Co-op member-regulation tally available soon
After months of promotional speaking engagements and a rigorous advertising campaign, Delaware Electric Cooperative (DEC) officials will soon know if their members voted to eliminate Public Service Commission-regulation.
“We have received a tremendous response from our members,” said Bill Andrew, the president and chief executive officer of DEC. “They have exceeded all expectations. I have all the confidence in the world that our members will do the right thing.”
Currently, DEC is regulated by its board of directors and the PSC. Eliminating the PSC regulation — a move favored by the 11-member elected DEC board of directors — officials say, would save response time and money.
Each year, for instance, DEC spends about $330,000 on an annual PSC assessment. On average, it spends another $170,000 on hearings before the commission for things such as rate changes or what DEC Vice President Layton Wheeler called “terms and conditions.”
Recently, DEC officials have appeared before the PSC for issues with testing meters and changing pole lamps in certain Sussex County subdivisions.
Such problems — if the vote was passed — could be solved more quickly among the board of directors, who are elected every three years by DEC’s 65,000 member-owners.
“We will still be member-regulated but we save on average a half-million dollars every year,” Andrew said in an earlier interview. “We are owned by our membership. When we conserve, we conserve our business model.”
However, savings would not be realized until next year if the vote is passed, because of the money spent on the campaign to convince members to vote for eliminating PSC regulation. Andrew said that the company budgeted $528,000 for on the campaign, which has been obvious to Sussex County residents and visitors through yard signs, media advertisements and informational pamphlets stuffed into bills. Just more than $220,000 had been spent on the campaign through June, Andrew said.
“That’s a business expense. We looked at it to be a one-year payback,” Andrew said. “It hasn’t just been a vote campaign; it’s been an educational campaign.”
Eliminating PSC regulation, though, would eliminate a check on the DEC board, making it the only governing body overseeing the interests of those 65,000 member-owners.
DEC Vice President Layton Wheeler — who along with Andrew has been promoting the vote at speaking engagements and informational meetings in both counties for months — dismissed possible complaints that the DEC board would take advantage of its customers.
“We are committing to our member owners that when we become member-regulated, it’s business as usual,” he said, adding that 82 percent of the nation’s about 900 cooperatives are member-regulated. “Our service is second to none. Our rates are among the best. Nothing is going to change. Our rates are going to increase, but they’re not going to increase as a result of member regulation.”
Andrew said that DEC rates have increased by about 8 percent in a year, and another 2 percent increase is pending. But he agreed with Wheeler, saying that member regulation will allow for more savings, not irresponsible decision-making on the part of the member-elected board.
“The directors are elected every three years,” Andrew said, adding that those board members are rate payers as well. “That’s a check and balance, just like the legislature. That’s the true American way.”
Andrew said that DEC made member regulation part of its “strategic plan” to operate more efficiently in January of 2005. In November of 2005, the 11-member board voted unanimously to approve the vote.
“The entire board is in favor of this,” said Jack Sparks, who represents the Bethany Beach area on the board. “It will mean a savings for our members.”
