Rappahannock Electric Cooperative (REC) should be a leader on broadband and economic relief to members in this time of a pandemic and economic crisis. REC also uses an unfair voting system. Tell REC to bring broadband & economic relief to members and end its unfair blank proxy voting system now!
Full petition text and additional context are below.
To: Rappahannock Electric Cooperative Board of Directors and Kent Farmer, CEO
In these challenging times of a pandemic and economic crisis, we see an opportunity for our utility, Rappahannock Electric Cooperative (REC), to leverage its immense resources, with over $300 million in annual revenue, to address pressing needs in our community. We applaud REC for stopping electric shut-offs for non-payment and related fees during this crisis, and we ask that REC reverse its refusal to provide broadband to members’ homes and support economic stimulus in our community.
We urge REC’s board to accelerate work to bring broadband to REC’s territory and expand the work to include broadband access to the home for REC member-owners across the territory. Broadband is increasingly essential for businesses, entrepreneurs, members working from home, students doing research and online assignments, and access to entertainment.
Finally, we urge REC’s board to follow the lead of other electric co-ops and return security deposits early, accelerate capital credit payments to provide economic stimulus to our community, and eliminate the proxy voting system that allows incumbent board members to control board election outcomes.
Our electric cooperative is owned by member-owners, customers who buy electricity from Rappahannock Electric Cooperative (REC), and REC should be democratically controlled by REC members and working in the interest of member-owners. Currently, REC does not allow member-owners to attend board meetings, the co-op is being sued by members for not providing the form needed to propose bylaw changes (a right enshrined in REC’s bylaws and Virginia law), and the board uses proxy votes to control who is elected to the board. Additionally, REC is holding over $400 million of our money as capital credits while refusing to provide details of its policies on when those funds will be returned to co-op members. Jack Manzari’s campaign for the board in 2019 is an example of the problem of blank proxy votes at REC. Jack was a strong proponent of high-speed internet and was defeated by the blank proxies controlled by the board, despite having won the most direct votes from REC member-owners.
Repower REC is a grassroots coalition of concerned Rappahannock Electric Co-op member-owners working in partnership with Solar United Neighbors of Virginia, a grassroots nonprofit organization that helps homeowners go solar. Our purpose is to promote a more transparent and democratic REC by helping our fellow member-owners reclaim their roles as owners of a democratically controlled enterprise, and to advocate for the fair and equitable treatment of distributed energy resources such as rooftop solar.
More than 100 electric co-ops across the US are bringing broadband internet to their member-owners including at least 5 of the 13 electric co-ops that serve members in Virginia. USDA has $550 million available for broadband infrastructure in rural America. Central Virginia Electric Cooperative, which neighbors REC to the southwest, just received $28 million as a half loan/half grant from USDA for its broadband work. From CVEC’s press release: “CVEC has committed to a $120 million plan to install over 4,500 miles of fiber-optic cable in the 14 counties it serves, providing broadband internet to all of its 37,000 members.”
REC is working on expanding its own internal broadband network to support: “grid modernization, disaster recovery, cyber and physical security, and data analytics.” We applaud REC for working to improve reliability and safety with this broadband network and for noting that it “[expects] to have excess fiber capacity, which can be made available for open access leasing arrangements with local governments, schools, and other third party providers.” But in our petition, we urge REC to reverse its decision that it will not bring broadband all the way to the homes of all of its members.
Some electric co-ops across the country are giving back security deposits early and giving out more in capital credits to provide financial relief to their members when it is desperately needed. Berkeley Electric Co-op in South Carolina is returning $4.8 million to almost 34,000 members, and Aiken Electric, also in SC, is paying out $4 million in capital credits, more than double the amount it returned last year along with giving back another $500,000 in deposits. In our petition, we urge REC’s board to give back security deposits early and accelerate capital credit payments (normally not paid until the end of the year) to provide relief to our members.
Learn more about capital credits from this Repower REC blog post: “So what are capital credits? They’re probably the most important aspect of what distinguishes a nonprofit electric cooperative (like REC) from a for-profit, investor-owned utility like Dominion Energy Virginia, which is owned by shareholders.
Generally speaking, the amounts REC receives each year in excess of expenditures are called “margins.” As a nonprofit, tax-exempt electric cooperative, REC can’t just keep these funds for itself. Rather, it allocates annual margins to the co-op’s members in proportion to those members’ patronage of the co-op during that year. Then, each year, REC’s board decides how much of the total accumulated capital credit allocations – about $400 million in 2018 – can be retired (returned) to REC members that year. The board doesn’t just decide how much will be returned, it also sets policies that determine how long REC will hold on to members’ funds that aren’t returned, and what methodology will be used to determine which members get what amounts, and when. These decisions have significant impacts on REC member-owners, yet REC’s board makes them in near-total secrecy. The lack of transparency is stunning and entirely unwarranted.” This is an excerpt from a longer Repower REC blog on capital credits, read the full post here.
The petition includes a final ask for an end to the use of proxy votes at REC. Here is more context on why we need to end proxy votes and how blank proxy votes changed the 2019 Rappahannock Electric board election results from this Power for the People VA post: “Three times in the past four years the board’s control of several thousand blank proxies altered election results, allowing a board-favored candidate to prevail over the candidate who received the most direct member-owner votes. Just last August, Dr. John Manzari—a board candidate seeking reforms of REC’s governance, rooftop solar, and broadband policies—received the majority of votes cast directly by member-owners.
But Manzari still lost the election because the board cast more than 2,000 blank proxy votes for his opponent–the incumbent. Although nothing in REC bylaws requires or specifically authorizes the practice, REC’s board treats blank “member-undesignated” proxies as delegating the member-owner’s vote to the board to cast as it sees fit.” This is an excerpt, read the full story here.