Cobb EMC to send first wave of lawsuit checks to customers
by Hilary Butschek
July 27, 2014 04:00 AM | 19330 views | 12 12 comments | 16 16 recommendations | email to a friend | print
A pallet full of checks waiting to be mailed to the about 77,000 customers who were part of a class-action lawsuit against the Cobb EMC is seen here. The lawsuit, which lasted four years, claimed the EMC withheld money.<br>Special to the MDJ
A pallet full of checks waiting to be mailed to the about 77,000 customers who were part of a class-action lawsuit against the Cobb EMC is seen here. The lawsuit, which lasted four years, claimed the EMC withheld money.
Special to the MDJ
MARIETTA — After four years battling in court, many customers in a class-action lawsuit who claim Cobb Electric Membership Corp. withheld money that was rightfully theirs will get a check in the mail.

More than 77,000 people who have used Cobb EMC as their electric provider will receive checks in the coming weeks from Cobb EMC, said David Cohen with Powder Springs-based Complex Law Group, who is representing the customers.

Cobb EMC is a nonprofit owned by its 175,000 customers, called “members,” and was accused of failing to return excess revenues to customers.

The suit alleged that $286 million should have been returned to members but was kept by the electric co-op instead. At the end of each year, Cobb EMC places its excess revenue in a capital account where it is assigned to the members based on how much electricity they use.

Until the lawsuit was filed in 2010, the last time Cobb EMC refunded capital credits to its members was in 1976, when it returned $500,000.

The lawsuit reached a $98 million settlement Feb. 25, which is the largest class-action settlement in Cobb County’s history.

Former county commissioner Butch Thompson, who was a lead petitioner in the case, said it’s a relief to see results after such a long fight.

“I am very pleased. This was something that should have been done years ago,” Thompson said.

He said Cobb EMC is being run by a responsible board now, and he is glad to know his fight was worth it.

“It was worth it to correct a wrong, and as a result of it, the customers now will get back some compensation for the years that they should have,” Thompson said.

In what Cohen called the “first wave” of distributions, a total of $24.6 million, will be mailed out by the end of the week.

The Garden City Group, Inc., which was appointed by Cobb Superior Court to be the claims administrator, will send all the checks by July 31. The company is also in charge of issuing notices, receiving claims and processing the claims related to the settlement. The deadline to file a claim was March 8.

The payments vary, but Cohen said some larger businesses or organizations could get as much as $500,000 with this check.

Payouts under the settlement range from fewer than $100 to several million dollars. Members can choose to receive an immediate payout of a portion of their capital credits or to receive the full amount on a yearly basis over 24 years.

“Each check would depend on how long you’ve been a member, and the patronage capital or capital credit depends on how much power you’ve paid for each year,” Cohen said.

A total of 117,915 claims were submitted, and of those, 89,475 were either duplicate claims or not completed correctly, Cohen said.

Anyone who thinks they should get a check but doesn’t receive one in the next month should check the claim they filed, Cohen said. Those who filed incomplete claims will get a letter in the mail to notify them.

“In many cases, the problem is as simple as inadvertently not selecting a payment option or not signing the claim form they submitted,” Garden City Group said in a statement.

Cohen said those claims will still be accepted once they are completed and returned.

A lawsuit against former Cobb EMC President Dwight Brown is ongoing, but trial dates before Cobb Superior Court Judge Robert Flournoy have not yet been set, said Kim Isaza, the district attorney’s spokeswoman.

Brown was indicted in 2011 on theft and racketeering charges after he was accused of running the electric co-op as a for-profit company, benefiting its executives. He has been out of jail on bond since July of 2011.

Comments-icon Post a Comment
July 29, 2014
My word, did anyone bother to read the article?

First, this was filed on Sunday, July 27. The first 'wave' of checks are expected to be mailed by the end of the week. If you consider Friday to be the end of the week, that would be Aug.1. However, the NEXT SENTENCE says ALL of the checks would be out by July 31. Huh? Are they really just distributing $24.6M now? Does $24.6M, out of a total of about $95M,represent all of the lump-sum payments, and the rest is deferred? That isn't believable.

