Taos Knight rider attacks KCEC Activists and PRC Order

The final PRC order of Sept. 20, 2011, regarding KCEC’s Broadband project, states: “Unless Kit Carson fully justifies a decision to not reorganize its Internet and broadband businesses in its Report, the Commission will at that time initiate an investigation to determine whether that reorganization should be required as a matter of protecting Kit Carson’s utility customers from that liability. “

Now the PRC has appointed a hearing officer to investigate the Coop doings re: the Broadband project. The officer will take testimony in Taos and report back re: findings of fact and conclusions of law regarding KCEC’s subsequent reasons for denying the PRC order–due to protests by members, concerned about the Coop’s potential insolvency.

The PRC approved a KCEC electric rate increase last year. Despite the bump the Coop is entering its third straight year of performing below minimum tiers or margins mandated by its RUS banker, according to documents filed by the KCEC. The Coop is in technical default on their loans.

According to KCEC’s reports filed with the PRC, the Coop has lost some $10 million on outside ventures like Propane and on Internet services during the last decade. The Coop has also stuck members with a loan of about $3 million for the so-called shell of a “Command Center” that no governmental entity currently supports.

Friction sources say that Coop debt, when KCEC draws down its RUS—USDA loan for the Broadband project, will increase from about $73 million today to $93 million in a few months.

Some current trustees at the Coop also say they did not know that RUS allegedly demanded 100% of the electric side assets to collateralize the  federal grant and loan of $60 million for Broadband installation.

Trustees, CEO Reyes, and their supporters have presented the membership with affirmations of belief, as reiterated in Mr. Knight’s letter below, statements couched in the language of public relations but without a rational business “plan.”

Current trustees say, off the record, that the Coop will seek a rate increase in 2014—after its TRI-state G&T provider gets a another rate increase in 2013. Your electricity rates are going up and up even as the Coop’s revenues are dropping.

We activists support the PRC’s investigation of KCEC, per its order and responsibility to the public. Currently, the County is undergoing a mandated federal audit of the housing authority program due to financial malfeasance. Unlike Mr. Knight (letter below) we have seen elected officials at the Town, County, and Coop play fast and loose with the public’s money and have less faith in the miracle of technology–as managed by the Coop.

We support Broadband in general but believe private industry like Century Link, Taos Net, Comcast, smart phones, etc. or an independent entity, per the PRC order, can better manage the local infrastructure for the new age information and entertainment era.

If Broadband is as promising as its supporters say, why did RUS demand that KCEC collateralize the $20 million loan with its electric side assets? And why do the representatives of RUS and the Coop refuse to return phone calls or allow members to speak up in opposition to financial folly at monthly board meetings?

Here’s a purported copy of Mr. Knight’s night-rider email, attacking activists and supporting the good old boys.

Dear Friends,

I call them the “TAOS CABAL”. The tactics remind me of the “tea party”. This group of individuals (and I’m not afraid to name, names – Gene Sanchez, Jeff Northrup, Bill Whaley, Arsenio Cordova, Jerome Lucero, Linda Bence, Andrew Chavez, and others) who are all CAVE people in my opinion (Citizens against virtually everything), have been on a rampage against KCEC and it’s management. Well, this time they have gone too far!

Please read the following: http://www.wired.com/business/2011/07/rural-fiber-internet/ LINK as it describes the program that is under attack. Following is the legal description of the grant won by KCEC:

Grantor: RUS-BIP Grant No. 5392

Kit Carson Electric Cooperative in Northern New Mexico intends to build a last mile, open access, fiber network to bring broadband to unserved and underserved residents, including Native American Pueblos, community anchor institutions and critical community facilities; to enable Smart Grid technology for sustainable energy development; and to create new jobs and foster economic development. The network will create a 2,400-mile broadband network, which will connect approximately 20,500 households, 3,600 businesses, 183 “critical community institutions” and two American Indian pueblos.

I have also attached a plea (see attached PDF) from the Taos Chamber of Commerce addressing the same subject.

I may not personally agree with all of the decisions that KCEC has made, but the “CABAL” which has taken 137 signatures from citizens of Taos (there are over 30,000 rate payers) hoping to have the Public Regulation Commission take action that would jeopardize a stimulus award that is crucial to the long term growth of our community and its future, have gone too far. Not to mention the 200 jobs (so crucially important) that potentially could be lost.

Do not believe for a moment that any of these folks have your interests at heart. It is a vendetta that must be stopped. Please call or email the Public Regulation officials outlined in the chamber letter. Thank you for your time and attention. Feel free to call me if you wish to discuss any of the above.

Billy

575-770-1520

(Editor’s Note: KCEC doesn’t have 30,000 ratepayers, according to the Coop’s own figures. Further, the link referred to above touches on an article from “Wired,” a magazine that promotes dot.com technology. The economic development referred to was stimulated not by Broadband but by oil. Here’s a direct quote:

“And while rural America might be losing population generally, that’s not the case with New Town, North Dakota, which sits atop the Bakken oil shale formation, a booming new oil field near New Town. That oil rush, made possible by new oil-extraction technology, has brought in thousands of new residents and big businesses, all hungry for fast Internet connections and even new phone lines — a rarity in the telecom world. New Town alone has 500 miles of fiber connections.”)

(Deeper background)

Those who supported the Walmart Super Store, like “little Ramon,” a few years ago characterized activists and opponents as “citizens against everything” (CAVE). Opponents and activists of TAWSS (Taosenos Against Walmart Super Store),  then included Hispano Chamber members CEO Luis Reyes, DMC’s Darren Cordova, the “Cabal,”  and Mr. Knight, as I remember. Indeed Mr. Knight once wrote an article deploring the “good old boy system” in El Norte. Apparently, the former Green Party progressive, couldn’t “beat ‘em so he joined them”–becoming one with CEO Reyes and Mayor Cordova as well as a commentator on DMC Broadcasting.

The so-called “Cabal” and members of “CAVE,” mentioned above in Mr. Knight’s s email have questioned the town’s no bid public projects costing millions (swimming pool, affordable housing scandal), abusive travel and per diem reimbursements by trustees as well as the millions of dollars in losses, due to mismanagement at the Coop.

Contrary to Mr. Knight’s irresponsible allegations, most of the same activists supported the passage of public bonds for investments in the construction of the County Complex and the capital improvements to TMS. They were instrumental behind the scenes in forming a unique collaboration between the town and the schools that resulted in the construction of the ECO Park.

Typically, like his banker kin on Wall Street and the trustees he supports at KCEC, Mr. Knight of Knight Financial Limited, allegedly  believes that  federal loans and bailouts, collateralized by taxpayer-member revenue, should be used for speculative ventures that threaten the very assets of the housing market–not to mention the solvency of the once proud and prudent local Coop.

The community hasn’t forgotten that Mr. Knight’s was ousted as chair of the Taos County Democratic Party, during controversial precinct elections a few years ago. His opponents said he paid more attention to elitist outsiders and issues than local mainstream demos, who elected him to office. He even endorsed demo friends, contrary to local custom, who ran in the “nonpartisan” school board race but they lost, like he did.

Billy, who has swallowed the bitter pill of defeat, now, like Commissioner Andrew Chavez today at the County, has embarked on a scorched earth policy. In an effort to “join ’em” he has endorsed irresponsible management practices.

Billy, we hardly knew you.