socorro electric cooperative

New Mexico co-op faces opposition by city

socorro electric cooperativeSocorro, a New Mexico city of 72,000 about 75 miles south of Albuquerque, is seeking to pass several ordinances concerning the governing of its electric cooperative, including one that will establish an electric utility to compete with the co-op. The current situation is the end result of nine years of contention, polarization and distrust between the co-op and the city. The case is a valuable lesson for other co-ops and their boards who don’t want to end up in a similar situation.

The Socorro Electric Cooperative (SEC) is a rural non-profit cooperative serving 12,000 consumers living in Catron, Cibola, Sierra, Socorro, and Valencia counties. It was founded in 1945, but over the past decade that the relationship with residents has deteriorated.

The primary points of contention during this time have been the co-op’s spending practices, how it conducts business, and the lack of public access to co-op books, records and audits. In 2008, a member-led reform committee released a report that expenses incurred by the cooperative far exceeded those of the other 15 electric cooperatives in New Mexico. Other complaints included members not being allowed to attend meetings and alleged overuse of executive session at board meetings.

This led to the SEC Reform Committee officially calling for several new bylaws in 2009, including some that would address the lack of transparency.

  • Call for the board to voluntarily follow the Open Meetings Act and Inspection of Public Records Act.
  • Allow members access to co-op books, records and audits, with the exception of records protected by the Privacy Act.
  • Allow member-owners and the media to attend co-op board meetings and that a portion of the meeting be set aside for public comment.
  • Announcements of meetings are to be made in billing statements and advertised in local newspapers.

Despite opposition from the board, the members approved the proposed bylaws, including those provisions requiring transparency. The co-op then filed suit against all 12,000 of its members, filing in state District Court in Los Lunas because all judges in the 7th Judicial District are defendants in the case. The two newspapers in Socorro were named as defendants.

In the suit, the SEC is asking that the judge declare the bylaws null and void, and the co-op be awarded costs and reasonable attorney’s fees for bringing the lawsuit. The suit is still working its way through the courts.

After an extensive legal study, the SEC board then submitted in March 2015 a proposed list of 96 new bylaws. The members voted in April to approve the new bylaws, but dissenters complained about the single “all or nothing” vote as well as the fact that the vote was held prior to the annual membership meeting in May that would have allowed the membership to discuss the bylaws. On the bylaws themselves, dissenters claimed three main points as not being favorable to members:

  • Having to pay a certain electric rate in perpetuity.
  • Not being able to reap the benefits of generating personal renewable energy for equitable tax credits.
  • The co-op board’s ability to expel a board member through a majority vote, which would not involve the member-owners.

In response to the continuing squabble, the mayor and the Socorro City Council introduced three ordinances dealing with the co-op.

  • The first ordinance will be the franchise agreement, including “things in it that we feel will protect our citizens from practices of the co-op that we think, hopefully the council thinks, are unnecessary and are counter- productive.”
  • The second ordinance will provide for the city to become an electric utility so that the SEC is no longer the sole source of electricity in Socorro.
  • The third ordinance will set up a board of independent citizens, similar to the Police Oversight Commission, that “will look at the practices of the electric co-op as to whether they are satisfying what is intended by the Public Regulation Commission as far as rate structure treatment of their customers.” The oversight board will have a separate legal entity attached to it just as the POC has.

The mayor of Socorro believes it will take about six months for the ordinances to take effect, hopefully, he says, in an orderly fashion. The Socorro City Council recently approved a resolution to commission a feasibility study exploring the possibility of separating from the Socorro Electric Co-op.

Co-ops across the nation have been watching the contentious relationship between the city and the SEC, and are anxiously awaiting the outcome. Hopefully, these co-ops are also taking some cues on how to avoid ending up in a sequel to this show.

References

Socorro explores setting up its own electric utility (Albuquerque Journal, Friday, 19 June 2015)

Mayor explains plans for electric co-op ordinances (El Defensor Chieftain, Thursday, 21 May 2015)

Mayor, council declare ultimatum for co-op (El Defensor Chieftain, Thursday, 7 May)

Members approve SEC bylaws (El Defensor Chieftain, Thursday, 30 April 2015)

Co-op members to cast vote on proposed bylaws (El Defensor Chieftain, Thursday, 19 March 2015)

Co-op hears recommended bylaw changes (El Defensor Chieftain, Thursday, 5 February 2015)

Socorro Electric Board shoots themselves in foot (Socorro News, Sunday, 11 July 2010)

Socorro Co-op sues members (Albuquerque Journal, Saturday, 10 July 2010)

 

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