Secondly, is says 77,000 customers would receive checks, but later it's written that, "A total of 117,915 claims were submitted, and of those, 89,475 were either duplicate claims or not completed correctly." If that is correct, which I doubt, that would be over a 75% failure rate (!) of claims, and leave only 28,000 valid claims.

It would be difficult to write a more garbled article.

Could someone close to the adjudication of this issue tell us the real numbers and dates?
EMC Games
July 29, 2014
Operation Round Up is a public relations disaster for Cobb EMC, implemented under false and misleading conditions.

Phoney Facts
July 29, 2014
@The Facts

Ah yes, you very cleverly manipulate the facts in an attempt to apologize and manipulate the very facts you contend are true, from your point of view.

It is you who cannot cite sources, that is, unless you base your false assertions on your own manipulated facts. And yes, a Google search done on Cobb EMC Round Up will very quickly reveal the truth about Cobb EMC and how it attempted to hide this bogus program from customers.

Admiminstrative and General Expenses you say? Yes, upon view of the supposed facts, it is clear how the books were cooked to cleverly manipulate the Round Up money.

Rate reductions? Again, very clever manipulation of the the facts. These so called rate reductions were carrots thrown out to divert attention away from what is really going on.

Your spin control does not cut it, and that is what your position evidently is, spin control for Cobb EMC.

Yes, I urge folks to educate themselves and do a Google search on Cobb EMC Round Up. That is about the only factual thing you babbled about.

Now, for the big challenge. Explain why Cobb EMC customers accounts were placed into Past Due status, when customers refused to pay the so called VOLUNTARY Round Up charge? And while your at it, explain why this so called VOLUNTARY charge takes up to six months to be removed from a customer's account? Then explain the legal basis for stealing money from customers, without their permission?

The Facts
July 29, 2014
@ Cobb EMC Jokers

Your handle is quite fitting. Your ability to tell jokes is unquestioned by this writer. However, your inability to provide facts is quite obvious. You provide no sources on your information. Therefore it is clear to this writer that your drivel comes directly from your rear end.

As you quite clearly don’t know, Cobb EMC provides its full monthly financials to members on its website. As a non-profit again for the first time since Dwight Brown ended its non-profit status in 2006, the executive compensation paid to Cobb EMC executives is again public record. You obviously have not reviewed the filings or the monthly financials. If you had, you would note that as of the most recent monthly statement available online (May), when compared to last year (2013), Cobb EMC has reduced Administrative & General Expense by 25%.

Funds from Operation Round Up are directed to the Cobb EMC Foundation and all funds collected must go to charity. None of the Operation Round Up funds can go to executive salaries or any other operational expenses as you contend. You can view a full accounting of the funds and specifically what charities received those funds on the Cobb EMC website.

Now you say that the three separate rate reductions are a bald face lie? Well I would ask to see your source on what you contend is true. In a simple Google search I was able to source no less than two articles in the MDJ (One dated 1/7/2014 and one dated 07/02/2013) in which rate reductions were announced. A simple Google search will help you find those articles. It was also announced in Georgia Magazine, of which all Cobb EMC members receive a copy of monthly and they are available online.

As far as the mailings, I can only refer to my own bills since I don’t work for Cobb EMC. I first received an announcement that the Operation Round Up program would begin on Feb. 1, 2014 in my August 2013 bill. It clearly states on page 1 of my bill, right next to the amount due, that the program would begin Feb 1st and it gave a web link to Opt Out if I would like. The same announcement was on my September statement on page 1. In my October, November, December and January bills there were a full page flyer in my bill again announcing the program and giving me the option to opt out. It even provided a “clip off” form to send back with my bill to opt out. I can still view all of my historic bills again on the Cobb EMC website. I also saw several announcements in the news media about the Operation RoundUp program. The Operation Round Up program was also discussed at length at the Cobb EMC annual members meeting last year.

Cobb EMC is clearly trying to hide stuff. Right? Or is it more transparent than ever. If you feel strongly about your accusation and have legitimate questions, I would encourage you to attend a monthly board meeting to get answers to your questions. Oh yes, that is just another thing they are doing at Cobb EMC to provide transparency. You can attend the board meetings now and speak to the board.

Cobb EMC Jokers
July 28, 2014
@The Facts

That's a strange name for someone like yourself who did not post a shred of truth.

