At its Oct. 20 meeting, the Pedernales Electric Board of Directors took an important step in supporting environmental efforts, unanimously passing a resolution setting a goal for 30 percent of its power supply to come from renewable energy sources by 2020. The resolution, submitted by District 7 Director Dr. Patrick Cox, District 3 Director Kathryn Scanlon and District 6 Advisory Director Dr. Charles Tesar, was taken up in October after being tabled at the September meeting. The renewable power resolution, combined with a September resolution setting a goal to reduce energy consumption by 20 percent, moves PEC to the environmental forefront among electric cooperatives.

The Cooperative also received a $6 million credit from its wholesale power supplier, the Lower Colorado River Authority. The credit — PEC’s portion of LCRA overcollections — offsets a tentative fuel charge increase that was to be passed through to the Cooperative’s members. The credit lets Pedernales Electric defer any rate changes until the end of the first quarter of 2009, when recommendations from its ongoing rate study will be available.

PEC Assistant General Manager Paul Hilgers reported on the status of contract negotiations with the LCRA, outlining fundamental principles that are driving the negotiations. “We feel these negotiations are continuing to be successful,” Hilgers said. “Our plan is to present the contract to the Board at an executive session on Nov. 10.” This upcoming session will provide details on all the contract’s provisions, giving Board members an opportunity to thoroughly review the proposed document. The goal is to bring the contract to the Board for a final vote at the Nov. 17 Board meeting.

Representatives of C.H. Guernsey & Company, the consulting firm conducting Pedernales Electric’s rate and cost of service study, presented a preliminary report on the project’s progress. The study’s philosophy is to balance the Cooperative’s financial objectives with rates and fees charged to members, while ensuring results are defensible, reproducible, financially sound, non-discriminatory and based on the cost of providing electric service. The next step in the study will be preparation of an initial draft with preliminary rate designs, which will be reviewed by PEC staff. After the review and staff input, a final draft will be prepared and submitted to Cooperative management, then the recommended revenue requirement and rate designs will be submitted to the PEC Board for approval. Notice of any rate or fee changes adopted by the Board will be provided to Cooperative members, and a series of informational meetings will be held to educate members on any revisions before changes are implemented.

Director Cox provided an update on the Texland Electric Cooperative litigation, noting that Cattleman’s National Bank has retained new legal counsel and amended its interpleader petition to include the LCRA as a party to the suit. Cox reported that Texland has received 15 boxes of records from the law firm of Moursund, Moursund, & Moursund. Cox disclosed that these Texland files indicate additional payments from a separate Texland bank account were made to Bennie Fuelberg and W.W. “Bud” Burnett, who were PEC’s general manager and Board president at the time, and to A.W. Moursund, who was then the Cooperative’s general counsel. “It is our intent,” Cox said, “to keep the Board and membership of PEC as informed as possible about transactions and information related to Texland Electric Cooperative.” Detailed information will be presented to the Texland board at its upcoming meeting on Oct. 22; information on the meeting can be found at www.pec.coop.

The Board approved the transfer of a small tract of Cooperative property to the City of Wimberley. The parcel, less than one-sixth of an acre in size and located in downtown Wimberley, was originally slated to hold a Pedernales Electric transmission tower. The transfer was approved with the stipulation that the tract stays in the public domain.

The Board also approved a resolution to approve a timeline to publicize and gain member comment on upcoming Public Utility Regulatory Policies Act standards. These federal standards, amended in 2007’s Energy Independence and Security Act, call for integrated resource planning, rate modifications to promote energy efficiency, consideration of “smart grid” investments and “smart grid” information. The federal statute calls only for consideration of the proposed standards; PEC will make its own decisions on adopting the standards based on input from members. The approved Board resolution allows the Cooperative to post notice of the standards as early as December 2008.

Director Cox, representing the Board’s Governance and Oversight Committee, presented a report on 2009 governance and election issues. The presentation included a proposed timeline for the election process, and items to be reviewed by the committee, including: exploring the possibility of changing the voting system to one member, one vote; the idea of rebalancing Director districts to ensure equal membership representation; and reviewing nomination and residency requirements. The Board also considered the possibility of eliminating Advisory Director positions.

The Board ratified a special “energy only” rate for victims of Hurricane Ike, allowing the few new PEC members who fled the storm and moved into the Cooperative’s territory to begin receiving electric service without paying an establishment fee. The Board also voted to replenish the PEC Scholarship Fund, which provides $1,000 scholarships to 50 area students whose parents or legal guardians are Pedernales Electric members. The last item of business was to authorize holding the Nov. 17 Board meeting at the PEC Training Center, 1506 North U.S. Highway 281, in Johnson City. The meeting will begin at 10 a.m.

During the member comment portion of the meeting, comments ranged from support of the Cooperative’s renewable energy goal, to suggested management employment contract provisions, to thanks for recently issued capital credits. The Board voted to add an afternoon session of member comments and extend the comment time limit to three minutes. Members will be able to speak in either one, but not both, of the member comment sessions.