Letter - Valley customer questions acquisition

In regards to the buyout of Valley Electric Membership Corporation by SWEPCO, I would like to express my opposition to this proposal. As a landowner on Toledo Bend in the Many area, I am concerned that the policies of a privately held corporation will outweigh the concerns of the consumer.

Valley is a cooperative, owned by the individuals that use the system. Being a member–consumer of our co-op means we, along with our neighbors, own the company and have a voice in the decisions made on our behalf. And that is a fundamental difference between our local electric co-op and other energy providers. Cooperatives are not-for-profit organizations.

Cooperatives are guided by a set of seven principles:
1. Voluntary and open membership
2. Democratic member control.
3. Members Economic Participation.
4. Autonomy and Independence.
5. Education, Training, and Information.
6. Cooperation among cooperatives.
7. Concern for community.

Granted, the rates in the recent months have been volatile, the mission of a cooperative is to provide retail electric power to homes, businesses, and industrial customers with the most reliable service for the least-possible cost. That’s why securing long term energy generation contracts is critical to the cooperative. Other coops in our state have as long as 25 – 30 year power agreements with their generation facilities and have maintained some of the lowest energy costs.

Valley Electric is one of 11 rural electric cooperatives in the state. Founded in 1937, it was one of many rural electric cooperatives established in the United States after President Franklin D. Roosevelt created the Rural Electrification Administration when he passed Executive Order No. 7037.

REA men and women traveled in teams, spreading the word to “get lights”. Many found it better to make their pitch to the farmer’s wife because she was still washing clothes by hand.

The for-profit electric utility companies didn’t want to serve rural America because they wouldn’t make much money. They’d have to build out their transmission services to places where fewer people lived. In the cases where the utilities were willing to provide electricity to farms, they required the rural customers to pay the high cost of extending power lines to their farms and often charged rural customers double the price for power that urban residents paid.

Let’s face it. Most folks don’t have the time or interest to get too involved in the details of providing safe, reliable power. Most are too busy with their own jobs or families to have the time to focus on theses issues. So that’s where your local co-op comes in. Their job is to be your advocate – to put you first – as they work in the energy industry on your behalf – not on behalf of their stockholders.

Consumer ownership means co-ops are more accountable and responsive to local needs. Electric Cooperatives are small enough to listen and close enough to notice the needs of a single consumer. As not-for-profit companies, cooperatives offer stability and reliability and better value for consumer/owners. Serving more than 35 million consumers nationwide, America’s consumer/owned electric co-ops are technologically advanced, professionally managed, and large enough to meet your needs for reliable, low-cost energy.

Recently, SWEPCO has constructed a new Generation Facility in Southwest Arkansas. Who do you think will pay for this? The consumer will, and the shareholder will expect a return on their investment. Low natural gas prices have brought their rates down recently, but with increased demand those rates cannot remain stable.

SWEPCO will have to pay for the assets of Valley and assume any debt. In addition to this, they will have to pay each member for their Capital Credits (or shares) in Valley. Then we lose all voting rights in a democratic system that our country was founded upon.

If an alternative plan were submitted with another Louisiana Cooperative, we the membership/owners, could maintain ownership in the Cooperative. Therefore, the total amount of the purchase would be less because the other co-op would not have to purchase the Capital Credits. These funds could be re-invested into the system, to ensure the highest levels of service for existing customers and for the future needs of rapidly growing communities in the service area, and we maintain ownership of our system.

Low rates are no bargain if your electricity isn’t there when you need it. With a modern distribution system, experience and resources can restore your power quickly, even in the aftermath of natural disasters such as hurricanes.

So, I ask you, would your rather depend on a member-owned, locally involved provider of electrical distribution, or depend on an Investor Owned Conglomerate like SWEPCO who is responsible for supplying electrical power to 473,000 customers in three states with shareholders who expect a return on their investment?

I urge you to vote against this dissolution of Valley on Saturday, January 30, 2010. We need to send a message to reform the Board of Directors intentions and directions of this Cooperative. If any change needs to be made, maybe we need a new Board of Directors. At our next annual meeting, this can be accomplished.

Signed,
Francis Delhomme, Valley Electric Corporation Member
Many, La.