Blocked bylaw proposals at Virginia’s largest electric cooperative prompt complaint to state regulators

Three longtime members of Rappahannock Electric Cooperative (REC) have filed a petition with the State Corporation Commission (SCC) in an effort to force a vote on more transparency at the organization.  The non-profit public interest law firm Appalachian Mountain Advocates filed the petition on their behalf.

The petition seeks an injunction from regulators at the commission that would force the cooperative’s board to put a series of proposed bylaw changes to the membership for a vote.  The bylaw changes the group wants a vote on include: allowing co-op members to attend or observe Board of Directors’ meetings and requiring the board to post videos of meetings; requiring REC to disclose the total compensation paid annually to each board member; and new rules around proxy ballots for voting on board members.

The group argues that the lack of transparency around board meetings makes it “nearly impossible to determine whether REC board members are informed and engaged” and “impossible for members to cast informed votes for board candidates.”  “All we’re asking is that REC’s board members live up to the cooperative principles they claim to follow,” Murphy said in a statement.

The co-op claims that the nine members of the board of directors, who are elected by REC members, are not salaried employees.  Member Seth Heald’s compilation of tax filings shows REC has paid its board members more than $4.1 million over the past 11 years.  “Our bylaw amendment on this would just make it easier for all co-op members to see, including the many members who likely have no idea that the board of their nonprofit co-op is paid at all,” Heald said.

In a statement, Matt Faulconer, a spokesman for the cooperative, said the board of directors “fully respects our members and the democratic process of governing their cooperative,” adding that it was “unfortunate” the issue was brought to the SCC.  Faulconer said the petition will be “addressed within the applicable legal forums.”   “Threats and actual litigation by special interest groups at the detriment of our membership must be defended,” he wrote.