Driving Co-op Reform

This morning's scan of the news included three articles on Cobb EMC. I couldn't have started the day any better.

The Cherokee Tribune reported that the current Chair, Larry Chadwick (serving since 1982) and the Vice-Chair, Sarah Brown (elected in 1979) will not pursue re-election. The Atlanta Journal Constitution includes an article on the "New Day" at Cobb EMC, which will include open board meetings, quarterly reports, a member advisory committee, a new logo, and bills for service coming from the co-op, not the beleaguered for-profit Cobb Energy. The Marietta Daily Journal, which has faithfully stayed on top of this complex and long lived issue, included the recent release of Chip Nelson's salary as the new EMC CEO.

I had no idea that today would be the first time I could tell fellow Washington EMC co-op members that if Cobb can begin to operate in a transparent manner that better serves the members, surely we can do the same here.

A lot of ground work has been laid for the Annual Meeting this Saturday. Some people are coming because of the opposition to the Board Chair, who has been on the board for 37 years. Others are coming with questions that deserve answers. Some are coming for both. Maybe the bonus will be that members who come because of the door prizes stay for the question and answer session with the Board, and see there are other benefits to membership besides a chance at a nice door prize.        

    

Waiting for Saturday

When I decided to fight a coal fired power plant 3.5 years ago, I didn't know much about energy production and my knowledge of efficiency and conservation was pretty pedestrian. And I was clueless about the poor condition of our rivers and streams.

What I didn't know at the time, was that there were also some serious problems with the governance at my electric co-op, Washington EMC. It became very clear at the first Annual Meeting in October 2008 that the Board of Directors had no interest in member concerns and questions.

This Saturday is the fourth meeting I will attend since the plant was announced. In the past three years the Board and CEO have refused to recognize members, told us the EPD would answer our questions (which it can't do when the questions concern the governance and decisions made by the Board and CEO) and tried to hide behind a CEO who has said very plainly he doesn't like speaking in front of large groups.

Hello? He works for the 15,304 metered customers who are MEMBERS of the company paying him. Surely once a year he can manage to answer our questions. We aren't interested in shouting, but we are entitled to being treated politely AND having our questions answered where all members can hear the questions and the answer.

In May two FACE members and I met with the CEO Frank Askew, CFO Wendy Sellier, EMC attorney Skip Wommack, the Board Chair Mike McCoy (who has served for 37 years without opposition until this year, but term limits is another issue), and Billy Helton, who lives in and represents the district where the plant would be located.

We agreed that we disagree on the plant, asked some questions, and were still disappointed in the lack of research and business planning they could use to support their insistence on this $2.1+ B project. We did get them to agree to a Q&A after the door prizes are drawn at the end of the business meeting (which is the reason most people attend. If the prizes were drawn first the room would be empty in 5 New York minutes).

When I confirmed the Q&A with Askew in August, he back pedaled saying that because FACE has said that we know people are intimidated by speaking out, EMC leaders would instead speak with people one on one. I may not agree with Billy Helton's support of the plant, but ALL MEMBERS owe him their thanks for insisting that the Board honor their previous agreement.

Yesterday I posted the 990 tax return with the Board and CEO compensation figures in it. I don't want to take issue with how much Askew is PAID BY MEMBERS, but I do think that for someone making north of $209,000 a year now, he could and should have answered the questions raised by the people writing his paycheck at earlier meetings.

I, nor FACE, are endorsing or supporting a candidate in the one contested race. What the organization is doing is encouraging members to attend the meeting this Saturday (Elder Middle School on the Linton Rd in Sandersville with registration and voting beginning at 8:00, business meeting at 10:00, Q&A immediately after prizes are drawn at the end of the business meeting). FACE understands that there are many people in the community who are afraid for their jobs. or have other pressures exerted on them to support the plant. FACE and others in our community are willing and ready to ask questions and hear the answers in a public setting where all EMC members can listen and learn for themselves.

Whether you support Plant Washington or not, EMC members need to be involved in OUR co-op. There are serious issues which need to be addressed even if the plant goes away tomorrow. All of us need to step up and do our part as members to put this co-op back on track to serve the members better than we have experienced in the last 3+ years.

Simple Math

Some people where I live wonder why the "doings" at Cobb EMC are so important to my fellow Washington EMC co-op members and Washington County tax payers. Cobb EMC is the lead partner in a group of EMCs who want to build a coal fired power plant about 8 miles from my house and 8 miles west of my family's timber farm.

