Kit Carson PRC Rate Increases

Nov. 12 is the Deadline for filing protests with the PRC. Check with Linda Bence or Jerome Lucero if you need assistance. Phone Trustee  Francis Cordova at 770-1141 to let him know how you feel.

As KCEC members and readers of this site know, the Coop has requested a rate increase. The proposals and forms are confusing. Below, this layman has filled out one of the forms as an example, as best he can.

Regardless, my knowledge of the complex and highly regulated utility environment is limited. At the same time, I reported on Coop practices for a decade as a journalist. Trustees and management have expanded the Coop mission beyond the REA mandate, losing Coop dollars in the process, manipulating elections to control the political majority, and traveled excessively—according to Coop documents and reports from the trustees themselves at meetings and off the record. And trustees have regularly hidden the truth from the public or denied what audits reveal in terms of losses for years or until last summer when they began preparing for the request for a rate increase. Members should ask trustees to post simplified monthly summaries of profits and losses, per diem paid, travel expenses incurred on their web site.

By the way, the Coop passed a resolution on 30 Jan. 2007 upping the combined debt limit to $130 million. The resolution was signed by board secretary Manuel Medina. Currently, the Coop owes something in the neighborhood of $64 million plus another $19 million for Broadband.

Here’s part of the PRC form and the answers that I will submit.

1. A clear concise statement of the effect of the proposed rate or rates on you.

According to KCEC’s proposed rate increase, my access fees will go up 105%, meaning my four meters will add costs of $42 more per month. Three meters, including one for a small apt. one for a shop, and one for a security light and well will cost an extra 4% to 17% for energy usage, according to the Coop’s estimate.One meter will probably break even in terms of usage.

So the annual increase will cost this member an estimated $500 for meter access charges and an estimated $300 for energy charges—though I haven’t added up all the monthly bills at this time. The Coop should total costs for each member, based on last year’s energy usage and tell members exactly what to expect. KCEC has staff, computers, and capability.

I estimate that the Coop’s rate increases will cost me $800 a year or $66.66 per month.

2. A clear and concise state of the specific grounds upon which you believe the proposed rate or rates are unjust, unreasonable or otherwise unlawful.

The Coop has not announced new policies reducing Board of Trustee per diem and management expenses. The electric ratepayers are on the hook for collateralizing loans for speculative loans to expand electricity infrastructure and non-electricity related ventures in Propane, Internet, Broadband, Command Center, and Call Center initiatives. The 11 trustees have gerrymandered districts so that members don’t receive equal representation. And trustees follow a capricious and arbitrary policy when it comes to unnecessary travel. Cost cutting should precede requests for rate increases.

3. A brief description of your efforts to resolve your objections directly with the Regulation.

I have met with the CEO, attended board meetings, and raised the issues in the press. The board, at one time or another, has misrepresented its losses in non-electric ventures, allowed cost over-runs on non-competitive contracts, and continues to follow a policy of non-transparency when it comes to travel and per diem. The board, according to its tax returns has spent as much as $100,000 on a single annual meeting. Coop documents indicate that Trustees spent about $35,000 for a single week in Las Vegas, while attending a NRECA meeting (in 2007).

In Aug. of 2010, the board gave the CEO a raise, voted for an electric rate increase in Sept. and followed that up with a reported trip by six trustees to visit Arkansas for a Broadband meeting. Each new venture at the Coop has become an excuse to travel and collect per diem pay. According to KCEC, they have lost about $5 million in Propane, created a second board to operate that division. But despite the fancy accounting, the electric ratepayers are on the hook for the loans and expenses of losing ventures in Propane, Internet, etc.

4. A clear and concise statement of the relief you want from the Commission (i.e. what you want the Commission to do regarding the rate proposal).

As a member, I would like the KCEC to clarify the estimated costs of an increase in electric rates in dollars and cents—not percentages—for the year. Further, the KCEC should honestly clarify the total amounts due in loans for the electric side and side ventures because the electric rate payers own the collateral and revenue stream that collateralize all the loans. Also, the board and management should present membership with a plan to introduce fair elections–mail in ballots and redistricting–to create equal representation for members. The Trustees and management should summarize cost cutting measures for reducing executive expenses—not policies but by-law changes because they are incapable of policing themselves.

All of the issues raised above should be clarified to members before the PRC acts on the KCEC request for a rate increase.

KCEC Voting Facts and Figures

(The figures below are based on Coop reports about two years old.)

District 1, Taos, represented by Francis Cordova, Toby Martinez, Manuel Medina, and Luisa Mylet, has 17, 113 meters and 12,469 eligible voting members. So each trustee represents about 3,100 members. (Almost 2,000 members voted in the last election.)

District 2, Questa and Red River, represented by Virgil Martinez and Bobby Ortega, have 3,634 meters and about 2,726 voting members. So each trustee represents about 1,376 members.

District 3, Ojo Caliente, represented by Art Rodarte, has 1,640 meters and 1,239 eligible voting members. Trustees estimate that Art, the Tri-State Rep, makes an easy 40,000 grand for representing 1,239 members.

District 4, Peñasco Valley, represented by Chris Duran and Ambrose Mascarenas, has 2,057 meters and 1,619 eligible voting members. Each trustee represents 809.5 voters plus one cheerleader.

District 5, Angel Fire-Eagle Nest, represented by Jerry Smith and Bruce Jassman, has 4,714 meters and 3,918 voting members. Each trustee represents 1,959 members. (74 members voted in the last election.)

The one man, one vote rule applies to political subdivisions but, apparently, not to the Coop. 21,971 members are eligible to vote. Yet, the elected officers represent only 6,763 members.

A Reader Writes:

Here’s another example, in our case:

1. The proposed rates are neutral as proposed for me.  The proposed rates negatively affect our planned installation of a PV grid tie system.
2. The proposed rates are heavily biased against small electricity users and benefit high volume users.  This rate structure does not encourage conservation.  Also the information sent to us by KCE never shows the impact for each account or the total cost per kilowatt-hr.
3. I have emailed Luis Reyes and written to the local press suggesting many alternatives that would better serve the co-op owners
4. I request that the PRC instruct KCE to re-design the rate structure to accomplish these objectives:
   1. provide a conservation incentive
   2. show the co-op owners that expenses have been reduced before increasing rates
   3. show all rate proposals in cents per kilowatt-hr, total cost to the account
   4. promote PV grid tie investments to achieve a higher level of renewable energy
   5. show how KCE’s other ventures affect rates
   6. maintain a viable and reliable utility service for electricity to the co-op owners as prioity one.

Thx, G.