Performance at PEC by almost any measure (and there are many) is exceeding expectations. While PEC Truthwatch has had its issues with certain board actions over the past year, PEC’s management and staff have quietly and steadfastly plowed ahead, transforming PEC into the beginnings of an efficient, competitive, technology-driven energy provider. To wit:
- J.D. Power ranks PEC the 15th highest score overall in all utility residential electric customer satisfaction as well as placing PEC on their coveted “most improved” list.
- Fitch Ratings recently affirmed PEC’s strong AA- rating in June, 2016.
- PEC has implemented seven rate reductions since December, 2014 and rates are now below the Texas and national averages.
- PEC management refinanced $78.2 million in bond indebtedness in 2015, saving the cooperative over $15 million through the year 2020.
- In 2014, PEC negotiated with our wholesale power supplier (LCRA), reducing PEC’s estimated costs by over $200 million through the remaining life of the agreement.
Mr. Hewa, his staff and the employees throughout the cooperative deserve most of the credit for these achievements.
The ever-earnest member Ernest Altgelt, now seems obsessed with PEC employee compensation. He seems to be suggesting that PEC salaries and wages are too high. One or two other members, apparently in sympathy with Mr. Altgelt, have offered up their own expertise (which is none) about competitive salaries and wages within today’s utility industry and employment environment. This minor cadre could not be more wrong. With the millions of dollars of members money being demonstrably saved, it would appear that PEC leadership is worth every penny. Members are getting a handsome return on their investment.
When I served on this board, I pushed for wage and benefit studies to determine where PEC stood with respect to today’s competitive environment. From these studies, the board ultimately settled on a goal that PEC wages and benefits should fall in roughly the 75th percentile among all utilities. For many employees, that resulted in a pay increase. In the last couple of years, PEC’s overall head count has fallen from a high of over 800 to 700. For those who remain, much is expected. However, all are competitively compensated.
With respect to the pay of senior-level managers, including the CEO, PEC’s form 990 is published for all the world to see. PEC pays its senior level managers well. We live in an era of low unemployment. We live in a high-tech world where smart people of contemporary skills are in demand and can get jobs anywhere. Talented, effective, ethical executives can be hard to get and tough to keep.
Here is also what is well known. Top performers increase productivity. It is not possible to build and sustain a high-performance team at any level unless you are able to attract and retain exceptional, talented people. The consequences of turnover are far-reaching. Not only does a company lose inertia when vital leadership seats are empty, the cost of recruiting and training new people costs more than most people think.
For 27 years I ran network-affiliated television stations. The #1 stations in the market usually invested in the best and smartest “talent”. The lowest-ranked stations generally had average talent who made less money. It’s usually the way things work.
Members should demand that PEC be a well-run, well-managed enterprise, responsive to them. In order to do that, it must have skilled, smart performers running it. A company does not need to pay the top salary in every case, but it must pay within a competitive range. When a company pays less than other companies for the same jobs, they will not have access to the top performers.
Last year PEC added 10,000 meters making it the fastest growing distribution electric cooperative in the nation. 10,000 meters is as large or larger than many electric cooperatives, period. Geographically, our system is huge. It is an enormous operation and we deserve the best people in the country running it. We have them now and we should not begrudge a penny of what they earn.