Some of the Cobb co-op members have reviewed a just released audit which reveals stunning losses to the co-op. The Cobb EMC Owner's Association (CEOA) site includes the following on the costs of delays in liquidating Allied Utility Network and Allied Energy Services, the company which received a no-bid contract to build Plant Washington in my front yard. The CEO site includes this:

UPDATE: According to the 2011 Audit Report, Allied Utility Network ceased operations in October of last year and was dissolved – apparently with no disposition of assets. The company had never been profitable. Its only earnings had come from services provided within Cobb Energy or its affiliates. From 2002 to 2008, it had earned $20.8 million with operating expenses of $26.5 million. Cobb EMC, of course, subsidized the loss through service fees and other charges billed by Cobb Energy.The report also states that Alford’s Allied Energy Services was sold just one month ago on August 9th, for the whopping sum of $128,256. Quite a bargain for the company selected by Power4Georgians to develop two multi-billion-dollar coal plants. Perhaps that’s because it, like Allied Utility Network, had never been profitable — at least not for Cobb Energy. From its creation in 2004 through the end of 2007, it had spent $5 million to bring in revenues totaling only $704,000 — a loss of $4.3 million.Finally, we are able to see from the report that Rayder’s and the Board’s foot-dragging was costly, because subsidiaries held in the liquidating trust appear to have continued to operate at a loss, cancelling out all the gains from disposition of their assets and costing the co-op an additional three quarters of a million dollars:

2008-09 Report: Net loss of $662,367
2009-10 Report: Net gain of $1,964,044
2010-11 Report: Net loss of $2,061,824
Total: Net loss of $760,147

That's a lot of member dollars for the Board to lose while receiving thousands each year in compensation.
When Dwight Brown announced the creation of Cobb Energy in 1997,  the Atlanta Journal Constitution reported that Brown promised members, “We will not allow Cobb EMC to subsidize this new company,” he said. "We make this pledge that Cobb Electric Membership Corporation will not subsidize this other company, and this other company is created to work for you and to work for Cobb Electric Membership Corporation.”

That promise never held water. The AJC reported that the Cobb EMC Board also loaned Brown $3M, and then forgave the loan. Brown used that money to purchase shares of Cobb Energy (Brown and his wife received close to $2M in six years time until the agreement was legally shut down). Since Cobb Energy was announced, the non-profit co-op's expenses have soared and member dollars have been funneled into subsidiaries which have lost millions. The co-op has also spent an estimated $10M+ in legal costs since Cobb Energy was created. And much of that involves legal fights against the very members they are supposed to serve.

Over 3.5 years ago my EMC got in bed with Cobb EMC (and seven other co-ops, four of whom got out of the bed over 2 years). But now we are beginning to know just how deep the problems at Cobb run. All this dirty laundry should raise some serious questions for me and my fellow co-op members about our business partners.

We may be a little rural community and we really do know where folks are going without using their blinker.  But that doesn't make us stupid. Understanding the management and financial problems surrounding Cobb EMC, their indicted former CEO, and their Board, doesn't require higher math skills, a degree in accounting, or an MBA. A little old fashioned country figurin' makes it pretty clear: we don't do business like Cobb EMC, and we would be better off to get out of that bed now.      

Mr. President-Throw Us a Bone!

Dear Mr. President-

Could you throw us a bone? Please? Citizens have waited patiently (20 years alone on tougher Clean Air Act Standards for mercury and other hazardous pollutants) to have cleaner air (and therefore cleaner water, it is a great 2 for 1 opportunity). Since tougher standards began to be discussed, I have gone through a pregnancy, delivered a baby, and raised that child to be an adult. That seems like enough time to get around to helping all of us have cleaner air to breathe.

It's hard to be patient when the rates of heart and lung disease, stroke, asthma, cancer, developmental problems in newborns and children, continue to increase as a result of dirty air. 20 years.

You can do what's right and change your mind on the smog emissions. Really, we'll forgive you. Everyone makes mistakes.

If you think making this announcement on the Friday afternoon of a long weekend will make the backlash go away, it won't. The American Lung Association has already announced it is heading back to court since it has waited two years while you have promised these things would happen.

I can't wait for November to get here, or maybe not, at this pace, to find out if your Administration is willing to stand up to the big industry lobbyists who think it is o.k. to continue to pollute our air and degrade our natural resources (The New York Times ran a column about that, "Profits Before Environment" earlier this week). One of those industry heavy weights, Chris Hobson of the Southern Company, said that mercury emissions are "hazardous" when he testified in May at the EPA's Public Hearing on the proposed Clean Air Act Standards (his company reported $2B in profits last year while spewing mercury into the air I breathe every day).

