Wednesday, August 30, 2006

GVEA board asks for G&T bylaws to be re-written

It was just 20 days ago that I posted a blog regarding the Interior Alaska electrical utility GVEA working to transfer its generation and transmission assets ($200 million +) to a separate cooperative composed of one member. I had concerns about this transfer effectively cutting out the existing membership of any involvement or control of this new cooperative GVEA G&T.

Since that time, at my request, I met with GVEA representatives to discuss my concerns and also at the regular GVEA board meeting two nights ago. I discovered then that the reps had brought my issues up with management (thanks!). I was told that Board and GVEA contract attorneys also discussed these matters. At this board meeting, there was an extensive executive session to which I was not privy, but when they came out, a couple of motions were made to instruct management to change the bylaws to read (I've not seen the exact wording yet): 1) GVEA board members will be the board of the G&T; and 2) GVEA members will have equal rights with regards to the G&T to what they currently have with their current cooperative. I think the board was distinctly discomfited with being potentially cut out of management of this new cooperative, thus item 1) above. Not trying for 2) would make for a difficult campaign to pass the membership vote over transferring those assets.

I have to admit to some amazement over the looseness of the existing G&T bylaws. They were created a number of years ago, but no one seemed to read them with any critical eye. I hope that this renewed attention to them will lead to better written ones. GVEA tends to be insular about their activities, but generally has seemed pretty detailed about procedural items. The current G&T bylaws don’t appear to have had much review. If this lack of attention to detail is indicate of the entire proposal, I am seriously concerned.

Once these bylaws are changed, we can return to the issue of whether or not transferring the members’ assets to this new corporation will be in the members’ best interests. Questions remain.

GVEA states it will allow a reduction in margin requirements of about $30 million which somehow will be returned to the members and that operation of this new corporation won’t cost any more than operating as a single cooperative.

1. I would like to see an honest cost analysis of operating this new corporation, from extra legal fees, changing letterhead, accounting, time-keeping, advertising, borrowing.
2. I wonder if this will give these two cooperatives a chance to borrow more money for projects that may or may not be in our long term best interest. We are already in the middle of an expensive series of projects: Intertie, BESS, 2 N. Pole power plants, a new BESS being discussed, substantive extra power requirements from such as Pogo and Delta-Greeley military operations, continued discussion over the Healy Experimental Coal Plant.
3. What kind of return will members actually realize in rate reduction?

Deadlines for submitting comments to the RCA are mid September.

I think that GVEA owes it to the membership to give more details to the membership about the deliberations leading up to this proposal. We see very little in past board minutes, which tend to be too general to be of much use. The only thing we saw was a one-sided proposal in the Ruralite which turned out to not be quite factual, as the board discovered after hearing my concerns.

It was rather odd experience to have my comments on the bylaws addressed in less than a month, though I don’t feel I earned any personal feelings of “winning” from their action. Rather the success is for doing the work of management and the board in reading through the details of what they were blithely establishing in their role of working for the membership of GVEA. I didn’t hear or really expect them to come out and say thanks, but will be happy if they realize that keeping the membership substantively in the loop can actually pay off with valuable input from informed members.


List of filings and orders:

Request for confidentiality:

Ruling on first set of issues:


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