Rapp Electric Co-op hit with legal petition

Three co-founders of the Repower REC campaign have filed a legal petition with Virginia’s State Corporation Commission (SCC) alleging that Rappahannock Electric Cooperative (REC) is improperly blocking the group’s efforts to reform what is the largest electric co-op in Virginia.

“After months of attempted engagement during which time REC’s full board refused to participate in dialogue, the Repower REC members are asking the SCC to allow member-owners to pursue meaningful reform,” Repower REC says in a statement.

The reform efforts, which have gained the support of nearly 200 member-owners since the campaign launched in May, focus on bringing increased transparency, financial accountability, and member control to the co-op, the group states.

The petition asks the SCC to issue an injunction requiring REC to allow the proposed bylaw amendments from Repower REC’s co-founders be put before the co-op’s membership for a vote.

“The bylaw amendments would allow co-op members to observe board of directors’ meetings, receive financial disclosure of board-member compensation, and clarify the proxy ballot process for board elections. This would uphold ‘the policies of democratic control and member participation’ that are embodied in Virginia law pertaining to electric cooperatives,” according to the petition.

Matt Faulconer, REC’s Manager of External Affairs, provided the following statement to the Rappahannock News: “Rappahannock Electric Cooperative’s Board of Directors fully respects our members and the democratic process of governing their cooperative. It is unfortunate these three individuals have escalated this matter to the State Corporation Commission.

“We are especially concerned about the increasing costs of addressing this unnecessary challenge, and the burden it will ultimately create for the rest of our nearly 150,000 members. The claims expressed by these three are about processes and personal preferences, not substance. The focus of REC’s Board, management, and employees is the best interest of our membership as a whole and in accomplishing our mission of providing safe, reliable, and affordable electric service.

“We always have and will continue to explore opportunities and processes that aid in accomplishing that mission. Threats and actual litigation by special interest groups at the detriment of our membership must be defended. All claims within the current litigation will be addressed within the applicable legal forums.”

The petitioners are longtime REC members Brigadier General John Levasseur (US Army, retired), Michael Murphy, a retired educator, and Seth Heald, a retired lawyer with the U.S. Justice Department. General Levasseur served on REC’s board of directors for more than three years.

The three are represented by the non-profit public interest law firm Appalachian Mountain Advocates.

“All we’re asking is that REC’s board members live up to the cooperative principles they claim to follow. It’s a shame we’ve had to file this petition to do that,” said Murphy. “We attempted to discuss our proposed reforms with the full board, but were told that the board did not want to engage in a ‘dialogue’ with us. We’re hoping our SCC filing will lead eventually to a constructive dialogue with board members, and significant reforms at REC.”

One of the largest electric co-ops in the United States, REC provides electric service to more than 160,000 member-owners in portions of 22 Virginia counties, including Rappahannock.

Repower REC points out that electric cooperatives are by definition member-governed electric utilities in which customers have a significant voice in governance and decisions affecting electric rates and other important financial decisions. Virginia law and REC’s bylaws both authorize REC members to propose bylaw changes for membership vote.

But, the petition alleges, REC’s board of directors has improperly refused to allow the member-owners to do so.

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1 Comment

  1. It would indeed appear that Messrs. Heald, Murphy, and Levasseur have uncovered a problem with the REC’s corporate governance. And it would occur that the REC is not interested in either transparency or accountability. This will be fun to watch. The petitioners are going to eat the REC folks for breakfast. It’s 2018 REC, not 1968.

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