Dan Davis: EMC transparency - Time to restore fairness
by Dan Davis
Columnist
February 09, 2012 12:01 AM | 1874 views | 8 8 comments | 13 13 recommendations | email to a friend | print
Nearly 5 million Georgians get their electricity from EMCs — electric membership corporations. According to their trade association, Georgia Electric Membership Corporation, EMCs “are consumer-owned and consumer-governed, not-for-profit cooperatives whose purpose is to ensure safe, reliable and affordable delivery of electricity to homes and businesses.”

Imagine being a business owner who can’t attend his or her own executive meetings or review the company books and records. That’s the reality for the millions of customer-owners (or “members”) served by Georgia’s 42 EMCs. Although members can participate in EMC matters by attending annual meetings and electing the board of directors that steers their EMC, participation ends there.

EMC boards are not required to open their meetings to the public, even when critical decisions are to be made about how to spend millions of member dollars. Accessibility is no better after decisions are made. Current Georgia law outlines a process by which members may access an EMC’s books and records, but the law is replete with so many exceptions that EMCs can force a member to go to court just to gain that access. This poses an undue hardship on EMC members.

In Georgia, all electric utility customers are considered “captive.” We cannot choose our electricity provider. Since electric rates can’t be controlled by the competition resulting from consumer choice, the Georgia Public Service Commission (PSC) regulates rates to protect the consumer — unless that consumer’s power is provided by an EMC. Because they are supposedly member-owned, current Georgia Law considers EMCs to be “self-regulating,” and exempts them from PSC rate regulation.

EMC member-owners are also captive investors. While shareholders in investor-owned utilities like Georgia Power choose to own stock, EMC members become investors by buying a home or locating a business where the meter will be owned by an EMC, then quickly find that their member-owner status gives them little real ability to govern their cooperative.

How can we ensure that EMC members have the meaningful, timely access to EMC meetings, books and records required to make EMCs truly self-regulating? By making some straightforward amendments to Georgia law.

Last year, Rep. Wendell Willard introduced HB 316 to require EMC board meetings to comply with Georgia’s Open Meetings law. The bill was sent to the House Energy, Utilities, and Telecommunications Committee chaired by Rep. Don Parsons (R-Marietta). Though it had a hearing, the bill never made it to a vote in the subcommittee.

I believe the full House and Senate should be given an opportunity to vote on the bill. Among the changes Georgia’s legislators should make to the law governing EMCs, to ensure openness, fairness and transparency:

* Make books and records related to EMC business available for examination and reproduction by members. Copying costs should be reasonable.

* Require a three-year retention period for written records of EMC meetings. When the board needs to discuss trade secret information or sensitive personnel matters, closed-door executive sessions should be allowed. But all final decisions should be rendered at meetings open to members.

* Require an EMC to respond promptly to a member’s request for information. If the info is not available immediately or not subject to inspection, require the EMC to provide a date when it will be ready and to give a reason to support why any “sensitive” information has been redacted.

* Allow members access to an up-to-date membership list, a crucial resource for any EMC member who decides to run for a position on the EMC’s board.

* Require EMCs to provide comprehensive information regarding upcoming board elections in bill inserts at least twice prior to board nominations.

The July 2011 indictment of former Cobb EMC CEO Dwight Brown on 35 counts of racketeering, theft and witness intimidation in connection with his service at Cobb EMC serves as a cautionary tale regarding the lack of transparency this proposed legislation seeks to address. Brown hired a for-profit company he created to operate Cobb EMC, at a markup that reached 11 percent. Many details regarding this arrangement came to light only because some Cobb EMC members filed suit in 2007 to compel the EMC to turn over the information.

Something is wrong when EMC members must resort to filing a lawsuit just to access information critical to determining whether an EMC and its board are acting in the best interests of its members. We’ve seen what can go wrong, so let’s fix it to prevent possible fraud and abuse in the future. Cobb EMC is only one of 42 EMCs serving over half of Georgia’s residents. It is the responsibility of Georgia’s legislators to do what’s necessary to protect hard-working consumers around the state — including the on-the-ground employees of cooperatives working to keep the lights on from Blue Ridge to Cairo, who themselves are EMC members.

Fairness, transparency and accountability aren’t too much to ask. As we’ve seen with Cobb EMC, keeping the lights on is no guarantee that EMC members aren’t left in the dark.

Dan Davis and his wife, Barb, have been member-owners of Cobb EMC for 13 years.
Comments
(8)
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Maatf
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February 09, 2012
I don't remember if this is currently allowed, but...

I don't want the EMC to be able to spend one dime on promoting anyone for the Board of Directors. We don't want to end up again where we have been for so long - with a Board composed of friends of the CEO.

John Berry
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February 09, 2012
I believe that this is a perfectly reasonable and necessary law. Cobb EMC must ensure that it operates in an atmosphere of transparency and openness. Where it is necessary for competitive or business confidentiality reasons to operate in closed, or executive session there should be a defined period of time when the minutes of those sessions is made available and the reason for such a session must be explained.
Katherine Helms Cumm
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February 09, 2012
I just filled out a form to request 2012 budget information at "my" co-op, Washington EMC. Last month I filled out a form so that I could attend the monthly board meeting and raise a concern. My question concerning the budget wasn't considered germane to my request even though I was there about budgeting issues.

This is like a parent begging their first grader for the report card. Absurd.
EMC Owner
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February 09, 2012
The forensic audit that is to be conducted at Cobb EMC should give the members of EMCs across the state the ammunition that is needed to get the self serving politicians to curtail the secret cash cow that is the EMC system. EMCs have almost as little oversight as a church. That makes it even more laughable when reminded of Sam Kelly's request that the members approve a mail in ballot since Home Depot and Coca-Cola allow it. He conveniently left out that HD and Coke also must comply with numerous SEC rules for reporting and openness that is unknown at the EMC. I can't wait for the results of the audit to be made public. It will show the depth of deception that is the EMC system.
Pat H
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February 09, 2012
The important legislation for EMC regulation was held up in committee, led by Chairman Don Parsons. Many people showed up to testify for the need for regulation and the hearing was not held until the day before cross-over day. One Cobb EMC lawyer went up to Don Parsons and said most of what he heard today were lies and that although he was not prepared to speak on behalf of Cobb EMC, that he would speak to him in private.

I challenge anyone other than a lobbyist or corporate crony who has actually heard from Don Parsons. He never responds to requests or communicates with constituents.

Hopefully in the next election we can thank Don Parsons for his public disservice.
Bill Clements
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February 09, 2012
I was a testifying witness at the House Hearing on House Bill 316 (open records - meetings) and the person who approached Mr. Parson was a Cobb EMC lobbyist and he did say that witnesses were being untruthful - I had a fully documentd file, with multiple letters from EMC lawyers, and offered to provide sworn testimony subject to punishment for perjury and invited the same from Cobb EMC;s lobbyist - Mr. Parsons just smiled and concluded the hearing - The lobbyist has donated to Mr. Parson's campaign and that is provable also !
Pat H
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February 10, 2012
Thanks for the clarification Mr. Clements. Why does the EMC need lobbyists and why are we the EMC members paying money to a political campaign for a politician who works against our best interests?
anonymous
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February 09, 2012
After Cobb EMC, You would think that some of Cobbs Legislative team (Rogers, et al) would have already taken the initiative to get something done about the "license-to-steal" that is the EMC way in Georgia.
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