PEC officers hold open house, get feedback

By Raymond V. Whelan and Seth Green • Daily Tribune Staff Writers

MARBLE FALLS - As part of an ongoing effort to gather “a wide variety of opinion” about its service from local members, the Pedernales Electric Cooperative held an open house here Wednesday.

Amidst a rising storm of negative publicity related to a lawsuit filed recently by disgruntled members, PEC officials held the “membership forum” at the Best Western Inn at 1403 U.S. 281 North in Marble Falls.

“It’s great for us to get out and meet people,” said Anne Harvey, PEC information services supervisor.

PEC is based in Johnson City, employs 800 employees and provides electricity to 24 counties covering more than 8,100 square miles in Central Texas. Earlier this week, the not-for-profit group held forums in Austin, Georgetown, Junction, Kyle and Lampasas, and today will hold forums in Cedar Park and Spring Branch, Harvey added.

Besides gaining an opportunity to distribute spiral-shaped energy saving light bulbs, Harvey said PEC officials were holding the forums to hear comments concerning possible changes to the corporation’s by-laws.

The board wants to announce all the planned changes to the bylaws at one time, rather than make piecemeal announcements, she added.

“We’re looking at making decisions definitely by the end of the year, and probably by Thanksgiving,” Harvey said.

Earlier this year, a group of PEC members called “PEC4U” filed a class action lawsuit against the PEC board of directors, advisory directors, general manager and assistant general manager.

The plaintiffs include Joseph Krier, president of the Greater San Antonio Chamber of Commerce.

Local PEC officers under legal fire include Burnet County residents E.B. Price, the PEC vice president and board director; Vi Cloud, board director; and Dr. Stuart Nunnally, an advisory director-at-large.

PEC4U filed suit in the Travis County 200th Judicial District, alleging PEC officials have committed “a variety of wrongful practices” during their administration, management and operation of the utility.

According to its attorneys, PEC4U aims to recover on behalf of its members/owners damages caused by the alleged wrongful practices and to “reform the organization so that it operates democratically, transparently and in the best interests of its members, as originally envisioned by Lyndon Baines Johnson and the founders of PEC.”

The list of alleged wrongful practices by PEC officials includes their acceptance of “excessive” compensation, which the lawsuit claims they did without reducing utility rates or returning revenue to members not needed for “improvement, new construction, depreciation and contingencies.”

PEC4U alleges total compensation received by PEC directors, advisory directors and advisory directors-at-large two years ago was $753,358, plus $164,947 in contributions to employee benefit plans. According to the suit, such an amount was unreasonable, excessive and paid in violation of PEC bylaws, as well as Internal Revenue Code requirements.

The suit claims PEC has invested heavily over the past 17 years in Envision, a software firm located in New Mexico. According to the suit, Envision lost more than $1.3 million in 2005, and three years ago, the firm lost more than $3.5 million against assets valued at more than $2.6 million.

There was no talk of the lawsuit during the forum Wednesday, which was attended by several PEC officials and members.

“I think the forum has been good,” said Nunnally, who attended with Cloud. “We have received constructive comments across the board. For the most part, they have been very positive, and we’ll take all the comments into consideration.”

Nunnally declined to discuss the suit. Furthermore, he said, he received no comments about the lawsuit from members during the forum.

As far as he knew, no trial date has been set for the lawsuit, Nunnally said.

“That is strictly in the judge’s hands,” he added. “I don’t think any of us know the time frame for that.”

Cloud did not comment on specific planned changes to the bylaws, which information at the forum indicated the board has been working on revising since March 2006.

“We’ve had a good turnout,” Cloud said. “We want to get all the feedback we can.”

Like Nunnally, Cloud declined to discuss the lawsuit.

“We’re not really supposed to talk about it, because it is still in litigation,” Cloud said. “I don’t think it has merit. We’re going to fight it in the courtroom. We’re not going to do it in the press.”

John Worrall from Round Mountain, one of the PEC4U members suing PEC, attended the forum. Like the PEC directors, he declined to address the lawsuit.

“They (the lawyers) just want me to shut my yapper,” Worrall joked.

Judging from steveral responses, there are some mixed feelings among rank-and-file members about PEC administration, operations, management and voting procedures.

“They (PEC officers) do a great job, and they are very supportive of the community,” said Kim Grebe, a PEC member and Marble Falls Elementary School teacher. “They donate money to different organizations each year, like the Boys & Girls clubs. When you look at all that they do, I think they’re very modestly compensated, especially when you look at private utility companies - some of those folks are making millions of dollars.”

Barbara Martin, a hotel clerk from Marble Falls, said she had no complaints about PEC service.

“Their service is good,” Martin said. “When I have a problem, they’re on it. But I’m curious like everybody else. What’s the deal with their big retirement pay if it’s supposed to be a not-for-profit organization? They send you a letter, but who really gets to vote?”

Some attendees believed the forums could bode well for future relations between PEC and its members.

“From what I gather, I think it’s a great thing,” said Pattie Teague. “It’s hard to get people to listen; I think people will have more say.”

Teague’s mother, Doris Jordan, agreed.

“I think you’ll see more and more benefits,” she said. “There’s a closeness there.”

Others, however, did not share that optimism.

“We need to get the proxies (votes) together, give them to (state Sen. Troy) Fraser and see if we can get around these board members picking board members,” said Mary Martin. “I knew this was a rip-off a long time ago. They say ‘Here’s the list,’ and you can’t vote for anybody but who they tell you.”

And, some members did not think the forums would bring about any meaningful change to the PEC board or its bylaws.

“It’s too engrained,” said Dale Fixsen.

raymond@thepicayune.com

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PEC officers hold open house, get feedback