to believe Golden Valley Electric-Association management's last minute
ad blitz, they would still like to transfer $300 million worth of power
generation plants and transmission lines to a separate entity known as
GVEA G&T. Although GVEA members soundly defeated this proposal, it
appears a majority faction of the board has yet to understand the downside
risk of spinning off our utilities, and forfeiting direct accountability
to GVEA members.
the track record when public utility assets are spun-off to independent
ago, Fairbanks voters were asked to sell their utility system, Municipal
of the deal was a PTI Communications of Alaska promise to relocate its
Alaska Division Headquarters, with 100 employees, from Anchorage to Fairbanks.
That deal was scuttled when PTI was sold to Century, and later to ACS.
years ago, Enron and other proponents of deregulating California's electrical
power industry advocated the sale of power generation plants to private
ago, energy traders found clever methods to create an artificial energy
"crisis" in California with rolling blackouts. California paid
about $50 billion for an amount of electricity that cost about $7 billion
two years earlier. During this "crisis," Enron CEO Ken Lay told
the chair of the California Power Authority, "In the final analysis,
it doesn't matter what you crazy people in California do, because I got
smart guys who can always figure out how to make money."
years ago during a U.S. Senate investigation, the California Power Authority
summarized the problem as follows, "Enron stood for secrecy and a
lack of responsibility. In electric power, we must have openness and companies
that are responsible for keeping the lights on. We need to go back to
companies that own power plants with clear responsibilities for selling
real power under long-term contracts."
acceptable financial safeguard for GVEA's power generation and transmission
facilities is to continue managing them, with direct accountability to
GVEA members. Under the proposed bylaws for GVEA G&T, these cooperatively-owned
facilities could have been sold to an Enron-like corporation, without
a vote of GVEA's member/owners.
deny GVEA partition
The proposal would have allowed GVEA to transfer its power plants, transmission lines and substations — about 60 percent of its total assets — to the new entity, the GVEA Generation & Transmission Cooperative.
More than 6,500 of the cooperative utility’s 31,286 members cast ballots on the issue before Monday’s deadline, more than double the 10 percent participation required to make the vote valid.
On the same ballot, voters approved a change to the utility’s bylaws that will allow nonspouse family members of board directors to produce and sell power through GVEA’s Sustainable Alternative Natural Power program. The proposal passed 66 percent to 34 percent.
GVEA executives and five out of six board members supported the G&T proposal, which they said would have saved members about $30 million over the next five years by taking advantage of lower revenue requirements from banks that loan money to the utility.
The proposal has been in the works for years.
Under existing bylaws for GVEA, the utility’s board of directors can still transfer assets to the G&T without approval by members if those assets account for 15 percent or less of the utility’s total assets.
But GVEA president Steven Haagenson and board chairman Bill Nordmark both said Monday before the votes were counted that they would not transfer any generation and transmission assets to the G&T if members rejected the plan to transfer all the assets.
“I think we’d be very, very careful about going against their wishes,” Nordmark said.
Haagenson noted that the board had already passed up the opportunity to transfer some assets and held a member vote instead.
He added that the new entity was already been formed and could be used some time in the future.
“The concept’s valid,” he said.
GVEA executives pushed the proposal in the utility’s magazine and at a number of public hearings, arguing that the restructuring would save members money. They played down the loss of direct control by GVEA members and argued that the member-elected board of directors, which would have overseen the new entity, would only sell or transfer assets if doing so were in the best interest of GVEA members.
Under the proposal, members would have given up their right to vote on the transfer or sale of the utility’s major assets.
Board members later pushed the proposal through newspaper and television ads.
Vocal critics, including board member Tom DeLong and a number of GVEA members, questioned the touted savings and argued they weren’t worth the loss of control by members.
DeLong said he also opposed the plan because it was unclear how it would impact other utility projects.
Staff writer Stefan Milkowski may be reached at 459-7577 or email@example.com.