Lawyer disputes attorney general's read on co-op bosses' payments

Legal News Line May 14, 2007, 10:00am

Jan Soifer

Greg Abbott

The state of Texas won't intervene in the latest dispute between the nation's largest electricity cooperative and some of its 200,000 customers, according to Attorney General Greg Abbott's office. But that doesn't look like the end of a long-running battle that has delivered accusations of "exorbitant" compensation packages for an "excessively secretive" Board of Directors of a Central Texas nonprofit electric co-operative. An attorney-general's e-mail sent late last week to San Antonio columnist Roddy Stinson and obtained by LegalNewsLine confirmed that Abbott's office would not investigate customer concerns against the Pedernales Electric Co-operative (PEC). The concerns, over alleged excessive salaries and secrecy amongst PEC management, were raised in a March 9 complaint to Abbott's office filed by Austin-based lawyer Jan Soifer. Soifer told LegalNewsLine today that the attorney general's office had not formally responded to her complaint. Like other Texans, she discovered its fate yesterday in a typically-liberal Stinson column in the San Antonio Express-News. The column reported the demise of Soifer's complaint via an e-mail Stinson received from an "Abbott aide," Thomas Kelley, about an earlier Stinson column on the PEC complaint. Stinson routinely refers to the PEC Board of Directors as "Good Ol' Boys." In the e-mail Kelley said the statute that Soifer's complaint invokes "does not apply to rural electric co-operatives" and PEC's "nonprofit status derives from the Electric Cooperative Act (ECCA) of the Utilities Code." "The Nonprofit Corporation Act, which is the statute typically invoked by the OAG for its authority for actions involving nonprofits, does not apply to rural electric cooperatives such as this," Kelley added. Those might be fighting words to Soifer. "The PEC, like other Texas electric coops, was organized as a Texas nonprofit corporation under the Texas Electric Cooperatve Corporation Act (ECCA), and is required to operate as a nonprofit for the benefit of its 200,000+ members," she wrote in response to a LegalNewsLine e-mailed question. In 2005 PEC had 200,718 members generating total revenue of $413.5 million at a total margin of just under $20 million, according the company website's latest figures. According to Soifer's research, in 2004 PEC's Board President received a "compensation package" of over $194,000 while 18 other board members and associates averaged $35,000. The total of $829,000 represents about four percent of PEC's operating margin. The co-operative, founded in 1938 by future president Lyndon B. Johnson, is itself embroiled in a dispute with its supplier, Lower Colorado River Authority (LCRA), over wholesale electric charges, according to an article in the Austin Chronicle. PEC and a neighbouring retail-utility alliance claim their wholesale rates are subsidizing LCRA's water and wastewater operations and should be lower, the article reports. They also say LCRA is too generous with spending on community outreach and its police force. PEC is LCRA's largest single electricity customer and consumes almost one-third of its total output.

More News