Member Says PEC Being Hijacked


The Hijacking of Pedernales Electric Cooperative

by Richard Golladay, PEC member

A Dec 29, 2016, lawsuit filed against Pedernales Electric Cooperative (PEC) and five Directors (Pataki, Graf, Akers, Powers and Oakley) is a “last ditch effort” on the part of two brave PEC Directors (Scanlon and Clement) to halt a process that has been evolving for some years.

See PEC Truthwatch post, January 9, “Two PEC Directors File Suit Against Cooperative



Richard Golladay

Member Richard Golladay

Unknown to the vast majority of its members, PEC is being systematically hijacked.  Most PEC member-owners are unaware because most who vote in Director elections  (about 10%) “trust” the Directors they’ve elected.  All but a few PEC members have discretionary time to attend monthly PEC Board meetings in Johnson City to observe what is going on.

Having attended most Board meetings for over 5 years now, I’ve observed that every new Director elected to the Board, starting four years ago, have from their very first appearance, been preoccupied with trying to change the Co-op’s bylaws and voting rules.

oakley-called-meeting-1The last five Directors who’ve appeared on the Board (and replaced that excellent Board who ended the corrupt Bernie Fuelberg era nine years ago) have a common agenda, which they are advancing slowly and methodically.  That agenda (and its full repercussions) went unreported in the press, with one sensational exception:

The straw that broke the camel’s back came on August 19. 2016.  Having achieved a “super majority” (five out of seven Director positions) the Board voted unilaterally, without member consent, to overturn a 70+ year voting system known as “At Large” voting, which allows all PEC members to vote in all Director elections.  The “Single Member District” (SMD) system they replaced it with only allows members within each district to vote for his or her Board representative.  The obvious advantage to SMDs is that richly funded candidates will be able to outspend opposition with campaign road-side signs and mass mail-outs and win by name recognition virtually every time.

Four of the five most recent Directors were sponsored by a secretive organization called “American Reform Coalition”, which also uses the name “Texans for Affordable Electric Rates”.  This organization is anti Co-op, from what little can be discovered about it, and most likely represents an effort by large fossil fuel energy interests to deregulate Co-ops – or force them to embrace customer choice.  The Co-op’s customers would be baited by slick advertising, as in other deregulated areas of Texas, and lured to buy power from internet store front facade privately owned retail electric providers – supplied by the major energy companies, of course, who own most of Texas’s fossil-fired coal and natural gas plants, and transmission lines.   No doubt, another component exists within this subterfuge of special interests, which would be an attempt to stop the further adoption of renewables (wind and solar).

The most appalling fact about the hijacking process is that it is preeminently political.  In early 2015 an exercise in tyranny was orchestrated by Tony Dale, Paul Workman, and other House Republicans in the form of House Bills 3451 and 3391.  These outrageous bills, had they been passed, would have (1) nullified the existing Board of PEC by resetting all Director elections, (2) nullified our bylaws by forcing Single Member District representation, and (3) changed PEC’s plurality voting to majority voting with requirements for runoff elections.  These bills represented the tip of a political machine’s spear, but the agenda in these failed House bills is nevertheless alive and well on the current and dutifully complicit Board.

Can PEC survive as a democratic member-owned Co-operative?  Probably not, if the lawsuit fails.  It may become nothing more than a local crony energy arm of the Republican Party.  And being a Republican, I am both appalled and ashamed.

Publisher’s note: Lawyers will meet in court in Hays County next week.


3 thoughts on “Member Says PEC Being Hijacked

  1. Mr. Golladay is exactly right. The “end game” is to put the PEC on the block for sale to a so-called Investor Owned Utility (IOU). There is a deep hatred within some of the Texas Republican ranks for the very concept of electric coops. The coop concept has been called “socialism” by those with that view point. The hard-working folks who built the PEC – the fathers, mothers and grandparents of many of today’s members sure would not have called it that. They would have called it – and did – “neighbors helping neighbors.” That is a slogan that can still be heard among the loyal and capable staff of the PEC.

    Deregulation was sold to the people of Texas as a way to have lower electrical costs and better service. For those who still place value in objective facts, those facts show that sales pitch was about as truthful as one would expect of a used car salesman named Slick Eddie. Costs went up and service quality has eroded. It is possible to find isolated exception but across the state as it effects the vast majority of consumers, the promise has proven to be a lie.

    That is the fate being engineered for PEC owners. At present, the hurdle for achieving owner permission for such a sale is very steep. If one wants to know when the end game is being played out, watch for a similar high-handed and likely illegal scam like that Mr. Golladay describes having been carried out to change the member ratified PEC voting procedures enshired in the PEC By-laws and Articles of Incorporation.

    This is the greatest fear among those of us who were involved in the early days (beginning in 2006) of the reform effort. The legislative efforts that began even then, part of which Mr. Golladay describes, demonstrated that intent, as did the more private comments of those elected officials pushing the various attacks on the independence of this privately owned not-for-profit corporation.

    After 10 years of efforts and the expenditure of, for those making those expenditures, a trivial amount of money but an amount that in two elections dwarfs the total of all the money spent by candidates for the PEC Board, the job appears to be near completion.

    For now, the slim hopes for perpetuation of not-for-profit electric service in Texas reside with a state judge in Hays County.


  2. The best and maybe only way to solve the problem is for member/owners to eliminate compensation for directors and impose term limits. That will discourage professional politicians from serving.


  3. Voting systems should only be changed by approval of the voters themselves….this is how it was done in Austin for single member districts and for all other voting system changes nationwide. PEC voters have TWICE BEFORE voted to NOT change the voting system, yet these five thieves did it anyway using legal trickery! If this is upheld without voter approval, most PEC voters will have NO VOTE AT ALL for Board candidates in this upcoming election. How do these thieves sleep? If ANYTHING is UNAMERICAN, this is the poster boy. In effigy, it’s time for a tree and 5 ropes.


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