PRC Schedules Preliminary Hearing for KCEC

The NEW MEXICO PUBLIC REGULATION COMMISSION OPEN MEETING CASE MANAGEMENT MEETING on Wednesday, January 20, 2016 at 9:30 a.m has published its agenda and item 6 will feature the Kit Carson Electric Cooperative request for a rate hearing. According to briefs from the Coop’s high-powered law firm, the member-owned Coop claims protesters have not attained the necessary response to mandate a “hearing” on the fiscal issues. Tentatively, it is believed that the PRC commissioners, upon recommendations of their staff, will decide whether to later hold formal hearings. The meeting will be held at the PERA Building, 4th Floor Hearing Room 1120 Paseo de Peralta, Santa Fe, NM 87501.

Among other allegations, protesters have raised concerns that the rate increase unfairly targets a majority of residential users and creates a regressive rate structure: the poor and the frugal, who engage in using less energy, will be charged at disproportionately higher rates.

Further, protesters have pointed out that the Coop’s debt and debt service has unfairly depleted the Coop’s ability to maintain fair rates.

Protesters also claim that mismanagement of “diversification,” or engaging in business ventures outside the mission of the historic REA mandate, has caused the Coop to lose money: Call Center, Command Center, Propane division, Internet division, and Broadband. Indeed, by the Coop’s own admission, KCEC has subsidized “diversification” with revenue and resources from the electric side.

The Coop’s announced business plan seems to offer little more than wishful thinking about the future, which plan has already been undermined by a record of failure and cash losses, according to the Coop’s own figures, studies, and lack of will to liquidate losing venture. For example, the sixty-million dollar federal loan and grant Broadband project (fiber-optic) has few subscribers, and is marginally effective due to new smart phone technology. Meanwhile Trustees say they will need another $5 or $10 million to complete the failing Broadband project.

Though the eleven elected trustees are supposed to supervise management, the Coop executives have undermined oversight by paying trustees meeting fees and providing travel allowances or hiring relatives of the compliant board. As well the Coop has engaged in creating politically “gerrymandered” districts and otherwise engaged in disenfranchising the members by refusing to encourage members to vote via mail or email.

Despite its access to web design tools and the Internet, the Coop refuses to engage in posting financial information on the Web or to engage in transparent practices.

During the protest period, Coop employees and trustees at the direction of the CEO have engaged in a pattern of intimidation and misinformation aimed at members who ha have business with the Coop or relatives employed by the Coop, according to members.

Internal Coop hiring practices and poor cash controls have induced employees to steal money and abscond without being punished per the $200,000 daylight robbery of a couple of years ago.

The PRC itself, due to the Coop’s spendthrift ways, is put in an extremely difficult position. Due to the Coop’s near insolvency and spendthrift behavior, a rate increase is seen as throwing gasoline on the fire. On the other hand without a rate increase, the Coop will be forced into insolvency, receivership, or shut down. Poor monitoring of federal loans and grants by USDA/RUS has encouraged abuses that has led to insolvency. The overseers of USDA/RUS should also be called before the PRC to answer for their negligence and explain why they allowed the Coop to run amok.

Taos Friction believes the PRC and the USDA/RUS need to appoint a federal monitor and draw up a kind of “consent agreement” to preserve the Coop from poor management and the lack of Trustee oversight.