More Democracy Distress at the Electric Co-op

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Power to the People is a column by Donald M. Kreis, New Hampshire’s Consumer Advocate. Kreis and his staff of four represent the interests of residential utility customers before the NH Public Utilities Commission and elsewhere.

By DONALD M. KREIS, Power for the People

Our state has two home-grown electric utilities – Unitil and the New Hampshire Electric Cooperative (NHEC) — each with a smart and capable CEO who lives and works in the Granite State.  Which of these engineers-turned-executives has the tougher job – Unitil Chairman and CEO Tom Meissner or NHEC President and CEO Alyssa Clemsen Roberts?

My vote is on Clemsen Roberts, hands down.  Here’s why.

As his title suggests, Meissner chairs the board of his utility.  Although the board could nevertheless oust him as the leader of what happens to be the smallest investor-owned utility whose shares trade on the New York Stock Exchange, that’s really unlikely.

Meissner plays an active role in recruiting new directors for Unitil, so discord in the board room between between Meissner and his fellow directors is difficult to imagine as long as the company continues to do what it is in business to do – which is to enrich its shareholders.  For the first quarter of 2024, Unitil had a net income of $27.2 million, up more than $3 million from the same period last year.

Clemsen Roberts, on the other hand, does not serve on the NHEC board and, indeed, exerts virtually no influence over who serves as a director of her utility.  That’s because, as a rural electric cooperative that is owned and democratically controlled by its customers, the NHEC is overseen by a board that is elected by those customers.

Tension and discord have become the norm inside the NHEC Board in its work overseeing Clemsen Roberts and her employees.  How do I know that?

Not because anyone is talking.  Both Clemsen Roberts and her board are too professional for that.

I know there is trouble at the governance level of the NHEC because the Co-op’s annual election began its three-week voting period on May 21.  And, in addition to nine candidates for four available board seats, on the ballot is a peculiar proposal to amend the NHEC bylaws.

Co-op members are voting on proposed language that would explicitly give each member of the NHEC Board “access to all Cooperative documents with the exception of documents contained in employee personnel files or whistleblower files.”  The bylaws proposal would also stipulate that “no rule, regulation or policy shall restrict director access to Cooperative documents requested by three (3) or more directors.”

Why could this possibly be necessary?  As noted right on the ballot, the NHEC board itself is sharply divided on this proposed bylaws amendment, voting 6-5 against recommending approval. 

It turns out that the directors who favor this bylaws amendment are annoyed by the response they got when they asked to look at the wholesale contracts the Co-op has signed in order to purchase electricity for retail sale to members.  They were likewise annoyed by the response they got when they asked to look at documents related to the NHEC’s selection of outside legal counsel.

The management did not tell these directors the requested documents were too secret for disclosure to them.  Rather, they were told that if they wanted to look at the documents they would have to appear personally at the NHEC headquarters in Plymouth to look at them – and would not be allowed to make copies to review at home.

Proponents of the proposed bylaws change note that the Public Utilities Commission (PUC) has, by statute, plenary access to the books and records of the state’s investor-owned utilities.  It’s inconceivable that Meissner would tell the PUC to show up at his office in Hampton to check out Unitil’s wholesale power contracts (which, indeed, are filed at and reviewed by the PUC in Concord).

By contrast, the NHEC is almost entirely exempt from PUC oversight, because a supermajority of its customer-members voted almost a quarter century ago to file a “certificate of deregulation” with the state agency.  That’s a statutory privilege granted to electric cooperatives in New Hampshire, the theory being that popularly elected directors can essentially do for a co-op what the PUC does for customers of investor-owned utilities – prevent the utility from exploiting them.

Were I a member of the NHEC, I would vote in favor of the proposed bylaws amendment.  But I understand why sentiment is divided on the NHEC Board.

Though I have never been a director at an electric cooperative, I have served as the president of the board of New Hampshire’s largest cooperative grocer.  Had the management of that co-op told me that I could not be trusted with sensitive documents related to the business, my fiduciary feathers would have definitely been ruffled.

Additionally, a few years ago I served as an expert witness on behalf of disgruntled members of an electric co-op in another state.  They sued their co-op because management refused to let them petition for a member vote on allowing members to attend board meetings.  As an expert on cooperative governance, my opinion was that such openness would not hamper the work of that co-op’s board as claimed.  Indeed, as I pointed out, the NHEC board allows member-owner attendance at its meetings.

What that faraway electric co-op had in common with our electric co-op was leaders – a CEO, and board officers – who were sincerely and earnestly committed to the best interests of the customers who own their utility.  At the trial involving the other co-op, it was so dispiriting to watch these dedicated cooperators tell the court how untrusting they were of their members – or, at least, those members who wanted to attend board meetings.

For similar reasons, the current fight over the NHEC’s bylaws is dispiriting.  Trust and respect are a two-way street.

As the state’s consumer advocate, charged with protecting the interests of residential utility customers, I have enough access to confidential information filed at the PUC to know how challenging it is for any utility to buy power from wholesale suppliers, who exert a lot of market clout even if not legally considered monopolists.  If I were Alyssa Clemsen Roberts, I would not want to be second-guessed by hostile directors at every move in such a challenging marketplace.

My proposed solution will likely please no one.

Regardless of how the bylaws vote goes, I think the customer-members of the New Hampshire Electric Cooperative should consider rescinding their certificate of deregulation and returning their utility to the public scrutiny provided by plenary PUC oversight.  That’s how Vermont’s two electric cooperatives must do their work under that state’s law, and each is thriving.

The NHEC election runs through June 12.  Members can vote on line or via mail by following the instructions that were mailed to them by the co-op at their billing address.

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