Persistent action causes board to reevaluate

Monday, February 20, 2017

Last year, a group of Utilities District of Western Indiana REMC customers raised concerns about their high utility rates.

The members’ persistent action pressed the board of directors to re-evaluate how the rural electric membership cooperative (REMC) came to be the one with the highest rate in the state.

During a recent interview with the Greene County Daily World, UDWI REMC leaders and Director of Human Resources and Compliance Mike Chapman made a point to thank the individuals who have stepped up and made the cooperative take a look at its numbers.

“If anything, we need to be grateful to this group for bringing our attention to some of the things -- some we already knew -- and we are trying to get out of that bottom core tile,” Chapman said. “We are genuinely working to get out of those positions, and already we’ve made some movement.”

It is important for UDWI REMC customers to sometimes offer a critical voice because the Indiana Utility Regulatory Commission (IURC) does not regulate the state’s REMCs. According to the Indiana Office of Utility Consumer Counselor’s website, state law allows REMCs to withdraw from the regulatory commission “for the purposes of setting rates and charges, and obtaining financing.” The site states all Indiana REMCs withdrew from the commission by September 2012.

Due to the fact the cooperative does not fall under the taxing authority and is not an entity of the state, the cooperative does not fall under the scope of the Access to Public Records Act. So, it is up to the members to utilize the policies available to them, including year-end financial information, which is also handed out at annual meetings.

Recently, the Greene County Daily World spoke with some of the concerned members as well as employees of REMC who provided insight into some of the questions brought forth by members.

One of the major concerns was the plan to build a multi-million dollar facility near the current buildings, along State Road 54 where the old Bloomfield Processing Plant used to sit.

The real issue is the plans were not brought before the members before the decision was made. While a tour of the current main building shows the need for change, this decision -- in the midst of information being disseminated showing the cooperative with the highest rate in the state -- should have included more of the membership for input.

UDWI REMC CEO Brian Sparks said the project was not a definite one, and once the leaders realized the project was coming in over budget, it was stopped.

As part of the added concern, members said, despite the fact the building project was not a definite go, UDWI REMC still borrowed the $10 million expected to finance the construction.

This decision also lacked enough discussion among its members. But, as with many financial decisions, there was more than one part taken into consideration, according to Chapman.

“That $10 million was a multi-pronged decision. Number one, it came with an opportunity to get out of, what was called, RUS, which is rural utility service government entity that acts as a lender to co-ops, and become a complete CFC borrower. It’s another cooperative-based financial loaning institution. And by doing that, we were able to reduce the number of years we would be in debt, reduce our interests and it was an overall beneficial financial decision,” Chapman stressed. “And the other part of that decision was if we did not build, to use some of that money for system upgrades and getting rid of that old 1930s, ‘40s, ‘50s wire out there.”

Another topic, which has caused a lot of issue, is that of board compensation. Last year, board compensation ranged from $21,000 to $34,000. Chapman explained the compensation rates include per diem for each meeting attended as well as insurance benefits.

The rates are among the highest in the state, but UDWI REMC leaders say the board does a lot more than people realize. Concerned member John Coleman brought up the point: If we have the highest rates in the state, we should not also have the highest paid board. If spending is too high, the board should take the cuts.

REMCs are governed by a board of directors, elected by the member-owners. As with many governing entities, sometimes it is hard to get people to show up and speak for themselves.

Members have the chance to have their voice heard at the annual meeting, where seats for three members are up for grabs. Each district has two individuals running for the seats. The meeting is set for April 8 at White River Valley High School. Doors open at 10:30 a.m. and meeting starts at 1 p.m.

UDWI REMC has worked hard the past few months to cut its rates by 4.1%. They should be commended for that. The concerned citizens have also put in a lot of hard work the past year or more trying to convince UDWI REMC there was a problem. Kudos to that group for looking out for its fellow members.

At times the discussion probably turned heated. But the bottom line is, the two groups worked together to help solve a problem.

The money in our pockets -- or going out of our pockets rather -- is often the source of controversy. But, remember as you head out to the annual meeting to cast your vote for the board and discuss the current state of your REMC, to be civil. Your voice is important. Let yourself be heard.