Refining PEC Processes: Part 2

A few days ago, I began a four-part series of entries concerning recent developments at Pedernales Electric Cooperative. In my first piece, I covered a recent change to our Director election policy that will be instituted in the 2015 elections. Click HERE to read more about it.

Now my focus will turn to another Director-related topic, which is the Co-op’s policy regarding Director education. As it stands now in the PEC bylaws, each Director is required to attend an initial series of “beginner” courses within his or her first year, to be followed up by further education as necessary to perform a Director’s fiduciary duties. The current policy reads as such:

Article III. Section 2.m “[A Director must] be willing to devote such time and effort to his or her duties as a Director as may be necessary to oversee the Cooperative’s business and affairs including…obtain[ing] the Credentialed Cooperative Director (CCD) designation from NRECA within the first year after election to the Board; [and] attend[ing] state and national association meetings and Director continuing education training as needed to maintain current knowledge and improve awareness of potential risks to the Cooperative.” (Click HERE to read a copy of our current bylaws.)

At our September committee meeting, a bylaw amendment was proposed to change the education requirements for Directors. This amendment would change the time period in which a Director had to complete the initial training from one to two years after being elected. It also would have REQUIRED Directors to “complete two courses, conferences, seminars, or training opportunities each year beginning with the first anniversary after their election to the Board of Directors.” (Click HERE to see the proposed amendment in it’s full form, p. 118)

Almost all of the Directors had some problem with this amendment. One Director didn’t like the idea of extending the time allotted to receive the initial training. She believes that training is crucial in order for a board member to be effective. I had a problem with the resolution from a different angle – and several of my other colleagues on the Board agreed. I’ll go over my objections in a minute, but the major takeaway here is that the end result of our discussions was that we indefinitely tabled the amendment. The bylaws will not be changed to make room for these new Director education requirements.

While this issue ends up being something of a moot point since it didn’t gain traction, I think it’s important to note why several board members and I objected to this resolution. The first question we must ask ourselves is when is it appropriate for the Board of Directors to alter the bylaws in the first place? I remember a gentleman spoke at our annual meeting about this very question. He noted that PEC’s bylaws – the member-owners’ protecting documents – could be changed at anytime and for any reason by the Board. That particular statement troubled me, especially when he further went on to give the example that somewhere along the lines, the bylaws had been altered to change the Co-op’s mission from delivering “lowest cost” power to “competitive[ly] price[d]” power.  Maybe that’s just semantics, but it could amount to much more. After all, “competitive” is quite loose. Competitive with whom?! Lowest cost, on the other hand, is pretty concrete. I would have preferred to keep the language the way it had originally been written.

One could argue – and it’s a fair argument – that Directors must be able to change the by-laws without approval from a majority of members because our Co-op is so large, and we get such low voter turnout.   We might never be able to change anything because we would never get enough participation. There are some who would say that is a GOOD thing – they don’t want the bylaws to be changed! Others would say the policy we have of allowing time for member-review of proposed bylaw changes before the Directors take a vote is plenty thorough to insure members have a chance to voice objections or concerns before the proposed revisions are adopted. I see value in both sides of the argument, but I do believe at the very least there should be some inclination from the membership that changes are desired before we even bring the issue of a bylaw change forward for discussion. Changes should not be made solely at the whims of the Board.

I personally had never heard anything from a member suggesting a desire for Directors to be required to get a minimum of two continuing education courses per year. If anything I had heard several people express concern regarding the costs associated with Director education, namely travel, lodging, and convention fees and expenses. The issue of cost brings me to my second objection to this resolution – what actually is the value of “continuing education” for Directors? I honestly do not know. I haven’t been around long enough, and I haven’t even attended the beginning NRECA Director courses required of first-year PEC board members. I’m set to do that in December, as that is the only time I can get all five courses done without other conflicts arising before my first year on the board expires. (Unfortunately, I will even have to miss the December board meeting in order to get this education – I doubt that this was the intent of the bylaws, and yet we see what can happen when the bylaws are freely changeable. Unforeseen circumstances are bound to arise.)

The bottom line is we must take into account the costs associated with sending board members on Co-op related trips to get education. What do we, the PEC members, get out of our Directors attending? Perhaps they learn a lot of valuable information. Perhaps not. I guess I’ll find out in December. Beyond the initial training, though, I think there is room for us to explore if there is a better way for us to educate our Directors than sending them off to expensive conferences – maybe we could team up with fellow Central Texas Co-ops and bring educators here so that we can cost share and all benefit together. You know, the whole co-ops-helping-co-ops principle. I would love for us as a board to investigate something like that.

I know I still have a lot to learn about PEC and the co-op world in general. I’m asking questions. I’m seeking out answers. I’ve become a student of the energy sector, and I’m enjoying the material tremendously. Since my election in June, and for months leading up to it, I have spent hundreds of hours educating myself on the electric industry and PEC specific matters. I see great value in that type of education, and I know it has made a difference in my performance on the board. As long as I have the privilege of serving you in my capacity as a Board Director for Pedernales Electric, whether or not I’m able to travel to seminars and conferences, I will be committed to educating myself on matters that affect my decision-making abilities.