The Round Up program is a well contrived program to provide for hidden pay raises for Cobb EMC executives. You say three separate rate reductions? That is a huge bald faced lie. There were never any separate mailings sent to Cobb EMC members, not one, another huge lie. Out of all the junk that is stuffed into the electric bill envelope, perhaps once or twice there were notices about Round Up buried in fine print. What was Cobb EMC trying to hide? Oh, that's right, Cobb EMC was hoping people wouldn't notice the money being stolen from them.

If you are defending Cobb EMC with so called facts, why not say who you are? Your so called facts could not be further from the truth.

How long have you been a Cobb EMC employee?
The Facts
July 28, 2014
Prior to the new board being elected, Cobb EMC regularly made financial contributions to charities in the Cobb community. Those contributions came from member revenue (hidden in the rates charged to bill payers) and the charitable contribution process not done in a transparent manner. In the last board election, candidates for the board and other members expressed concern that these contributions were not being disclosed to the membership. Members had no way of knowing how much of their monthly bill was going to these contributions. Members had no way of opting out of the charitable contributions. Members had no way of receiving a tax deduction for their contribution and members had no way of knowing which charities were receiving the contributions. Those same candidates and members also specifically expressed that they did not want to end the contributions to worthy charities; they just wanted more transparency in the process. Many of those candidates were ultimately elected to the Board of Directors.

Soon after the election, the board resolved to take all of these concerns into consideration and make changes to the charitable contribution program which would ultimately make the program more transparent to the membership. After researching the issue and speaking with people from other electric cooperatives across the country, the directors found that a majority of the 900 electric cooperatives across the county participated in a program called Operation Round Up.

First the board saw it necessary to reset the electric rates charged to the members to reflect only the cost of their electric service. Charitable contributions would be no longer hidden in the rates members were paying for electric service. This contributed to three separate rate reductions over a 14 month period of time.

Cobb EMC initiated the Operation Round Up program this past February after notifying the members for the prior six consecutive billing periods of the upcoming change. Members also received separate mailings to their households with instructions on how a member can opt out if they choose.

Members were for the first time in the history of the cooperative given the opportunity to opt out of the EMC’s charitable giving program. Members also now have the opportunity to take a tax deduction for any contributions they make to the Cobb EMC Foundation through Operation Round Up. In an effort to be more transparent, a full accounting of all funds collected through Operation Round Up and all funds contributed to local charities are now detailed on the Cobb EMC website. Members can now point to a line item on their bill to see how much of their bill is going to charitable contributions.

The board has fulfilled their promise to bring more transparency to the charitable contributions program at Cobb EMC. Members who would like to not participate can now Opt Out.

Bill in Kennesaw
July 27, 2014
I saw that 'round up' nonsense in some media and immediately got hold of them and told them to knock it off AND send me the money back. They credited my account. It was not much but they had no business doing that in the first place.
Honest Abe
July 27, 2014
I have actually been included in a couple of class action settlements before. The most recent one was a check for $5.30. I never got one over $25.00. Don't count your chickens before they hatch!
EMC Theft
July 27, 2014
Check your electric bill. Cobb EMC is stealing money each month from uninformed customers. The theft is called the Round Up charge, and the money is given to organizations which do not represent community values, some with a political orientation.

Oh yeah, Cobb EMC hacks will say it is a voluntary charge. Yeah right, then why are customer accounts being placed in a past due status, when customers refuse to pay this bogus "voluntary" charge?

Call Cobb EMC and demand they remove the illegal Round Up charge from your account. Better continue to check your bill each month though, because it takes many calls to finally get this charge removed from your account.

July 27, 2014
I agree that the procedure used by Cobb EMC to collect these "donations" could be considered theft. All customers were opted IN by the EMC and only by opting out would a customer NOT be charged. The EMC claims that customers were making these donations anyway because the EMC was contributing to charities. The difference is that the money previously contributed by the EMC was taken out of earned income which lowered the net profit of the EMC. With the old method there was less money for the leaders' salaries. Now, by having customers "donate" IN ADDITION to paying their bill it frees up the funds that would have been donated by the EMC. I'd bet that freed-up money is padding some upper management's salary or retirement. Will the EMC address this issue with more than a general statement?
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