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Virginia advocates convinced that the governance structure of rural electric cooperatives is hindering a clean energy transition are eager for the General Assembly to foster their cause.
Appalachian Voices is among the environmental organizations guiding consumer protection legislation toward debate during the 60-day session that begins Wednesday.
“We’ve tried other ways and they haven’t worked,” said Emily Piontek, Virginia energy democracy field coordinator for the nonprofit. “That’s why we’re going the legislative route. It’s the only one left.”
In a nutshell, the bill calls for co-ops to open their board of directors meetings to all members and circulate meeting minutes, prohibit proxy voting or other processes that enable boards to control elections, and be transparent about using member funds for political lobbying.
Del. Wendy Gooditis is the bill sponsor on the House side. She’s a Democrat representing parts of Loudoun, Clarke and Frederick counties in the northern part of the state. Advocates haven’t yet found support in the Senate.
“It’s a little difficult securing a Senate patron,” Piontek said. “This is kind of a niche issue.”
The movement toward legislation was fomented by co-op members frustrated that four years of litigation and grassroots efforts to reform individual co-ops have met with strong resistance and limited success.
For instance, in late December, a judge in Spotsylvania Circuit Court denied a petition from members of Repower Rappahannock Electric Cooperative seeking to add transparency measures via three amendments to the board’s bylaws.
Rappahannock, the state’s largest co-op when measured geographically, serves upward of 140,000 members in a territory that stretches across 22 counties from the Blue Ridge Mountains to the Tidewater region.
Piontek and her allies hope to bolster their legislative cause with the Jan. 18 release of a detailed scorecard that ranks Virginia’s 13 distribution co-ops on a range of transparency and governance issues.
Appalachian Voices and Solar United Neighbors spearheaded the scorecard research, with review and input from the Piedmont Environmental Council, Virginia Organizing, the Virginia Sierra Club, and Repower REC.
One co-op expected to receive high scorecard ratings is Powell Valley, which opened its board meetings to members in 2018 after years of advocacy. The co-op is based in New Tazewell, Tennessee. It serves more than 32,000 members in four counties in its home state and three — Scott, Lee and Wise — across the border in far southwestern Virginia.
Roughly 50 co-ops nationwide have open board meetings. South Carolina and Colorado can serve as models for Virginia, Piontek said, because both states passed laws requiring open board meetings, to some extent.
States including Texas, Florida, Hawaii, Wisconsin, Vermont, and New Hampshire have co-ops that embrace open meetings despite not having a legislative mandate.
In Texas, for example, Pedernales Electric Cooperative began live-streaming board meetings more than 10 years ago because of member pressure. It’s the nation’s largest electric co-op.
“People who want to push co-ops forward are the ones being constrained,” Piontek said. “It’s the folks who are passionate about these issues who should have the means and capability to have more of a say.”
Rappahannock: ‘Wisely and truly transparent’
Rappahannock Electric Cooperative CEO John Hewa said he would certainly comply with any new state law, but emphasized that the co-op he has led since August 2020 is “one of the most wisely and truly transparent” in the nation.
“REC is absolutely shining bright with disclosures,” said Hewa, referencing member comment sessions, telephone town halls, and a policy that lets members request appearances before the board. “It’s a simple process that is quite straightforward.”
He added that the executive team and board members are accessible via an email portal and that annual reports and documents with specifics about governance, operations, and compensation are available on the co-op’s website.
Hewa has 25 years of experience with electric utilities, including a 2013-17 stint as CEO of Pedernales, after that Texas co-op had already opened its meetings.
In a joint phone interview with Charlie Payne, the co-op’s legal counsel, the two stated that Rappahannock is regulated by the State Corporation Commission and is required to meet numerous federal disclosures as a borrower with the Rural Utilities Service.
“We are not a public body. We are a public corporation, and there are no open meeting requirements for corporations in Virginia,” Payne said. “It’s not in our bylaws.”
Payne added that there are “all kinds of good reasons for not permitting open meetings.” One is the confidential and sensitive information discussed when the board enters executive sessions.
