By now, GVEA members should have a ballot in hand to vote on 17 bylaw amendments. I urge everyone to read those amendments carefully before voting.
While some board and GVEA members asked to have for pro and con statements, GVEA only put forth the pro statements. The text text of the bylaw changes are located HERE in pdf< and a brief lead-up here.
One amendment changes meeting rules to Roberts Rules of Order. This is a long needed change which I support.
The most controversial change is in Article X, which seeks to remove the current $460 million cap on indebtedness. Prompted by a ruling from the federal agency that guarantees GVEA loans, the Rural Utilities Services has indicated they won’t approve further loans unless their original loan amount (face value) is under that $460 million. GVEA is at $465 million now, with outstanding debt at $365 million. The exact wording struck is However, the highest amount of indebtedness to which the Cooperative shall at any time be subject is $460,000,000.00. I recommend members vote NO on this change.
What this change would do is give the GVEA board a free hand in taking on debt. In fact, they already established a policy for a maximum indebtedness of between $600 million and $960 million, more than 1.5 times current debt.
As GVEA pursues new projects such as the Healy 2 Coal Plant or the Eva Creek Wind Project, each about $95 million, the debt, interest, and depreciation will raise your rates. As CEO Newton explained at the annual meeting, those costs will be a component not of the utility charge where usually reflected, but instead be buried within your fuel charge. New generation is being put into a Generation and Transmission (G&T) subsidiary Tri-Valley Electric Cooperative (Tri-VEC), even though members soundly defeated a proposal to move current G&T assets to a separate subsidiary in 2008. I’ll leave it to members to decide if this violates members’ intent.
GVEA has borrowed most of their outstanding loans in the last 10 years for a new oil fired 65 mw plant in North Pole, a second intertie line from Healy-Fairbanks, and the largest battery bank in the world.. They also just approved a $65 million loan for 2 years of various upgrades. It is good they only contributed in-kind effort and under $10 million of legal fees into the $312 million experimental coal plant in Healy. It was the U.S. Dept. of Energy and the State of Alaska that paid for it and the State of Alaska that is now suing GVEA for backing out of it.
While I appreciate recent GVEA efforts to provide more information to members, they have a long ways to go to fully earn my trust to support this bylaw amendment. When they use a subsidiary to purchase major assets on behalf of our membership, each of those subsidiaries needs to exhibit transparency. Alasconnect, GVEA communications subsidiary, is so undercover, their website is a shell, meetings are not announced, nor are GVEA members allowed to attend either monthly or annual meetings. Tri-VEC has no presence on the GVEA website. One might be able to find some information about both from board minutes and agendas, but those are paper scanned and are not indexed or searchable.
One of the findings of a recent member survey GVEA hired out was that GVEA needs to do a better job of fostering two-way communications with members. I’d say more, except the board meeting at which it was discussed went into executive session and all non-staff and board members were required to leave. Board Policy 1.2 value “Open and transparent communications with our members.” is not being honored. Another policy actively discourages board members from communicating to those they represent.
There are a couple of board members who advocate for improved communication with members, but it takes a majority of 4. I would recommend that GVEA members in districts now voting for board members call the candidates and ask for their commitment to better two-way communication. We elect board members from our districts and should be able to reasonably expect that they can communicate with us with their view as well as that of the board as a whole. Through technology, it can be done at little cost and will encourage GVEA members to be more involved in our co-op.
Until there is more transparency to members, I can’t support eliminating a cap on our cooperative’s debt. I would support increasing the $460 million some in order to pursue well supported renewable and demand reduction projects, but the board chose not to propose that to the members. We must discourage large debt load to keep our rates down.
