Take Back Washington EMC
More legal action by Cobb EMC members against co-op
March 19, 2013
Former and current Cobb EMC owner/members are still waiting on capital dispersements from the co-op following years of court battles to regain control of the company from senior management and former board members. According to the Marietta Daily Journal, current capital credit accounts total $182.5M, and capital credit accounts for former members total $134.5M.
The paper quotes attorneys at Pierce and Gabriel in their filings, “A cooperative is by definition a business that returns its margins to the members through capital credits allocations and retirements. If an electric cooperative fails to revolve its equity and thereby develops a class of equity that is essentially permanent, it is no longer a cooperative within the meaning of this definition.”
While members wait for a decision, either through the courts or mediation, the indictments against former CEO Dwight Brown continue through a lengthy legal process. Brown was indicted once on 31 charges which included theft, false statements, and RICO violations (racketeering). Those were dismissed, but the State Supreme Court will review that dismissal from the lower court.
After the dismissal of the original 31 indictments, Brown was indicted again, but with an additional four charges for threating and influencing witnesses, bringing the total indictments against him to 35 different counts.
Following a forensic audit contracted by a new board of directors at the co-op, some Cobb owner/members have asked if other legal charges might be made as a result of findings which could include other senior management and former board members.
Legislation protects EMC customers across Georgia
Backroom deals at EMCs have already cost customers
March 6, 2013
ATLANTA – A new bill filed in the Georgia House of Representatives could protect millions of Georgians from unnecessary electricity rate increases by limiting the ability of Georgia’s Electric Membership Cooperatives (EMCs) to make unscrutinized sweetheart deals with power providers, says Georgians for Smart Energy, a coalition of consumer advocacy and environmental groups. House Bill 500, introduced by State Representative Karla Drenner (D-Avondale Estates), would require the Georgia Public Service Commission to approve long-term power purchase agreement contracts between wholesale power producers and Georgia’s Electric Membership Cooperatives.
“Cobb EMC members were forced to take their own co-op to court in order to return decision making and open door operations to the customer-members who own the company,” said Washington EMC member Cathy Mayberry. “EMC customers across Georgia often find ourselves locked out of EMC decision-making by policies which prevent attendance at board meetings, withhold meeting minutes and annual financial statements from members, and which allow power purchasing decisions to be made outside of competitive bidding processes. These practices are hurting the pocketbooks of rural EMC members.”
Before closed-door operations officially ended at Cobb EMC, a sweetheart deal was made which cost customers at ten Georgia EMCs over $25 million. The contract, between EMC members of the Power4Georgians conglomerate and former Cobb Energy affiliate Allied Energy Services, put EMC ratepayers on the hook for the development of two $2.1 billion coal-fired power plants. All ten EMCs eventually cut funding for the project after information about the high cost of the proposed projects became public, and revelations of murky financial dealings led to the indictment of Cobb Energy CEO Dwight Brown.
"Georgia's EMCs have shown that they can't be trusted to allow necessary member oversight in their decision making. This bill aids EMC members by ensuring that expensive, long-term contracts are reviewed by the Public Service Commission. This way, members will know that their pocketbooks are being protected," says Don Dressel, a Cobb EMC member.
Rep Mack Jackson, 404,656.0314, and Rep Rusty Kidd 404.656.0202 represent the WEMC service area in the Georgia House. A full list of House members is herehttp://www.house.ga.gov/Representatives/en-US/HouseMembersList.aspx
Cobb EMC leads among Georgia EMCs for transparency. Why can't WASH EMC follow their lead?
Febraury 22, 2013
Cobb EMC is celebrating 75 years of service this year, and issued a wide ranging press release on how the Board of Directors and Senior Management are working to "get Cobb EMC back to a clean slate."
Board Chair Ed Crowell said, “Priority one was to move Cobb EMC back to traditional cooperative principles and operations,” said Ed Crowell, Board chairman. “We rolled up our sleeves and developed a list of goals that would get us there, step-by-step.”
Better financial decisions
Some of Cobb EMC's new practices include this, "Cobb EMC’s for-profit arm, Cobb Energy, was dissolved in 2011, setting the stage for a series of structural changes at the cooperative. All employees and assets were transferred from Cobb Energy back to Cobb EMC. Remaining Cobb Energy companies and ventures were then sold or discontinued, including membership in Power4Georgians and participation in the Plant Washington coal plant project."
Cobb EMC Chief Operating Officer David Johnson said, "We’ve gotten back into the business – our core business – of distributing reliable electric energy. No more irrelevant business strategies."
Member approved bylaws
The Washington EMC Board of Directors can change the co-op's bylaws at any time they choose (with the exception of how Directors are elected). Cobb EMC has adopted new bylaws which were approved by the members during their annual meeting last year.
“We're 10 meetings in, and we have a new set of bylaws," said Rudy Underwood, chair of the Governance Committee of Cobb EMC’s board of directors. “We've made great strides toward accountability, but we're not done.”
Cobb EMC has taken several steps to increase member engagement and sharing of information. Cobb EMC said in its press release, "Every few months, directors host town hall meetings to meet with members in a personal, open discussion setting. But perhaps the greatest example of change was Cobb EMC’s first monthly open board meeting in September 2012."
