Letter: REC’s board — cooperative?

The June issue of Rappahannock Electric Cooperative’s (REC) magazine, Cooperative Living, describes electric cooperatives’ annual meetings, where members “make decisions about their customer-owned utility” and “vote on changes to the bylaws that govern the utility they own.” This, the editorial says, is “an old-fashioned exercise in democracy that’s both refreshing and resilient, a living reminder . . . of when citizens would get together to make important decisions about their shared welfare . . . ”

That sure sounds nice. If only it were true.

REC customers receive their annual proxy card with the July issue of Cooperative Living. Because REC is a cooperative, every customer is an owner – entitled to vote at the annual meeting. Those who can’t attend can vote by proxy. But what is there to really vote on?

Under REC’s bylaws members elect the board of directors and vote on proposed bylaw changes. REC’s board members often run unopposed. Challengers who run for the board find it all but impossible to defeat an incumbent, in part because the board gives itself the power to vote blank, signed proxy cards as it sees fit. There have been no bylaw amendments on the ballot in the four years I’ve been an REC member. 

There should be two issues on this year’s ballot, but REC’s board has blocked that. Virginia law gives co-op members the right to propose bylaw changes for a full membership vote. So I proposed two for this year’s ballot.

I proposed a bylaw to allow REC members to observe board meetings. Open board meetings would give REC members a chance to see what their board is doing and how it’s managing the co-op’s affairs. If a few concerned REC members could attend each month, they could inform others and serve as watchdogs. Other electric co-ops allow this, including the nation’s largest – Pedernales Electric Cooperative in Texas.

Second, I proposed requiring REC each year to disclose to all co-op members the compensation paid to each board member. I suspect few REC members know the board sets its own pay, which is rather handsome in my view. REC is a nonprofit – supposed to serve customers at low cost.

REC members can learn board pay details if they know to ask REC or search public tax files. But why doesn’t REC just disclose this information regularly to all members? We can’t exercise meaningful oversight on board pay if most of us don’t know what it is.

REC’s board surprisingly blocked my proposals from appearing on the ballot. It seems the board will not allow a vote on measures to allow basic co-op membership oversight.

The board gave me two reasons why it’s blocking a vote on open board meetings. First, the board said open meetings would violate a Virginia law requiring co-ops to provide electricity at low cost. Second, the board said Virginia law and REC’s bylaws give the board authority “to make its own rules and regulations as to its procedure.” I don’t see how these laws bar co-op members from voting on opening up board meetings

The board’s reasons for blocking a vote on required disclosure of board compensation are truly far-fetched. The board claimed that since Virginia law gives it authority to make its own rules as to its procedure, it cannot allow the co-op’s members to vote on requiring annual disclosure of board compensation. The board added that a law giving an electric co-op’s board the power to set its own compensation also somehow makes a vote on requiring compensation disclosure illegal.

Telling all co-op members how much the board pays itself has nothing to do with board rules about meeting procedures. And requiring REC to disclose board pay to all co-op members has nothing to do with the board’s power to set its own compensation.

Perhaps recognizing the absurdity of its position, REC’s board told me it is “considering” some form of board compensation disclosure. I doubt that any form of disclosure the board comes up with will be as complete or accessible to co-op members as my proposal. It’s a shame REC’s board blocked co-op members’ chance to vote on full disclosure of each board member’s pay.

Seth Heald

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