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There doesn’t seem to be much sense in the world these days.   Trying to do the right thing is either barking up a tree or gets one into trouble in the line of ‘no good deeds go unpunished’.  

Middle East-Africa (Syria, Egypt, Kenya, Somalia)

Congressional Republicans determined to commit sepuku with failure to approve a budget for the government

Pettiness and selfishness.

To name a few.

Maybe I’m in a cynical mood and need to change my perspective?  Maybe people are overwhelmed with input from so many directions (media for example)?   Maybe this one extra blog will send someone over the edge from overload?  

I better stop now before I’m blamed for someone’s dissembling.

Will the Regulatory Commission of Alaska ask utilities to implement conservation? Not if their staff report is implemented. You can read more about this regulatory issue on R-09-005.

The sad part about the recommendations is that the federal government offered some guidance and then offered it to the states to look at or come up with their own ideas. The Alaska Legislature, through an Energy Policy with SB 220 provided further incentive. Yet the RCA’s staff recommendation is just to get trained up more. This docket has been out there for nearly 2 years, plenty of time for training.

I say it is time to get off their duff and work for the long term benefit of the consumers they are charged to represent. I urge anyone who has the stamina to read the documents to at least comment to the RCA. Comments are due Dec. 9, 2010 by 4 pm.

So I ran into Jay Ramras on a recent plane trip and he said the refineries were working to keep the price of jet fuel low to remain competitive to airlines that could go elsewhere. So to make up for selling at a bargain rate, they are overcharging their other customers.
This was confirmed with a recent News Miner article.

Maybe we should modify our vehicle engines and home heating appliances to use jet fuel?

I’ve been revisiting some now seemingly old links from the 2008 election.

Folks will likely remember the Paris Hilton response ad to McCain comparing Obama to her.

Paris announces her energy policy as presidential candidate.

Some folks might not have seen the follow-up, where Paris seeks the advice of our greatest fake president, Martin Sheen.

Paris with Martin Sheen

And while we are discussing fake presidents, one that might have been a fake president as vice president is our own governor Sarah Palin, topping the list of memorable quotes of 2008.

I attended the Healy and Delta Town Hall meetings that GVEA held last week regarding the G&T. Maybe a total of 8-12 people came to each meeting. With the input provided by attending members and the staff, I’ve prepared some talking points reflecting my view of this. I will say that, at these first two Town Hall meetiings, GVEA seemed at least willing to acknowledge some of the cons to this proposal.

Since that time, I’ve had other questions from GVEA members and I encourage anyone with question or comments make them in the comment section provided at the end of this blog entry. Just click on “comments” – they can be left anonymously or not.

The final Town Hall meeting will be at Noel Wien Library Auditorium in Fairbanks at 6:30 pm Wed, Nov. 15, 2006. Hope to see our member-owners in attendance, prepared to ask questions. I provide the following to offer my perspective to members in advance.

GVEA members asked to vote to give away $300 million of GVEA assets in exchange for $50 of savings per year and reduced capital credits

Ballots to be in mail November 20, 2006

  • If GVEA members approve this transfer, it is the last vote GVEA members will have on anything to do with these assets.
  • If approved, GVEA G&T can sell these assets whenever they want to any entity without any say by GVEA members.
  • If approved, GVEA members become more disconnected from having input on setting of rates, as the cost of purchasing and transmitting the power will be controlled by the G&T, not by GVEA.
  • If approved, GVEA members have no rights to call a meeting or elect the GVEA G&T Board of Directors. Directors of the G&T do not even need to be GVEA members or Alaska residents.
  • If approved, GVEA members will be even more shielded from knowing about the finances of G&T than they are with the finances of GVEA. GVEA members will be even further disconnected from decisions that affect them.
  • If approved, GVEA will be substantially reducing the capital credits program in the future.
  • GVEA members have no right to address the GVEA G&T Board of Directors (though may have the right to be present at meetings, if you can happen to find out when and where).
  • The GVEA G&T may choose to remove themselves from regulation by the only outside experts that look after the public interest, the Regulatory Commission of Alaska.

    Discussion

    GVEA is proposing to transfer all generation and transmission assets owned by GVEA member-owners to a new company called for short, GVEA G&T. This company is structured as a cooperative with only one member, GVEA, as represented by the GVEA Board. Approval of this proposal only requires 10% of the membership to vote and a majority of those voting to approve. You will see ballots in the mail after November 20, 2006. If approved, GVEA G&T could sell these assets, our power plants, tie-lines, and substations, whenever they want to any entity without any say by GVEA members. This proposal is complex, so let me try my best at an analogy.

    As members of a condominium association, every condo owner gives title to their condo to the building manager for which they get a non-binding promise that the new owner will keep their rent down by being able to pay less interest on loans. The Condo Association directs the building manager, the condos can be sold without the residents’ approval. Complicated, yes. Does it make economic sense? Perhaps. GVEA says residential members might save $40-50/year each with this proposal. Is it worth giving away control of our assets? Personally, I think not.

    IF GVEA members approve this transfer, it is the last vote GVEA members will have on anything to do with these assets. GVEA board members are not assured of a majority on the GVEA G&T. In fact the draft GVEA G&T bylaws only require 40% representation.

    If approved, this will substantively reduce the capital credits program, as the margins now required and later rebated to the members will not be collected. This amount constitutes what GVEA calls a $30 million savings, but is not actual savings as this amount is now paid back through capital credits.

    The model proposed for the G&T is unusual in that it is a co-op of only one member, something that occurs with only one or two other electric coops in the United States. It is possible that the G&T could choose to remove themselves from the regulation by the Regulatory Commission of Alaska (RCA) which examines utility actions in the public’s interest. This could further reduce members’ ability to decide on matters that affect our rates.