Decisions made to improve co-op bottom line
Cobb EMC has dramatically changed several processes which impact owner/member rates. Board Chair Ed Crowell said, "To keep future costs down for members, Cobb EMC also issued an RFP for power supply and replacement of capacity and energy starting in 2016. Additionally, the board recently approved joining Touchstone Energy, a cooperative of co-ops across the nation that share resources to bring savings and discounts to members.
“In the co-op’s 75th anniversary year, we want to remind people what it means to be a member, and we’re working to provide added value that shows the cooperative difference,” said Crowell.
These changes at Cobb EMC beg the question that Washington EMC owner/members have been raising for years. Why can't our co-op operate in an open and transparent manner the way it was intended to operate, and in fact has in the past. What are the Washington EMC Board of Directors and Senior Management afraid the co-op members, who also own the co-op, will learn or ask?
(emphasis added to Cobb EMC quotes)
Power4Georgians loses another court battle
January 9, 2013
Power4Georgians has suffered yet another defeat in court. Dean Alford, Plant Washington's developer, along with five other proposed coal plants, lost in their efforts to require the Environmental Protection Agency (EPA) to finalize revised mercury and air toxins regulations before March.
Bloomberg BNA reports that the developers can't secure financing for their projects until the rule is finalized. Project developers must also beat an April 12, 2013 deadline concerning carbon pollution regulations.
The EPA, in an earlier filing in the spring of 2012, clearly stated that Plant Washington did not have final permits when the carbon regulations were released, which means that the EPA may very well not include the facility in the list of projects exempt from carbon controls.
Alford has not included carbon controls in any modeling for the project. Conservative estimates for construction are just below $4B now, and that figure does not include carbon emission controls.
WEMC members and Washington County taxpayers can't afford a dirty coal plant
October 9, 2012
For over five years, citizens in Washington County, and Washington EMC members, have opposed Plant Washington. The arguments against this proposed coal plant are numerous, and supported by health, science, financial, economic, and faith leaders.
Plant Washington developer Dean Alford is now attempting to bully a leader among plant opponents with a law suit. In fact, the pressure mounted on local citizens has been so great that a local business owner chose to remove a billboard critical of Alford.
The purpose of sharing information about the numerous risks involved in this coal plant, and the verified business track record of its developer, are part of the efforts by local citizens to share information. Our intent isn’t to get into a legal battle over First Amendment Rights and freedom of expression, but instead to continue the focus on the known hazards to our community posed by Plant Washington.
Dean Alford wants to put Washington County taxpayers at risk for his dirty coal plant with bonds issued through the county’s Public Facilities Authority, bonds that taxpayers won’t even have a chance to vote on. He wants our money, but Alford’s companies have had a history of unpaid taxes in three states!
Alford has already gotten $1M of Washington EMC’s money. His companies have had several business liens (Uniform Commercial Code) across several states. Does lots of borrowed money sound like a good way to do business?
Alford was part of Cobb Energy, a controversial for-profit utility company that his business associate and former Cobb EMC CEO Dwight Brown, together with the former Cobb EMC Board of Directors, created to handle daily operations of Cobb EMC. The Cobb Energy subsidiaries Alford oversaw lost $11M of the co-op members’ money in a five year period. Alford also owned $750,000 in preferred stock in Cobb Energy.
Dwight Brown filed the organizational papers to create the Power4Georgians (P4G). Alford, who worked for Brown at Cobb Energy and has been his partner in private business, was given a no-bid contract to build Plant Washington, an 850 MW coal plant. Alford later bought Allied Energy Services at a fraction of the $11M loss the co-op took for subsidiaries Alford managed for Cobb Energy, including the Allied Energy Services venture. (see page 10)
Alford testified in court that he has never constructed a coal plant. Since the announcement in January 2008, six of the original 10 EMCs have dropped the project. With Brown no longer leading Cobb EMC, and new Directors, the co-op withdrew from Alford’s coal plant in January 2012. Cobb EMC spent approximately $14M on Power4Georgians and Plant Washington. In March of this year Cobb EMC wrote off a $4.3M loss on the project. There are only four EMCs left supporting Plant Washington now: Snapping Shoals EMC, Central Georgia EMC, Washington EMC (WEMC), and Upson EMC .
In the spring of 2012, Alford announced that former Xcel Energy CEO Tim Taylor was joining P4G. Under Taylor's leadership, Xcel was responsible for multi-million dollar rate increase request to the Public Utilities Commission in Colorado in August 2009 to fund construction of a coal-fired unit. The company had already received a $112.2M rate increase in May of that year.
Alford’s project has seen serious setbacks just since January 2012:
1. Cobb EMC’s withdrawal from Plant Washington
2. the finalization of rigorous clean air rules
3. the announcement of proposed carbon pollution rules
As in the past, the arguments in opposition to Plant Washington continue to strengthen. Consider the impact Plant Washington will have on our health, our air, our water, farming, tax dollars, EMC electric bill rates, increasing costs of coal, and wildlife. Plant Washington just doesn’t make good sense.
Don’t let a fancy suit-wearing business man from Atlanta take another dime from our pockets. Tell our Washington County Commissioners and Washington EMC we don’t want our money going to Dean Alford’s coal plant.