NATCHITOCHES–A recent election involving the sale of Valley Electric Membership Corp. (VEMCO) to Ohio-based AEP-SWEPCO (Southwestern Electric Power Company) is being challenged by members of the locally-owned electric cooperative.
The challenge has also gained the support of the Association of Louisiana Electric Cooperatives (ALEC). ALEC agrees with the petition’s claim that the election was not legal.
“The law is very straightforward. Member-owned electric cooperatives have the right to sell their cooperative if they choose to, but it clearly requires that a simple majority of the entire membership – in this case about 16,000 - must make that decision at a duly held meeting. The number of members who voted on Jan. 30 falls well below that requirement. There is also some doubt that this was even a duly held meeting,” said Randy Pierce, CEO of ALEC in Baton Rouge.
The petition was filed in district court on Jan. 28 and seeks a declaratory judgment on the recent Jan. 30 election.
More than 7,300 member/owners voted to approve the board’s plan to sell the cooperative to SWEPCO; however, that number represents less than 25 percent of the total 33,000 membership of VEMCO, according to the suit.
VEMCO members Brian Rivet and Peto Sellers are challenging the election process, claiming that the election was a clear violation of R.S. 12:421 of the state legal code which reads, “A cooperative may not sell, mortgage, lease or otherwise dispose of (the cooperative)…unless such sale… is authorized at a duly held meeting of the members thereof by the affirmative vote of no less than a majority of all of the members of that cooperative.”
Pierce pointed out that less than 25 percent of the total membership showed up to cast their vote, which, he said, "does not reflect the will of the majority as required by Louisiana law.”
He went on to say that there is already a precedent set for similar situations in Louisiana. In the 75-year history of the state’s rural electric cooperative program, Bossier Rural Electric and Teche Electric are the only two other cooperatives that have voted to sell their member-owned organizations to investor-owned utilities, but in both cases more than half the total membership voted to do so.
“Several years ago when SWEPCO bought Bossier Rural Electric Cooperative, they themselves acknowledged that they needed half the membership to vote to sell,” Pierce said.
Pierce said the case is attracting the attention of many of the more than 900 locally-owned rural electric cooperatives around the nation.
“It is important to bring this case up because many states have statutes that pattern Louisiana’s. Louisiana law is very clear on this point and the plaintiffs are correctly seeking a judgment so that hundreds of other cooperatives across the nation won’t be vulnerable to being vaporized without the majority of member/owners having a say in the matter,” Pierce said.
Leesville, La. —