    GVEA has other ways to save money, such as reducing administrative, travel, and legal expenses, equipment purchases, and less ambitious large projects. GVEA is known by the business community as always wanting things to be first class, but in lean times (GVEA lost money last year), businesses try to conserve.

    While your cost of electricity has gone up dramatically partly because of increased fuel costs, GVEA has taken on a large number of expensive projects. GVEA members will have even less input into the G&T, though we will pay the cost of these projects by having to purchase power from the G&T. GVEA has actively solicited large power users such as Ft. Knox and Pogo Mines to buy from GVEA, requiring ever larger power needs. These all have been approved by your GVEA Board of Directors.

    There is very little communication between GVEA members and their district representative. Some argue that GVEA members aren’t interested in their co-op except when $1000 prizes and free light bulbs are offered at the annual meeting. I’d suggest that, for all the talk about member-owners being represented by their board, the GVEA board could do more to engage the membership. All the communication you get are GVEA staff generated, such as the Ruralite, bill inserts, website, and other mailings. District meetings were abolished in favor of voting by mail for board. Why can’t board members be encouraged to meet with those they represent? While there is a Membership Advisory Committee, GVEA members have no contact information for these members and the MAC has no means to communicate with members in their district except one-one.

    Ultimately, the choice on whether to give away the generation and transmission assets belongs to GVEA member-owners. GVEA must have the members’ vote – it is required by GVEA bylaws. But there is no turning back. If the members approve, these assets are out of GVEA members’ control forever. I intend to vote NO on Item 1 on the ballot.

    Please note: Item 2 on the mailout ballot is to allow all but board members and their spouses to participate in GVEA’s alternative energy program. Since we want as many people as possible to participate, I recommend approval on this item only.

  • The GVEA board met Oct. 23, 2006 and took action on a number of items, even if I wasn’t there (:-).

    They approved the ballot to go to the GVEA membership. There are two ballot items, one to allow all but board members and spouses to participate in Alternative Energy programs (SNAP), where currently extended relatives and employees can’t. This isn’t controversial and makes sense for as many people as possible to participate in everyone’s best interest.

    The second ballot measure is the transfer of GVEA power plants and hi voltage transmission lines to a separate company, GVEA G&T, that is run by GVEA (board and staff), not by the members. There was a motion approved to have the board of GVEA be the representatives on the GVEA G&T. The motion to approve this ballot measure and the vote on the bylaws themselves referenced in an earlier blog was 5-1, with board member Tom Delong on record opposing the G&T transfer.

    An interesting aspect is that, now that the board took a vote in the affirmative, ALL board members are supposed to officially support it. This is in accordance to a board policy that was written to insure that the board appears to be all one big happy family to the public. They would likely say that they don’t want to be like other more fractious utilities in Alaska like Chugach or MEA.

    This policy is very undemocratic and unhealthy, much like my view of some national administrations. GVEA will argue this is common for private companies, but GVEA is a quasi-public company that represents 35,000 families and businesses throughout Interior Alaska, more than the Fairbanks North Star Borough, the school district, and certainly any Interior city. Democracy can be messy, but the outcome of actions becomes better than under the veil of secrecy.

    I’ve thought that this stifles the ability and responsibility of board members to communicate to their constituents. Even the MAC Committee, supposed to foster this communications, is pretty much just a small extension of the board. The membership as a whole remain cut out unless they actively jump in. GVEA doesn’t even list the MAC member contact info on the website. I asked for this list from GVEA, but got no response, as the posted list is out of date. Why doesn’t GVEA have a way for directors to communicate with their constituents? I’d feel claustrophobic as a director.

    I was told that the last and only time the G&T company met was in July 2005, despite a requirement to hold annual meetings. The minutes are not publicly available as they haven’t been approved. Now that the G&T board is totally different, it seems odd to have people who weren’t present approving the minutes.

    I’m told that Dwight Nissen, board member from Delta area district, resigned for health reasons. Nominations are already being taken.

    At the GVEA special board meeting Oct. 16, 2006, the board tweaked their recommended bylaws for the G&T (Generation and Transmission) cooperative and approved sending the proposal to the GVEA members, with only one board member opposed. I’ve linked the final bylaws as well as my extended comments to the GVEA board.

    The board will be taking this up one more time Oct. 23, 2006 to approve the ballot language and dedicating funds and hearing a staff plan for communicating this proposal to members. If it is to pass, it must be approved by a majority of GVEA members and at least 10% of our membership must vote.

    As readers of previous entries realize, I am not in favor of this proposal and will vote against it. It really comes down to us member-owners of GVEA giving up our $300 million assets (BESS, Healy Power Plant, N.P. power plants old and new, and all our major and minor tielines to this G&T cooperative (of only GVEA) in exchange for the promise of reduced interest rates for the loans out on those assets that are to be transferred to the G&T. The implication is that our electric rates will be reduced by about $30 million over the next 5 years, but GVEA has said we probably won’t see rates go down, suggesting that they just won’t go up as much.

    I think that the trade-off of possible reduced rates isn’t worth giving up control of our assets. The G&T will be controlled by a board that may have representatives of the GVEA Board on it, but I expect it to be weighted toward GVEA staff, as it is now totally composed of. I also believe that, as GVEA will be purchasing wholesale power from the G&T, we member-owners won’t have the transparency or input that we currently have, particularly with respect to the cost of power. GVEA will become a much smaller operation.

    Some have suggested that this is an attempt for GVEA to get some of its operations out from under state regulatory authority (RCA). I believe that GVEA and most utilities would be happy to run their own show without the perceived interference of regulation. I also believe that these regulators help protect the members’ and public’s interests.

    If you have read this far and follow the earlier links and blog entries, you can make up your own mind and be an educated member when presented with the glowing scenario by GVEA.

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