Home Uncategorized New rules coming for electric co-ops

New rules coming for electric co-ops

Foster Campbell

The ongoing saga between the Louisiana Public Service Commission and electric cooperatives throughout the state took a regulatory turn Thursday, according to report published in The (Baton Rouge) Advocate.

State regulators would eliminate lavish perks – such as health insurance and extravagant travel – for board directors who are supposed to be unpaid for overseeing the cooperatives that provide electricity to rural areas of Louisiana, according to rules that were being drafted, the article read.

The 96 board members aren’t legally allowed to receive a salary, but in 2017 alone, they were compensated – $26,250 on average, though some individual directors made $50,000 or more. They received compensation for travel, often to exotic locales, and blanket recompense that averaged up to $511 a day, depending on the co-op, for directors to attend coop meetings.

“There is a lot of abuse going on around the state,” Public Service Commissioner Foster Campbell told the Minden Press-Herald Friday. “I didn’t know all this stuff was going on.”

Health insurance – paid for by the customers of rural electric cooperatives – accounted for about half the $2.5 million received by the volunteer board members in 2017, according to a financial accounting the commission ordered before drafting new rules that would amount to the most sweeping changes in how the co-ops operate since the 1940s.
Campbell said, Claiborne Electric Cooperative, which serves part of Webster Parish was one of the reasons for the new rules. “Of all the co-ops in the state, there’s ten of them, the worst abuse and most expense is Claiborne.”

Claiborne Electric did not respond to an email for comment.

Campbell said most involved are on board with the rules changes and he hopes to have everything resolved quickly. “Perhaps December, but certainly by the first of the year,” Campbell said.

The new rules would forbid the co-ops from providing board members with health and life insurance, cap per-diems at $200 a day and set term limits.

“This is our recommendation,” Campbell said. “We lay it out there, and let all the people look at it, the co-ops and all, where they will have their say in it before we shove it down their throat. We are not trying to do that.”

According to the Advocate’s article, some directors were elected at meetings where only a few of the co-op customers attended. The new rules will require that 5 percent of the members be present at election meetings. If meeting attendance doesn’t reach that level for three consecutive sessions, or three in five years, then votes for new directors will have to be taken by mail.

Rural electric cooperatives were created more than 80 years ago to provide electricity in areas that were too sparsely populated to interest shareholder- owned utility companies. Today the co-ops provide electricity for 900,000 customers, many of whom live in once rural areas that have now grown into large suburbs around Baton Rouge, New Orleans and other Louisiana cities.

Cooperatives are nonprofit and owned by the members who buy the electricity. What traditional corporate utilities call customers, co-ops call members.