Cobb EMC Members Formally Request Federal Investigation of Possible Violations of the Federal Power Act by Cobb EMC

Marietta, Ga. – Today a group of Cobb EMC customers sent a request to the Federal Energy Regulatory Commission (FERC) urging an investigation of new evidence of wrongdoing by Cobb EMC based on violations of the Federal Power Act (FPA). The FERC has regulatory authority over Cobb EMC. The action was announced in a press conference held outside the energy company’s headquarters at noon.

Two Cobb EMC customers are requesting the investigation, Daniel W. Davis and Mark A. Hackett. They are represented by William R. Mapes, Esq. who specializes in legal actions before the FERC.

“We are requesting a federal investigation of evidence of multiple violations of the Federal Power Act and Federal Energy Regulatory Commission rules by Cobb EMC,” said Mark Hackett, one of the Cobb EMC customers requesting the investigation. “These apparent violations provide credence to claims in Georgia courts that Cobb EMC engaged in affiliate abuse, cross-subsidization and withholding of material information.”

“Fundamentally, we believe that these violations may explain in large part why our Cobb EMC bills are so high,” said Daniel Davis, one of the Cobb EMC customers requesting the investigation.

William Mapes, an attorney based in Washington, DC who submitted the letter to the Commission on behalf of Davis and Hackett, said that there are two bases for the investigation, “first, enforcement of the FERC’s market-based rates and the prevention of unjust and unreasonable rates, and second to ensure that the FERC’s regulations related to energy markets haven’t been violated. Based on the data that we have gathered, it appears that Cobb EMC failed to disclose material information when it applied to the FERC for permission to levy market-based rates starting in 2001.”

“There are several specific relationships and details that Cobb EMC did not disclose,” said Davis, a Cobb EMC customer for 13 years. “Cobb EMC’s CEO Chip Nelson did not disclose the derivative litigation and its settlement in his application regarding holding interlocking positions at both Cobb EMC and another EMC, Cooperative Energy Inc. In addition, Dwight Brown apparently never disclosed potential conflicts of interest because he never even submitted an application to the FERC to hold interlocking positions, which would have necessitated disclosing that he was a defendant in the litigation. Was this because doing so meant that the FERC might have revoked market-based rate authority?” asked Davis.

Mapes noted that “our letter points out that federal court decisions express profound concern regarding conflicts of interest and concentrated power in the hands of a few individuals who sit on boards of companies with intersecting interests.”

Hackett, whose professional career is in the electric utility and software industries, expressed additional concern. “As yet another Cobb EMC affiliate, Power4Georgians, LLC, pushes to construct two coal-fired generating facilities costing over 4 billion dollars, we can only speculate that this ongoing pattern of self-dealing will continue, but now with a much larger river of our dollars. I can only imagine the impact of that on my bill – which already seems unreasonably high and the reason I started looking into this in the first place.”

Joining Davis and Hackett at the press conference was Joel Mendelson of Take Back Cobb EMC. Take Back Cobb EMC is a citizen-based organization representing the concerns that community members have with the current leadership of Cobb EMC.

To sign the petition asking the Cobb EMC board of directors to hold new board elections now and sign up for more information about getting petition copies to circulate, Cobb EMC members can go to www.TakeBackCobbEMC.com. Only Cobb EMC members are eligible to sign the petition, however everyone can help circulate it.

 

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One thought on “Cobb EMC Members Formally Request Federal Investigation of Possible Violations of the Federal Power Act by Cobb EMC

  1. I just received a newletter from Cobb EMC that mentions that they are making a 14.5 million dollar rebate to members this year. It also mentions that from 1994 they have distributed 54 million dollars. That makes an average of 2.35 a year from 1994 to 2009. It seems odd that suddenly they are able to rebate so much during some of the worst economic times that we have seen in a long time, and that during the booming years they averaged 2.35 million a year in rebates. Do we really have to wonder where the funds that should have been rebated actually went?
    I’m thinking it went to contributing to lining management’s pockets at the expense on the membership.

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