KCEC Buys “Pig in a Poke”
Since June 30, 2016 the local Coop has taken over responsibility for the transmission of electric power from “somewhere.” The power, now generated by a deal with GREP i.e. Guzman Renewable Energy Partners (Guzman), an energy broker and financier has only one other customer, the municipality of Aztec, New Mexico. But Guzman has zero generating plants and no experience in transmission. KCEC is responsible for “maintenance: of local transmission lines and substations in the Taos area.
Apparently, Guzman (no relation to El Chapo Guzman) buys and sells energy on the market and financed KCEC’s exit from Tri-State Generation and Transmission, now a 43-member cooperative. The KCEC CEO and Board of Trustees in their wisdom claim that the cost of the Tri-State buy-out of $37 million doesn’t exist on the KCEC books. But they will pay off the $37 million contract by buying cheap from Guzman and selling high to members plus make $13 million over ten years in the process, according to a press release.
Why does the Coop need a rate increase that penalizes conservationists and low-income users of electricity? Why did the Coop change the rules in the middle of a PRC hearing? How much more will it cost the Coop to maintain “Transmission” lines and “sub-stations” acquired from Tri-State since current KCEC employees are trained for distribution lines, not the more demanding maintenance of G&T technology. We’re only asking.
The history of KCEC business decisions, flying by a wing and a prayer, has been disappointing. The Call Center and the Command Center are under-used and mostly empty rental properties. Two or three ghostly KCEC or Broadband employees occupy the cavernous office buildings, which hardly justifies the investment of four or five million dollars plus interest. The Command Center costs members some $118,000 a year.
Apparently the Coop wrote off $5 million in Propane investment, and suffered other unmentionable losses in that venture. Kit Carson Internet services lost money for years. The $64 million dollar Broadband project, thanks to a federal grant and loan, is years behind schedule and over budget. According to news reports, the Coop needs some $6 or $8 million to complete the project, which has maybe a couple thousand customers, they say.
Meanwhile, the Coop’s sun worshippers could be in trouble despite celebrating Tri-State’s exit and the removal of the renewable energy cap. According to PRC staff, the Coop has allegedly violated state law and regulations by creating a “special class” of consumers for solar. You got it: the membership or the many are paying for the privileges of a few, who benefit from solar arrays and solar power like Taos Municipal Schools and others. Maybe yes, maybe not.
The PRC staff, composed of experts in the economy and administration of utility law say the Coop has also over estimated expenses, due to its muddled accounting re: diversification due to consolidated financials and recommended the Coop reduce its request for a rate increase. The staff doesn’t say the Coop is trying to raise rates to borrow more money to pay for losses in diversification but that’s what the interveners think.
The staff may consider a motion to vacate the current PRC rate hearings due to KCEC’s having changed the rules in the middle of the process with the Tri-State buyout. The current rate request increase is based on Tri-State rates, not the Guzman deal. Now the figures are in flux.
Despite KCEC’s claims that the “base kilowatt” charges will remain constant for ten years in the new deal, according to news reports, there is nothing in the press release reports about the cost of fuel. The automatic pass through or “Fuel and Purchased Power Cost Adjustment Clause” is where the Coop sticks it to you when their power supplier sticks it to them. If Guzman buys big on the spot market when prices are high you’ll probably see a big hike in your “fuel adjustment” bill.
Can you say Enron?
Who are these guys? You can’t find out much on the web about this new company. But we know a lot about the Trustees. They are playing fast and loose with the member’s money. Capital Credits have been retained and spent to subsidize the “Energizer Bunny’s” bets on five diversification projects, none of which has made a profit or return on the members’ investment in the last fifteen years.
Now the Trustees are doubling down on Guzman. Though the Trustees know a great deal about “Travel,” they know little or nothing about business as indicated by the KCEC “losers.” Who is Guzman?
Flavio says, “Buy your own solar panels and energy efficient appliances.” Prepare to sustain your own home like one of those in the Earthship Community. Eliminate the Energizer Bunny who’d rather preach nonsense than inform or tell you the facts or work in a transparent manner to benefit the members. Recently, the members voted against Coop doings with their feet and ignored the annual meeting. I’d say the members were disgusted then and are more disgusted today.
Somebody’s getting rich but it ain’t the members. The Coop just nosedived into ever-deeper indebtedness. What is the color of your porcine friend, Luis?