And I've tried to be hopeful, really. I think we should get out of Iraq and Afghanistan faster, but I appreciate your concern for protecting Americans and those who will be victims of harsh governments. I was in the trenches with you on health care reform. I urged John Barrow to please do what his constituents thought was best. I've been back to talk to him about the proposed Clean Air Act Standards (his staff probably recognizes my voice now). I asked John to support your efforts to increase the debt ceiling while closing loop holes for companies making billions and paying little or no taxes (you know some of those guys, like Jeffrey Immelt at GE. He's been to your office before to talk about the economy and jobs creation, right?)  

So Mr. President, don't mess up in November. Make good on what millions of Americans have waited so patiently for. Tom Pierce may have said it best at the EPA hearing in May when he said, "I would urge you to turn a deaf ear to those who say they need more time to kill us."

And I won't even mention the Tar Sands Pipeline.

Katherine Helms Cummings

Administrative Problems Cut Rural Health Care Funding

In June the President created a Rural Task Force which includes a long list of federal departments and offices. Last month they were on the road listening to citizen concerns. Kathleen Seblius at HHS is to be commended for making sure that some of our country's brightest health care leaders at HHS have a real understanding of the challenges rural communities face in creating and sustaining healthy communities. Some of those leaders include Mary Wakefield (North Dakota) at HRSA from  Marcia Brand (West Virginia) at the Bureau of Health Professions, and Tom Morris (North Carolina) at the Office of Rural Health Policy.

All of these agencies understand and advocate for rural physicians who are frequently on the short end of re-reimbursement, treat higher numbers of Medicare and Medicaid patients, and must compete for staff  against the higher salaries available in larger cities. Rural doctors don't get a discount on all the equipment they need just because they are in a smaller demographic. Just as their patients want the best care possible, doctors want to deliver it and they need the technology and equipment to do that.

When Congress returns it is imperative that it address the complete omission of  rural clinics in  federal quality improvement efforts and funding. The National Rural Health Association alerted members that it would be working with partners to lobby Congress to correct an administrative problem that resulted in the lack of any funding for improving the health of rural American through these programs. The money is already budgeted but due to a data collection omission at the Centers for Medicare and Medicaid, reports filed by rural physicians were not included.

I've heard people, including state and federal elected officials, downplay the importance of high quality health care in rural communities (it is stunning). Some of them had said they don't ever visit rural communities and just don't know much about them.(we make sure they know the welcome mat is always out). But when they go to the beach, the mountains, or visit friends and family out of town, most likely their trip takes them through a rural community. An accident, heart attack, stroke, or sudden illness isn't the time to wish there was good quality health care just down the road.

Congress needs to fix this administrative issue so rural gets the funding  that is already budgeted. We want and deserve our fair share. The White House and Congress need a fuller understanding of what makes the success and sustainability of rural America critical for solving the problems our country faces. Health care is an important one.  

    

Cobb EMC Director's Retirement Benefits Can Total $211,200. Not Bad for a Volunteer Position.

For some unknown reason, after years of asking, the Cobb EMC has posted some of the financial information about Board of Director benefits. They receive:
$600 per board meeting
$500 for a committee meeting or a conference
$50.00 for a conference call
$211,200 in retirement benefits ($1,100 per month for a "volunteer" position) 
health benefits
life insurance

If the full Board meets once a month, it costs the co-op $6,000. At one meeting a month that is $72,000 just in costs to pay the Directors to "manage" the co-op. If 10 Directors receive the full amount of retirement benefits they cost the co-op, which is supposed to operate as a non-profit as a service to the members, $2,112,000. Yes, over $2M!

I am willing to go out on a limb and guess that because they were supposed to hire a new CEO to begin working  on March 1, 2011 (they didn't), and the CEO was re-indicted with four additional charges of witness intimidation for a grand total of 35 counts, that board met more than once in person each month. 

Maybe they meet when they prepare to appear in court as required by a judge (the newspapers said where they sat when they entered the courtroom last month looked planned). It adds up to a lot of money out of co-op members' pockets (and that doesn't even include the estimated $10M+ in legal fees that the co-op has spent in a protracted court battle with the members they are supposed to be serving).

Cobb EMC members stepped up to the plate years ago to re-gain control of their co-op. They have done it at considerable personal expense (good lawyers are important when you are fighting some of the most expensive lawyers in Georgia, like former Gov Roy Barnes and King and Spalding). They have also spent days, weeks, months researching to understand just how serious the problems plaguing their co-op are.

With today's revelations on how much is now known about benefits for the Board of Directors, it looks like more fuel has been added to the fire. Members are determined to wrestle the co-op back from the people who have gotten it mired in money losing projects for over 14 years. You can find out what they are doing by visiting Take Back Cobb and Cobb EMC Owner's Association. I wish them the very best of luck in continuing the work that is necessary to do this.