From the Office of State Senator Troy Fraser

For Immediate Release
March 7, 2008
Contact: John L. Thomas
(512) 463-0124
(512) 965-1013 (cell)


The Senate Committee on Business and Commerce will hold a hearing on Thursday, March 27 to discuss the current governance structure of electric cooperatives. The committee will hear invited testimony from the Public Utility Commission and representatives from the Texas Electric Cooperative Association regarding current law and whether there is a need for statutory changes to protect customers of electric cooperatives. Additionally, the Committee has invited the directors from the Pedernales Electric Cooperative (PEC) to participate in the hearing.

"The advantage of an electric cooperative system is that the member-owners can determine how best to run the cooperative," said Fraser. "If the members are unhappy with the decisions of the board of directors, they can - and should - vote them out of office."

The hearing comes amid concerns raised by customers of PEC over the past 10 months. PEC members criticized a nomination and election process that did not allow them to cast a meaningful vote. The board's ballot process basically limited the choices to candidates hand-picked by the board itself.

"In any scenario, this type of hand-picked nomination process would allow a board to become a self-governed entity with no way to be controlled," said Fraser. "When a board answers only to itself, problems could, and probably will, develop - such as a lack of transparency and increased financial benefits to those board members. My concern is that if this can happen at the PEC, it could also happen at other electric cooperatives in Texas."

Electric Cooperatives operate under almost no state oversight because they are supposed to be self-governed. The Senate Committee on Business and Commerce will be studying all cooperatives in the state to ensure that the members do have the ability to self-govern the cooperative that they own. This hearing is the first step toward making recommendations for any statutory changes required to protect customers, increase reliability and respond to complaints of consumers of electric cooperatives in Texas