the Co-op’s Board on April 21. At the April 23 forum, each Board candidate will be given several minutes to present their views, and will take questions in a moderated format.

Ballots will be mailed so members begin receiving them by May 21, after which members will be able to vote by mail or online through June 12, or they may vote in person at PEC’s annual meeting June 20 in Cedar Park. Election results will be announced before the conclusion of the meeting.

Video of the candidate forum will be posted online at www.pec.coop/election, where members may also find additional details about the Co-op’s election.

See you there!

MOVING FORWARD: PEC board approves new, expansive renewable energy plan

(Reposted from pec.coop)

Pedernales Electric Cooperative’s Board of Directors adopted at its March meeting a strategy for the development of several new renewable energy programs.

“This resolution is a key step in responding to our members’ desire for reliable and renewable energy solutions,” said PEC Board President Dr. Patrick Cox. “PEC management will launch a series of cost-effective efforts that will ensure stable, secure and responsible power for our growing cooperative.”

“Our objective is to further the Cooperative’s ability to serve its individual member’s needs in the area of renewable energy,” said PEC Chief Executive Officer John Hewa. “We are working on the development of cost-effective programs that will be available to both our residential and commercial members.

“With the beneficial pricing trends of photovoltaics,” Hewa added, “the Co-op grid is becoming more distributed, and the cooperative business model has an opportunity to evolve to support member interest in distributed generation.

news_pec-solar-home“We hear from members who are renewable enthusiasts, and we also hear from members who are concerned about subsidy. Our programs are being designed to satisfy both groups.”

The newly adopted strategy directs Cooperative management to begin development of a broad range of programs to help PEC reach its renewable goal and also respond to member requests:

  • The implementation of a distributed renewable generation program, including community solar projects available for member subscription and the development of commercial-scale arrays
  • On-bill financing to provide convenient access to low-interest rates to residential and commercial members deploying distributed generation systems
  • Encouragement by PEC of its primary power supplier, the Lower Colorado River Authority (LCRA), to continue to diversify its energy portfolio by providing cost-beneficial wholesale wind and solar resources

“We’re on the threshold of history at PEC,” said District 6 Director Larry Landaker just before the vote took place. “Passage of this landmark resolution moves PEC significantly forward in the attainment of its stated and reaffirmed renewable energy goals.”

PEC management will begin working immediately to develop unique programs for Board consideration. In pursuing the Cooperative’s renewable goal, management is seeking cost-effective methods and analyzing how recent, more competitive pricing in both wind and solar production could be passed along to members. PEC is pursuing its renewable energy goals in balance with other corporate goals, which include maintaining outstanding reliability and member service and becoming the lowest cost cooperative that purchases power from the LCRA.

“The PEC Board’s resolution to implement a variety of solar energy projects and on-bill financing is a clear sign that the Co-op has heard its members and understands the changing landscape of energy generation,” said Lucy Stolzenburg, Executive Director of the Texas Solar Energy Society.

CAPITOL WATCH: Rep. Tony Dale filed 2 bills to change PEC to single-member district elections

HERE WE GO AGAIN! REP. TONY DALE FILED 2 BILLS TO CHANGE PEC TO SINGLE-MEMBER DISTRICT ELECTIONS.  EFFECTIVE DATE SEPTEMBER 1, 2015.

But, the PEC Board passed a resolution on March 17 to OPPOSE HBs 3391 and 5431. The bills would radically change and destabilize PEC. Click here to download the resolution.

The resolution passed with a 5-2 vote. Directors Emily Pataki and James Oakley voted NO.

The main lines are:
  • Under HB 5431, PEC current directors would be terminated as of November 2015.
  • The seven directors would have to campaign for re-election within newly-defined district lines.
  • Under the new rules, redistricting would be required to give each director an equal number of members from whom to seek election. Members would no longer vote at-large. Rather, they would be limited to vote in their district of residence and would vote only once every four years.
  • Runoff elections would be needed if no outright majority is won in the first round.
  • Elections would be held no later than Nov. 30.
  • Director terms would change from three years to four years without term limits.
  • Directors’ new terms would begin Jan. 31, 2016.

