By Jeremy D. Wells
Carter County Times
A group of Grayson Rural Electric customers, with questions about the electrical cooperative’s high bills and what they see as a lack of transparency, held a silent protest during the co-op’s annual meeting last week. That protest, which included holding signs on the street outside the co-op offices while the protesters stood with tape over their mouths, was a direct response to the lack of a public comment period on the agenda.
“Most annual meetings for co-ops, there is an extensive time where people get to speak,” explained protester Brandon La Voie. “There’s an extensive time where people get to speak. They get to air their grievances. Then we can decide on the board, and whether the board is good.”
Because the agenda for the Grayson RECC meeting didn’t include an agenda item for public comment, La Voie added, “a lot of people feel like this is on purpose, that we’re not allowed to speak because they’re afraid of what we’ll say.”
But Grayson RECC President Bradley Cherry said he felt the response from the protesters was based, at least in part, on a misunderstanding of how the annual membership meetings are organized. Cherry noted that although the agenda for their annual meetings does not include an agenda item explicitly for public comment, it does include a new business section. Any co-op member is allowed to introduce or raise an issue with the board during this time period, he noted.
“I think a lot of it is misunderstanding, not knowing and understanding all of the facts,” Cherry said. “The comment was made yesterday that we would not allow anyone to speak at our annual meeting. We have never limited anyone speaking at our annual meeting. You can go back and look at our agendas. As far back as we have one, it is an annual meeting of our membership. So, the line item there with new business is the opportunity for any member in attendance, not just a board member, but any member in attendance, to address any concerns or questions they have. That was not something that was added. That’s not something that’s new. It’s been there and it has been utilized in the past.”
GRECC attorney Derrick Willis did pause briefly during the new business section, after offering anyone who would like to speak three minutes of time to do so, but none of the protesters stepped forward to speak at that time.
Writing later on social media, La Voie characterized the offer to speak as a contrived moment, designed specifically to delegitimize the protesters and their complaints. He also noted that three minutes was not a sufficient period of time to raise all of their issues with the co-op, much less begin addressing them.
Among those issues was a claim that some Grayson RECC staff receive up to $700 a month cash in lieu of insurance.
“That’s a full income for some people in our area,” La Voie said. “If you look at the median income for Carter County, it’s $38,000 to $50,000 depending on if you’re in the city or in the county.”
But even folks at the upper end of the income spectrum are feeling the pinch of their electrical bills, he said.
“This is something that people want to stand up and speak about, but we don’t,” La Voie continued. “So, we’re going to have to put a petition together, to be able to create a space where we can air our grievances – where we can decide on what would be best for our co-op. We are member-owners and this is our co-op, and we are going to fix this.”
Cherry said that none of the board members receive any cash in lieu of insurance. What they do receive, he said, is “a standard monthly stipend.” He also welcomed any input and feedback from the group, or any Grayson RECC customer. Ultimately, however, any complaints about the utility come down to the costs of electricity.
Because of the high cost of electric bills, La Voie said, “people are having to move.”
“They’re having to decide if they want medicine, or if they want to keep their heat on at night,” he said. “They’re shivering. They’re elders… And what is causing that? People say that it’s just operation costs, but behind that operation cost is excessive executive salaries that total almost $200,000 once you put all benefits in place, and we haven’t even got the documents back.”
He noted that they’ve requested documentation related to business expenses, based on rumors of foreign trips and vacations on the co-op’s dime.
But business trips aside, La Voie said, “We should not be paying almost $200,000 salaries when we have a media income that’s less than $50,000 in our area.”
Cherry, however, said it isn’t salaries or benefits that have caused electric bills to be so high. Instead, it’s a complicated fuel charge and a purchase agreement with East Kentucky Power that limits the co-ops ability to look for cheaper electricity sources. More than 70% of what the co-op bills goes directly back to their power supplier, he noted, leaving the remaining 30% to cover operational and infrastructure costs.
“So, the biggest issue that we’ve faced over the last 12 to 18 months is the volatility in our FAC (fuel adjustment charge),” Cherry explained. “That is a pass through from East Kentucky Power. We receive no margins from it. So, what they bill us is what we end up billing our members.”
But, because billing each month is based on the charges of previous months, sometimes that fuel charge is passed on during a time when energy consumption has changed. It’s also why Grayson RECC customers sometimes pay more per kilowatt hour than customers who receive their electricity from a different utility.
“The difficulty with that,” Cherry continued, “and why it varies from each co-op and from each utility is those costs.”
The fuel surcharge can sometimes be from months previous too, adding to the confusion and volatility of each month’s bill.
“For an example, let’s say our January usage, what we’re billed for January is on our February bill. We receive that bill. Then, that goes into our calculations for our March bills. So, there’s really a two month lag from what East Kentucky bills us to what we bill our members. During those two months, this calculation is based off of usage. If they’re billing us off January usage, which this year and typically is a lot higher, that charge would be substantially more because of the usage – the amount of kilowatt hours that sold. I believe, for instance, we purchased 32 million kilowatt hours in January. We’ll only bill it in March, or then to April.”
He explained that they also have what they call a “shoulder month” when weather is milder.
“It’s not as hot. We’re not running as much. Our members aren’t running as much. So, our usage is down.”
Because of this, they’re billing on decreasing numbers of kilowatt hours. But they still have to pay that fuel surcharge, even as their usage is dropping.
“So, we had this cost for them that was spread over, for us, 32 million kilowatt hours; but we’re having to bill it to our members on 22 million or 18 million kilowatt hours. So, mathematically, you have a smaller denominator.”
Cherry said they understand that folks are feeling that pinch, and they’ve been working to address this issue.
“We have a mechanism that we have to use to calculate, now, how everyone recognizes their revenue, and when they recognize it. And all of that varies amongst co-ops and that, again, is why you have a little bit of a difference. We have looked at ours, and that has been a concern of ours, and a concern of mine, is how volatile our (FAC) is compared to what others’ are. Over the last several months, we’ve worked with East Kentucky, we’ve worked with the PSC (public service commission), we’re working with the consultant to look at that, analyze that, and see if there’s anything that we can do, that we could do different, starting this month. We’ve looked at it a little bit different, and we hope – and it does look like – that should eliminate a lot of that volatility that we’re seeing.”
That doesn’t mean they are going to eliminate the charge, or eliminate credits, Cherry said.
“We do think that we have something in place that’s going to help with that volatility, and eliminate some of that, to where it’s more levelized, and follows the curve that East Kentucky sends us.”
But, he said, they are limited by the public service commission in what they can and can’t do with billing as well as with where they purchase their power.
Cherry said that rumors that the co-op was paying for trips or vacations for employees were also unfounded, noting that the co-op is audited on an annual basis, and those records are available for public review. He said issues found in past audits were just that – in the past.
“That’s the past,” he said. “We submitted and worked, developed action plans to address some of the items. We went through that. We reported every six months to the commission, and we’ve satisfied all those requirements… so, yes, it happened. Yes, it’s in the past. But we’ve grown from it. We’ve moved on from it, and we’re better from it.”
La Voie, and GRECC Truth, however, are still intent on having their voices heard and making a change with the co-op leadership.
“The numbers are being built, and the cases being built, and as we compile everything, we’re really hoping that the person that can help us in this fight for our community will step up and show himself or herself,” La Voie said. “It would be incredible if it was a group of people that would stand up for our community. Because, right now, we need help. People are having shutoffs when they shouldn’t be paying $400 to $500 a month on electric.”
Contact the writer at editor@cartercountytimes.com
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