Thursday, January 26, 2012

Is Washington EMC "winging it" on Plant Washington finances?

My electric co-op requires that owner members fill out a form to ask permission to attend part of the Washington EMC's (WEMC) monthly board meeting. Yes, owner members must fill out a form, have it reviewed, and be approved to attend the board meeting for the co-op we own. We are allowed in just long enough to raise whatever concerns we have specified in our request, and absolutely nothing more than that. Earlier today fellow co-op owners Larry Warthen  and Lyle Lansdell joined me and Mark Hackett, a Cobb EMC member and electric energy expert, for a presentation on pro forma estimates and how that pertains to Plant Washington (because we learned two weeks ago today that there never has been a pro forma estimate for the $2.1B Plant Washington.

Hackett did a good job of explaining in layman's terms what a pro forma estimate is, why it is important, and how it can be used for making good decisions. His Power Point not only explains why a pro forma estimate is critical for a project as large and expensive as Plant Washington, but he also included charts which demonstrate that there is, and will be, sufficient power available for my EMC without this plant.

Following the presentation only one board member, Billy Helton (who happens to be my district rep) asked a question about power generation and supply which showed he was really thinking through the information that was presented. When CEO Frank Askew asked if any of us had a question, I asked how much the co-op has budgeted for 2012 expenses for this $2.1+B project which has no pro forma estimate and just lost the funding from the largest co-op in the project. It seemed germane to the the discussion.

Askew said that my question wasn't specific to the form I had filled out 10 days ago. Since we were talking about budgeting and decisions relying on owner member dollars, I thought it was appropriate. Call me crazy. The money comes from the members so I feel like I have a vested interest in what they decide.

As the board left the building I approached Mike McCoy, the Chair. He said that WEMC doesn't even have a P4G budget for 2012 and in fact the four remaining co-ops will meet soon to discuss that. It made my head swim. We are almost one month into the year on a project which even by conservative figures is well over the announced $2.1B dollars to build, and still lacks a pro forma estimate.

Since the money decisions seem to be made by moving some numbers around on the back of an envelope, maybe they ought to consider this: when Plant Washington was announced four years ago, the customer base among the nine Power4Georgians co-op participants was 741,000. Four years later, with just four co-ops clinging to this project, the customer base is 167,000. That's a reduction of 77 percent in customer load. In a state where there is a surplus of readily available and affordable power.  

Hmmm. They have spent $1M of our money, have no budget for 2012, and the largest co-op just took their marbles and left based on the fact that Plant Washington isn't a sound financial project to continue pursuing.

So, although I am repeating a question that has been asked often in the last four years, "What does the WEMC Board and senior staff know about new coal plants that companies abandoning coal don't know?" Owner members deserve an answer. Now.

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