DMEA Alters Bylaws

Feb 27th @ 1:22 pm in News by Scott Staley

DMEA

On Tuesday, February 26th, the Board of Directors of Delta-Montrose Electric Association (DMEA) invited Director, Glen Black to resume his service on the Board following a leave of absence.  They also accepted his resignation from the position of Board President.  Black had been on a leave of absence since December 17th, 2012 when the question of his eligibility for Board service arose.  At that time, Article III, Section 3 of the DMEA bylaws read, “No person shall be eligible to become or remain a director of the cooperative who… is in any way employed by or financially interested in a competing enterprise, or a business selling electric energy…”  Glen Black is the Community Development Director for the City of Delta.  The City of Delta has an enterprise fund known as the Municipal Light and Power Department which does sell electric energy to Delta residents, but Black does not work for that department.  Black’s employment was not deemed a disqualifying factor in 2011 when Black ran for the Board and won, but when the City of Delta began providing power to a new Maverik Fuel Stop in Delta–a location previously allocated as DMEA service territory, questions regarding Black’s eligibility re-surfaced.

At Tuesday night’s board meeting, DMEA Board Director, Nancy Hovde, who had been Acting Board President in Black’s absence stated,  “DMEA is holding ongoing meetings with the City of Delta to determine if the City will acquire DMEA facilities and portions of its service territory as per state statute, or whether the City will actually compete for service.  Until a resolution is reached, we do not know if there is, or will be competition and if so, the nature of the competition.”  Nonetheless,  Hovde went on to say  “we must act on this issue in a timely and informed fashion.  To delay further is not in the best interests of our member-owners.”

The DMEA Board then took several actions. These included electing Hovde to the position of Board President with the Vice President seat going to Board Director, Brent Hines, and proceeding to alter the board policies on “Conflict of Interest,” and “Director…Standards of Conduct,” as well as Article III, Section 3 of the DMEA bylaws quoted above.  These revisions included removing the above language regarding eligibility from the bylaws and replacing it with a mandate to follow the board policy on “Conflict of Interest.” This policy makes delineations between entities of which DMEA is part owner, such as Tri-State Generation & Transmission Inc. (Tri-State) and Western United Electric Supply Corp., entities that have business relationships with DMEA, such as the Uncompahgre Valley Water Users Association (UVWUA), and the City of Delta, and other entities that–technically–sell electric energy such as DMEA net metered members.  These changes grant the board the ability to determine conflicts of interest on a case-by-case basis.  In the case of Glen Black, the board deemed his service on the DMEA Board of Directors to be acceptable at this time.  “It’s possible that at a later time, Glen may have to leave the board,” said Hovde.  “In the meantime, Glen is not a participant in the negotiations from either side, and he will continue to be recused from all discussion regarding this issue.”

Amending bylaws was not all that the DMEA Board did last night.  The board also approved a resolution to investigate appealing to the Colorado Public Utilities Commission in order to challenge the new rate structure, called A37, that its power supplier, Tri-State Generation and Transmission, Inc., put into effect on January 1 of this year. The board had several concerns about the new rate structure: The first is that A37 would raise the rates of local coal mines, West Elk, Bowie, and Oxbow by a significant amount. The coal mines are DMEA’s largest users and they draw electric energy steadily rather than in a cyclical fashion like small commercial users and residentials. The new Tri-State rate is, effectively an energy-only rate that penalizes the steadiest users of electric energy.

Another of the Board’s concerns is that A37 may undermine DMEA’s energy efficiency initiatives such as the Time-of-Use (TOU) program by eliminating incentives to conserve energy and reduce DMEA’s ability to fully utilize its $9 million investment in demand control equipment.

If DMEA determines that it makes sense to ask the PUC for relief from the rate structure, it may join Empire Electric from Cortez and Empire’s biggest customer, Kinder-Morgan, in appealing to the PUC for relief from the new energy-only rate.  In addition, three cooperatives in New Mexico have gone to that state’s regulator to protest the new rate structure.

In another matter, the board voted to hire the National Rural Electric Cooperative Association (NRECA) to do an operational analysis, or audit, of both DMEA’s board and staff in order to help improve their operations. The Board imposed a deadline of June 11th on the staff portion of the audit.

Alex Shelley

Delta-Montrose Electric Association

Communications Specialist

dd: 970-240-1207