Pro & Con: Do Georgia's electric co-ops need better oversight?

YES: Members need rights to attend meetings and access information.

By Danny Orrock

This past fall, families and businesses voiced their opinion about a proposed rate increase from Georgia Power. Many wrote their Public Service Commissioners and attended public meetings, while a few even took the time to download filings by the utility. This public involvement was made possible by the laws and rules that require PSC meetings and documents to be open to the public.

With more than 2 million customers, Georgia Power is the largest single electricity provider here. But 4.5 million customers get power from the 42 Electric Membership Corporations (EMCs) in Georgia, whose rates are not regulated by the PSC.

Unlike an investor-owned utility, whose shareholders choose to purchase stock in the utility, an EMC is owned by its members. While Southern Co. shareholders have chosen to buy its stock, EMC members are captive investors simply because of where they live or locate their business. Members can participate in EMC matters by attending the annual meeting and electing the board that steers the organization. If the EMC operates in the black, it is expected to return excess revenue back to members.

EMC boards are distinct in that they do not have to open their meetings to the public. Though the law provides a way for members to access the books and records, there are several exceptions that EMCs can invoke to force a ratepayer to go to court in order to keep an eye on their electric utility.

Fundamental determinations like power rates and capital expenditures should not be made in the dark — if Georgia Power customers can participate, there’s no reason EMC customers shouldn’t have the same opportunity. Transparency benefits members and the utility. The situation at Cobb EMC would likely not be so contentious if members had been allowed to meaningfully engage with the board and management several years ago.

A few simple steps toward openness at EMCs would provide better opportunities for involvement of members:

● Make books, records and any documents related to the business of the EMC available for examination and reproduction by members. Copying costs should be reasonable.

● Require an EMC to respond to a member’s request for information promptly. If the information is not available immediately or not subject to inspection, then the EMC should provide a date when it will be ready or redact sensitive data and explain the specific reason why it will not be provided.

● Allow members access to an up-to-date membership list, a crucial resource when running for EMC board positions. Comprehensive information on elections should be included in bill inserts at least twice before board nominations.

● Members should be allowed to attend board meetings, and written records of meetings should be kept for three years. In instances where 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 conducted before members.

By and large, the EMCs in our state serve their members well. So, EMCs should not have a problem with ensuring that their members are able to be engaged. Georgia Power customers have the right to get involved with the bottom-line utility issues that affect them. It’s time to set the same standard for EMC members.

Danny Orrock is the deputy director for Georgia Watch.

NO: EMCs already face scrutiny from a myriad of government agencies.

By Paul Wood

Common Cause and Georgia Watch have recently jumped on an open records bandwagon suggesting that state law needs changing to make all of Georgia’s non-profit electric cooperatives subject to open records laws intended for state, municipal and county government.

This apparently stems from a pending legal matter at Cobb EMC, but would result in significant changes to law and new regulations for all 42 co-ops.

According to this logic, one person in Georgia under legal scrutiny should lead to amending laws governing the 9 million-plus remaining citizens in the state.

I am puzzled by any suggestion that EMCs have little oversight. Georgia law provides that EMCs are subject to regulation by the PSC to the same extent as Georgia Power, except that the PSC does not “fix” rates, charges and service rules of EMCs. Importantly, the PSC has the full authority to ensure that rates and service rules are non-discriminatory for any individual or class of customers.

EMCs must comply with federal IRS code to maintain our not-for-profit status, which also requires a level of openness and transparency unlike that of most other utilities in the mandatory annual filing of IRS disclosure forms.

EMCs are also subject to several other forms of oversight to protect consumers: They are governed by a local board of directors who are elected by consumer-owners during a meeting open to all member-consumers as required by co-op by-laws every year; and EMCs are subject to strict operational limits imposed by lenders, state and federal laws and regulations, county permitting requirements and municipal franchise laws.

As a federal borrower, EMCs are often held to a more stringent standard for environmental regulations than other utilities.

EMCs are subject to the same statutes as any other co-ops and most businesses in Georgia. The allegations related to Cobb EMC are serious, but those involved deserve a fair trial by jury, just like any other citizen.

Any effort to tarnish the exceptional reputation of the honorable women and men of Georgia’s electric cooperatives should be dismissed.

From Blue Ridge to Cairo, the hard working men and women who work to keep the lights on are admired and respected for the reliable and affordable electricity they provide and for their immeasurable contributions in their communities.

Georgia’s lawmakers and EMC members who know the true spirit of their local co-op have proven to be wise to any “rush to judgment” calls for adding new regulatory burdens on the EMC governance model in a premature and unnecessary fashion.

The EMCs of Georgia do not warrant another layer of overarching and burdensome regulation in these challenging economic times.

I humbly suggest the prevailing sentiment among EMC members is quite the contrary, as demonstrated by some of the highest customer satisfaction ratings in history for EMCs in their delivery of reliable, affordable electricity.

It is certainly my hope that reason and the right to due process will prevail and no legislation will be introduced during the 2011 General Assembly in an attempt to impose additional regulatory burdens upon EMCs that are not imposed on any other electric utility in our state.

Paul Wood is president and CEO of Georgia EMC.