Hewa pointed out that his co-op has dramatically increased its focus on transparency and member engagement under his watch. For instance, the co-op organized stakeholder sessions centered on an energy efficiency program and also talked with members about broadband access.
Both Payne and Hewa said the member push for open meetings is confined to a small but vocal minority.
Despite that, Hewa said, “We are mindful. We will listen to input from members, take it into strong consideration, and come up with responses.”
Still, he added, “We are a private, member-owned not-for-profit that needs to safeguard its membership.”
Piontek, of Appalachian Voices, stressed that co-op members don’t expect to be able to attend executive sessions of board meetings where confidential and sensitive topics are discussed.
Also, she pointed to Rappahannock’s recent stakeholder sessions on energy efficiency as a prime example of why member attendance at board meetings matters. Those discussions revolved around an on-bill tariff program the General Assembly greenlighted in 2020 via Senate Bill 754.
Briefly, it allows co-op boards to approve programs for their members to finance energy efficiency improvements. The idea is for members to reduce their energy use by upgrading household basics such as windows and heating and cooling systems.
However, in early December, the Rappahannock board discussed and voted on a version of the proposal that was different from the one presented at the final stakeholder meeting. Members didn’t know about the changes because they were barred from attending.
“More people would have been aware if members had been at the meeting,” said Piontek, who participated as a stakeholder.
While co-op members can request permission to appear before the board and issue statements, they aren’t permitted to stay and watch deliberations.
‘Electricity is not sexy’
Mike Murphy, a co-founder of Repower REC, said he was disappointed in the judge’s December ruling but pleased with what his group has accomplished thus far.
“We have forced our co-op to be a little more forward and a little more progressive,” he said. “Rappahannock has gotten much better about talking about solar and energy efficiency since we have pushed them.”
Murphy said he was heartened that the judge seemed to recognize the merit of Repower’s request to observe the portions of meetings that don’t involve executive sessions.
He noted that the judge could well have ruled in Repower’s favor on the open meetings amendment if the group had exempted emergency board meetings from its proposal requiring 72-hour advance notice for meetings.
“It all comes back to, ‘What do you expect from a governing body?’” Murphy said. “I expect more from Rappahannock Electric Co-op.”
Murphy, a retired school superintendent, joined fellow co-op member Seth Heald in forming Repower REC in 2018 to address the co-op’s clean energy mix as well as governance and transparency concerns. An attempt to collect enough signatures to put bylaw reforms up for a membership vote was stymied when the co-op wouldn’t supply a form.
Heald, a retired U.S. Justice Department attorney who spent part of his 35-year career handling electric utility litigation, had been chipping away at those issues with Rappahannock since 2012.
Neither Heald nor Murphy has been successful in being elected to a Rappahannock board seat. But both have solar arrays on their homes and are eager to press their co-op on strategies for maximizing solar power, energy efficiency, microgrids, battery storage, and grid resiliency.
“You can’t talk about those things if you’re not invited to the table,” Murphy said. “We know now we can’t win by promoting a pro-solar, pro-transparency [candidate] for the board because Rappahannock can always out-public relations and outmaneuver us.”
If they can’t win at the ballot box, Murphy said, passing legislation that allows co-op members to be more participatory is a crucial tactic.
It’s frustrating that while co-ops pride themselves on adhering to seven principles crafted by the International Cooperative Alliance in 1995, Rappahannock falls short on the one spelling out democratic member control. In part, it states that members actively participate in setting and making decisions.
Murphy, who said he has been tinkering in solar and renewables for decades, is aware some might find his fixation with electric co-op boards to be odd.
“The problem we have is that electricity is not sexy,” he said. “We’ll always be working to get these issues out.”
Co-ops seem to fear that angry, hostile crowds will be flooding their meetings, Murphy said.
But that’s not the case.
“All we want is to know what our elected co-op board members are doing,” Murphy said. “It’s important to me on a very deep, personal level and I’m unusual in that respect.”