“Refining PEC Processes:  Part 3 will be out early next week.”

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Refining PEC Processes: Part 1

This entry begins a four part series concerning recent PEC Board activity and discussions. We have a lot happening in our co-op these days. The last few meetings have brought about a number of items that deserve member attention, and I wanted to take the time to bring each of those things into context for you.

Part one of this series will deal with a potentially significant change to our PEC director election process. Part two concerns director education. Part three addresses rates. Part four will focus on our community involvement. With all of the pivotal things happening in the news today – ISIS; Scotland’s failed bid for Independence; the 2014 elections – I wouldn’t expect all of you to be keeping close tabs on the PEC board meetings. However, the topics included in this series of entries to varying degrees affect the health of our co-op, and I wanted you to be made aware of them. (To see the fully recorded board meetings, click here.)

PART ONE:  PEC Board narrowly passes potentially significant modification to Director Election process

PEC has benefitted from a much-improved election process since the Fuelberg era, and yet members and candidates in recent years have presented several shortcomings with the current system. The first shortcoming, of course, deals with the size of the co-op. With over 250,000 eligible member-owners from 24 counties, director-candidates face the enormous task of connecting with a gigantic numerical and geographical body. Having just been through this process myself, I can assure you that the obstacle presented to potential candidates by the sheer size of the PEC membership should not be minimized. Imagine a candidate wants to send a postcard to members reminding them to vote. Conservatively, at $0.10 per mail piece, the cost for one mailing would be $25,000! And that doesn’t even take into consideration postage.   The question has naturally become how PEC can make the election process more manageable for candidates – we want good, qualified people to step forward if they feel the call of service and have talents that would benefit the co-op. They are more likely to do that if they feel they can mount a worthwhile campaign.

We, as a membership, attempted to address this very issue from one angle in the 2014 election through a referendum to change voting from at-large elections to single-member district elections.  (These two links will provide some background on this issue:  Blanco News and PEC 2014 election referendum release.) That referendum, however, did not pass, and members will continue to be called on to vote in each yearly election for every director on the ballot.

Another way to address the manageability issue of director campaigns is to develop a way for candidates to communicate specifically with the 8% or less of the membership that actually participates in the election process. It’s remarkable that with several weeks of online voting and mail-in voting; day-of in person voting; and several communications from the co-op leading up to the election; PEC still sees such a small voter turn out.   In conversations surrounding this problem, an idea recently surfaced to release a list to approved candidates (candidates that have been approved by the qualifications committee) of the members’ names and addresses who voted in the most recent election. It is important to note that the entire membership list is already attainable by anyone seeking to be listed on the ballot so that he or she may verify signatures on the member petitions required to become a candidate. As is the case in the current at-large membership list, co-op members would be able to opt-out of having their names and addresses listed on the recent voter list. Additionally, no information about whom a person voted for would be included on the list.

The way I see it, having this “recent voter list” available for approved candidates can only improve the election process. We give the interested members an opportunity to hear from their potential representatives so they might make more informed decisions, and we spare candidates from having to invest exorbitant amounts of money in order to communicate with them by narrowing the target audience. Someone asked me about a potential invasion of member privacy for those that don’t wish to be contacted, to which I pointed out three main things. 1) We are only releasing addresses, which we already do for the entire membership. This may mean you will receive some extra mail from candidates in May and June every year, but honestly, how many pieces of mail do you receive that you throw away every month anyways? If you don’t care about PEC elections, just chunk it!! 2) The chances that you will receive the mail pieces if you don’t participate in the PEC election process will be quite small since you won’t be on the recent voter list unless you voted in the 2014 elections. 3) I heard from several members following the election that they wish they had more contact from candidates so they could get a better sense of whom to support. If you do care about the director elections and want more information about the people that may represent you on the PEC board, you may now have better access to that information.

We first discussed this potential change at our August committee meeting, and we voted on it at our September regular board meeting. District 5 Director James Oakley, with my support, proposed a resolution to make a recent voter list available to qualified candidates. I seconded the resolution, and it passed with “yes” votes from Director Oakley, Director Perry, Director Scanlon, and myself. The “no” votes came from Director Clement, Director Landaker, and Dr. Cox (who later voted “yes” to the amended Election Policies and Procedures that included this new resolution).

This change will be enacted in the 2015 election cycle, and I believe it will greatly enhance the system we already have in place. It’s the first of many small steps in the right direction that I hope to see as a board member at our co-op.

UPDATE:

***This resolution will be rescinded at our next Board Meeting on October 20th.  A coordinated effort between the dissenting Directors and members concerned with privacy protections at our October 13th Committee meeting caused a shift in Board support for the Recent Voter Participation list.  We will have to go back to the drawing board to try and improve our election process, and I encourage all members to offer opinions on how we can best do that.***

“Refining PEC Processes:  Part 2” is due out later this week.