If this looks familiar, it’s because you’ve already voted on this issue twice: once in 2011 and again in 2014. Each time, single-member district elections were voted down, but no one seems to want to hear it.

I voted to oppose both bills. Such legislation would undermine and usurp member control. They are an unprecedented and unwarranted overreach into a private, member-owned cooperative. 

These bills can both affect PEC members because:

  • They constitute a potential adverse action that could destabilize and potentially downgrade PEC’s financial rating.
  • They could harm member/owner investment and could damage PEC’s business reputation. They would introduce absolute chaos. Chaos is unnecessary and harmful to PEC.

Earlier in 2014, I opposed the release of your voter records to PEC board candidates. I am a tireless advocate of openness and member privacy. I need your help to protect your rights as members.

Bill sponsors include: Rep. Tony Dale, Rep. Doug Miller, Rep. Andrew Murr, Rep. Paul Workman and Rep. Marsha Varney. You may contact any of these representatives at  www.house.state.tx.us

 

PEC FRIENDS AND SUPPORTERS: I am announcing my candidacy for re-election to the Pedernales Electric (PEC) Board of Directors

     I am honored to have served you as PEC Board Director for District 1 since 2009.  District 1 includes almost all of Burnet County, plus small portions of Lampasas, Williamson and Travis counties. Like all Directors, I must be elected at-large. Although I represent District 1, I stand dedicated to serve the entire membership’s best interests.

I have served as your Board President, Vice-President and currently as your Board Secretary/Treasurer. This Board has been busy during these challenging and difficult 6 years. And together, thanks to your support, PEC has made historic reform to stabilize the cooperative.  I BELIEVE PEC IS STILL A WORK IN PROGRESS. 

I am running for re-election as your PEC Director so I may continue to work on your behalf. Please engage with me now as I will need your help to prevail and continue the reforms.

TOGETHER, LET’S KEEP CONSTRUCTIVE CHANGE GOING! TODAY, I AM ASKING FOR YOUR SUPPORT. SHARING THIS INFORMATION WITH PEOPLE IN YOUR NETWORK IS THE KEY TO MAKING OUR CAMPAIGN SUCCESSFUL.

I believe that the board’s hard-fought reform efforts are starting to pay off.  Our financial standing is stabilized and strong and we have solid executive leadership on board.  Our employees are dedicated, conscientious and committed to deliver excellent customer service.

     I believe that controlling costs and gaining operational efficiencies must be balanced with safety, reliability, and excellent customer service. Today, PEC’s reliability rate ranks in the top 10 percent.  As well, I want to ensure that PEC continues to be a safe, highly desirable place to work, and that all employees are valued and treated well.

I am very optimistic for PEC’s future. We have recently reduced rates and increased the amount paid to members for solar and wind production.  We have a Rate Study underway with the hope of developing new, more flexible rate plans.

I support finding lower cost energy sources. Lower prices for renewable energy may offer opportunities for competitive, low-cost power that consumes no water. Traditional generation consumes too much water to support current and future demand for power.  I support policies that encourage energy efficiency and renewable energy utilization when it is cost effective.  Affordability is the key to cost analysis.

I earned my BA degree from University of Oklahoma and MA degree in Procurement and Acquisition Management from Webster University in St. Louis MO.  For 13 years, I was an analyst/programmer for Union Equity Cooperative Exchange, a regional grain co-op involved in international trading and exports.  I also served as a United States Air Force Contracting Officer, held high level security clearances throughout my 24-year career. I have served both in the United States and in Europe.

  PAPER BALLOTS SHOULD BE IN YOUR MAILBOX BY MAY 20.  MEMBERS MAY VOTE ON-LINE AT THE ELECTION SERVICE PROVIDER, MY MAIL OR IN PERSON AT THE MEMBER ANNUAL MEETING JUNE 20 2015 AT THE LEANDER ISD PERFORMING ARTS CENTER LOCATED INSIDE CEDAR PARK HIGH SCHOOL.