In Part I of our co-op comparison, we compared Cobb EMC to Pedernales Electric Cooperative (PEC) in Texas, and looked at how members there united to take back their co-op from a runaway board. This week, we look at some of the principles newly elected reform board members implemented at PEC and think about how we could adapt similar measures to fit our needs at Cobb EMC.
Best Practices: What they are and how we can use them
Dr. Patrick Cox, a University of Texas-Austin professor elected to the PEC board in 2008, is a leading voice for best practices at electric cooperatives. Cox argues that all cooperatives should establish a set of core values based in several areas to ensure long-term success. We hope the newly elected Cobb EMC board members and other members will take notice of the two key principles Dr. Cox stresses:
Democratic Member Control: Dr. Cox points out, “cooperatives are democratic organizations controlled by their members, who actively participate in setting policies and making decisions.”1 Cobb EMC, now under new management and with four new board members, can bring democratic control back to the EMC with a few relatively minor changes. With two elections behind us, we’ve slowly but surely seen democracy return to Cobb EMC and the new board is pushing for more transparency and democracy.
The implementation of Democratic Member Control was of the highest priority for the reform board members at PEC. In 2008 they quickly adopted a series of transparency measures that included open records and open meetings, live streaming of board meetings on the Internet, and engaging membership in meetings, online forums, blogs and through social media sites. Members are now able to vote by mail, in-person, or even online. Like Cobb EMC, PEC hired a third-party firm to handle their elections which “guarantees the efficiency, accuracy, security and integrity” of the elections.
The elections process is a key component of democratic member control for Cobb EMC. PEC took on this major reform successfully and we can do it here. We need to implement a system that allows for fair and open voting for all. While EMC members roundly rejected mail-in ballots in September 2011, they should be reconsidered with the proper transparency measures in place. We need to make sure that all EMC members have an opportunity to inform themselves about the co-op’s affairs and cast their vote, and that we have in place an honest and transparent process for counting the ballots.
Members’ Economic Participation: According to Cox, in a successful co-op “members contribute equitably to, and democratically control, the capital of their cooperative.” In contrast, under the leadership of Dwight Brown, Cobb EMC regularly made major financial decisions that significantly impacted EMC members. Without the right to attend regular board meetings, EMC members were not consulted, even for large expenditures. Brown and his entrenched board spent millions of dollars on creating Cobb Energy, naming the Cobb Energy Centre, developing coal fired power plants and, of course, spending millions of EMC dollars on legal fees. In the midst of these actions, the EMC rarely issues capital credits to members and instead spent excess EMC profits on the expensive ventures that rarely, if ever, benefitted EMC membership.
In solidifying member economic participation, PEC distributed over $14 million in capital credits, hired a new auditor, and earned clean audits in 2009 and 2010. This commitment to financial stability not only improved the image of PEC but also significantly improved the viability of the company. Through the board’s changes, PEC successfully reduced its operating costs by more than ten percent in 2010.
PEC not only adopted a series of best practices, but also developed a member bill of rights (more on that here) to enshrine these values in the co-op’s operations and implemented new transparency measures that are quickly becoming a benchmark in the industry. PEC is a textbook case, paralleling where Cobb EMC was and where we can go from here. PEC members and new directors laid a path for us to follow – let’s take advantage of PEC’s experience to bring true transparency to Cobb EMC.
How We Make it Happen Here:
It’s time that we see Cobb EMC establish “best practices” of its own, ensuring that it will never again be a runaway co-op. While the board and management are committed to transparency at Cobb EMC, it’s our job as members to see that those transparency measures are preserved for the long haul, and moreover that Cobb EMC becomes a model for electric cooperatives throughout the country.
We helped elect new leadership to the Cobb EMC board in November, but the ball is still in our court. When board meetings open up to the general membership (hopefully in January), make it a point to attend, listen to your board members and ask them to pursue best practices for Cobb EMC. Volunteer, donate, and VOTE for three new board members in February and three more in the final round of elections in May. It’s going to take all of us staying active and informed and pushing for a reformed, democratic Cobb EMC.
Cooperatives throughout the state and country are watching Cobb EMC, hopeful that members will continue to stand up for transparency, accountability and integrity. The power is in our hands, so let’s make sure the future shines bright at Cobb EMC.
1 Cox, Patrick Best Practices of Cooperative Boards http://myenergycoop.org/images/articles/Patrick_Cox_-_Best_Practices_of_Co-op_Boards.pdf