Rapp Electric says assertions surrounding transparency, fairness are baseless

Local group undeterred, will continue REC reform efforts

A lawyer for Rappahannock Electric Cooperative has sent a 5-page response to three local men who recently announced the Repower REC campaign “to bring needed reforms” to the large electric utility that serves Rappahannock County.

“An electric cooperative is owned by its customers. If you get your power from REC then you, like us, are a member-owner of REC. That means you have a right to be kept informed of your co-op’s affairs and have a say in how your co-op is run,” Seth Heald of Rixeyville, Michael Murphy of Boston, and John Levasseur of Fredericksburg stated in forming Repower REC.

“This is especially important because REC members are supposed to elect the co-op’s board of directors, and the board’s decisions affect our pocketbooks. REC’s recent 40 percent increase in customer ‘access’ fees has increased monthly bills for all REC members’ homes and significantly reallocated how REC collects revenues from different customers,” the three stated.

“Yet it was decided in a closed board meeting with little if any advance co-op-member input and review. We believe that significant decisions like these should be made in the open, so all REC members can see how their board functions, and with full member input and oversight. Democracy is, after all, the core principle of the cooperative form of business ownership, and a democracy can’t function without transparency.”

Writing on behalf of REC’s board of directors, including chairman Christopher Shipe, secretary Linda Gray, and president and CEO Kent Farmer, Charles W. Payne, Jr., of the Fredericksburg law firm Hirschler Fleischer, answers “we respectively disagree with your assertions that REC’s Board is ‘not fair, democratic and transparent.’ . . . The reality is REC is the complete opposite and is one of the most transparent and democratic companies in its industry.”

The lawyer says beyond the co-op’s independent financial auditors and numerous ongoing disclosures to the Virginia State Corporation Commission, it complies with Rural Utilities Service standards and provides numerous filings to federal agencies that include FEMA, OSHA, and the Department of Energy.

“REC’s annual meeting and election processes are clearly representative of the Cooperative’s commitment to democratic principles, including without limitation (i) encouraging the participation of all its members in the annual election process through extensive marketing and outreach efforts, (ii) establishing participation incentives like door prizes, (iii) providing larger venues in the heaviest populated areas of REC’s territory and (iv) offering members balloting options including participating in person or by proxy voting. In addition, REC annual elections consistently exceed minimum member quorum requirements,” Payne writes.

The three men of diverse backgrounds — Heald spent 34 years as a lawyer with the U.S. Department of Justice in Washington, D.C. — knew beforehand that their efforts would be met with resistance.

“This won’t be easy,” the group opined in this newspaper last month. “We’re dealing with an entrenched REC board that is all too comfortable with its generous compensation and the lack of transparency that frustrates genuine member oversight of the board. That’s why REC’s board has resisted even modest efforts to improve transparency.”

Repower REC also held a community forum at the Little Washington Theatre last month to answer questions and enlist support from local residents.

Now, in response to the REC’s letter, Heald and Murphy tell the Rappahannock News: “As you can imagine, we were disappointed to see that [REC] responded so negatively to our recent attempt to bring some modest transparency and democracy reforms to our electric cooperative.

“When we asked REC’s board to allow us to gather petition signatures so we could submit proposed bylaw amendments with common-sense reforms to get our co-op to do what some other electric co-ops are already doing, we were met with complete resistance. Not only is REC’s board not in favor of our reforms, it claims absurdly that we somehow don’t even have a right to put them up for a vote by the co-op’s membership.”

Repower REC’s proposed reforms are, (1) to make REC board meetings open for co-op members to observe, which could easily be done with online access, (2) to have REC fully disclose in its magazine how much our co-op is paying each board member each year (with money that comes out of our electric bills), and (3) to make the annual board-election ballot more clear, so that REC members actually know who they’re voting for, and how their ballot will be handled.

The co-op’s lawyer wrote that the REC board and its officers not only “strongly disagree” with Repower REC’s assertions, “in our opinion, they are based on hearsay, misinterpretations, and lack of transparency as to your true underlying agenda and motives versus good faith pursuits of the best interest of the membership.”

Repower REC says it is undeterred in its mission: “The REC board’s action in trying to block our modest reform efforts makes us more determined than ever.”

About John McCaslin 465 Articles
John McCaslin is the editor of the Rappahannock News. Email him at editor@rappnews.com.