OPALCO democratic principles tested by broadband initiative | Guest column
January 14, 2013 · Updated 1:05 PM
By Gray Cope
For OPALCO to preserve its foundational cooperative principles, the venture into a new consumer broadband business requires the approval of at least two-thirds of its members.
Not many OPALCO members understand they became owners in our cooperative when they signed up for electric service and agreed to a contract that binds them and our cooperative to a legal relationship. Sounds way more serious than paying your monthly electric bill, right?
Well, it is.
However, a non-profit electric cooperative can be a beautiful way to do business if its democratic foundational principles are preserved. OPALCO is organized under seven cooperative principles. Read here: http://www.opalco.com/about/what-is-a-coop/
The 2nd principle is democratic control by the members who actively participate in setting policies and important decisions.The 3rd principle is all members contribute equitably to and democratically control our cooperative's capital.
Our cooperative's earlier boards clearly limited our purposes for existing to providing electric service, electric energy distribution, storage, and generation. They did not want us to dilute our focus into other business ventures and used plain language to explicitly state our purposes, and did not provide a clause like “and for any other legal purposes.”
The exact wording only takes a few minutes to read on page 20 at http://www.opalco.com/wp-content/uploads/2009/02/bylaws-12-11.pdf
Those earlier boards understood state law requires two-thirds membership approval to alter our purposes and go into an entirely different line of business.
This is as it should be. Otherwise a simple majority of board or membership could have us expand into public transportation or anything else that seemed like a good idea. In this case we would be expanding into the information super highway. Democracies often require super-majority approvals to make profound changes.
The proposed consumer broadband changes are foreign to our legal purposes and huge in relation to our cooperative. Based on the latest numbers provided by OPALCO, the first 10 years may cost members about $76 million (to build, operate, maintain, and loan interest).
That is about $7,075 for each member over 10 years regardless if they subscribe to OPALCO broadband. Annual maintenance costs are estimated at $1.5 million continuing beyond that. All to be paid by our members if the broadband revenue is inadequate. (Follow link below for detailed calculations. Some members may pay more, some less.)
OPALCO's broadband may have only 35 percent member adoption based on subscription costs, coverage constraints and consumer choices. Our plant assets could increase 42 percent and maintenance could double.
Our board previously announced they solely would make the decision whether our cooperative branched out into consumer broadband and telecommunications. To their credit they seem to be adopting a new approach. They have shifted from a promotional process to one of eventually presenting our membership with the facts and letting us decide.
Unfortunately, our board appears to want to avoid a legal modification of our cooperative's purposes. Rather, I was told they are considering an alteration to the by-laws and a vote through buy-in. I explain why this may expose our cooperative to legal action in my letter presented to the board in November. You can read it at the link below.
With about $.75 million spent on the consumer broadband initiative/study, I am looking forward to the release of our hard working staff and board's information needed to make a well-informed vote. I remain undecided and I have a list of questions I look to answer when our board releases their information. See link below.
OPALCO's governing cooperative principles, explicit purposes, articles of incorporation, plus state law and respect for our members' ownership rights require a two-thirds approval of our members to expand into consumer broadband and telecommunications. Both our democratic cooperative and governing principles are worth preserving.
More information available and your comments encouraged at http://opalcowireless.boards.net
— Editor’s note: Gray Cope, a 41-year resident of San Juan Island, describes himself as pro-broadband Internet, believes that electric cooperatives deserve to be unregulated by the state, supports Internet neutrality, and is grateful to the OPALCO board and staff for their hard work to guide the cooperative into the future.