Five OTEC Issues to Consider in the New Year

 

I took a break after the election, but now that we are into the new year it is time to get back to addressing some of the more troubling practices of OTEC. I will begin by outlining some of the issues that have come up since I attempted to educate myself about the history and complex business of our non-profit, public service, corporate, electrical cooperative. In future posts I will deal with these issues or portions of these issues by relating my experience when asking questions of OTEC representatives, and trying to meaningfully participate as a member.

Primary Issues:

1.  Violation of the Cooperative Principles

Oregon Trail Electric Consumer Cooperative (OTEC) interacts with membership in ways that violate the cooperative principles, and which undermine democratic control by the membership.

Cooperative principle number two reads in part:

        

DEMOCRATIC MEMBER CONTROL

Cooperatives are democratic organizations controlled by their members who actively participate in setting policies and making decisions.

Cooperative principle number five reads in part:

EDUCATION, TRAINING AND INFORMATION

Cooperatives provide education and training for their members, elected representatives, managers, and employees so that they can contribute effectively to the development of their cooperative.

-OTEC violates these two principles by lacking transparency and denying information to the membership—information that is crucial for both understanding the operation of the cooperative, and for meaningful participation in the cooperative. For the most part, they only tell you what they want you to know--not what you need to know—about how they operate.

-They refuse to release rate studies and other information that members need to understand whether rates are fair and equitable to all members.

-Except for information about a few job categories that the law requires them to release information about, they refuse to disclose information concerning wages and benefits paid for most job categories. This behavior leaves the membership unable to evaluate overall employee compensation. It is clear from the Form 990 disclosures that the upper echelon administrators are paid far more than other administrative positions in city, county, state, or federal government.

-OTEC representatives have both cut off communication about member concerns without adequate cause, and have placed unreasonable and discriminatory requirements on member communication. I believe they have done so in order to avoid responding to questions and concerns in writing.

-They disseminate misleading or false information to the membership through Ruralite magazine and other public relations media.

-They also have undermined democratic control 

• by manipulating availability of director candidate information for members,
• by appointing nominating committees that do not seek out candidates, 
• by not change membership of nominating committees yearly, 
• by putting announcements of director election on the back pages of Ruralite,
• and otherwise by not vigorously promoting candidate search, elections, and democracy in general.

2. Capital Credits and Pet Projects

Oregon Trail Electric Consumer Cooperative (OTEC) spends the membership's money on the pet projects of Directors that are not reasonably related to or consistent with the mission of OTEC as outlined in the Articles of Incorporation. In the process, they ignore other projects that would comply with the mission of OTEC, such as helping members acquire solar energy. They also mislead the membership about these expenditures by telling membership that they must spend member's money on these pet projects and by stating that they don't affect rates, neither of which are true. 

3. Compensation

While OTEC has refused to reveal salaries and benefits for all of their employee positions, they are required by federal law to reveal some information in their annual filing of IRS Form 990, including the compensation of their nine or ten "'key employees."' As they routinely file for extensions on the Form 990 filing, it usually takes a year for the information to become available. I will post some of that information and speculate about whether other employees are adequately or excessively compensated from the available information. For example, OTEC members may want to ask themselves if it is necessary to pay the OTEC CEO total compensation of $400,656.00, which is about the same as what is paid to the President of the United States.

4.  The Tsunami of Propaganda

The use of Ruralite and other media, along with public relations employee positions to promote propaganda inflating OTEC's image as a socially responsible cooperative partner while ignoring the facts: 

• that their pet projects fly in the face of the mandates in the articles of incorporation, 
• that OTEC cuts off financially struggling members in winter, 
• that their rate structure does not encourage conservation, 
• and that their pet projects provide little benefit to the vast majority of members.

5. The High Monthly Service Charge and capture of members, including exorbitant forced monthly service charges even when members have left their homes for long periods and are not using electricity.
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In the weeks and months ahead I will post more information dealing with the five primary issues listed above, but for now I will post the articles of incorporation and some information from the latest available Form 990 for member perusal. The Form 990 for 2017 just became available as it was apparently not filed until December 2018, and it was only available from OTEC as it has yet to be posted at the IRS or Guidestar.org.

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What Do OTEC's Articles of Incorporation (< Link to Articles) Say About Pet Projects?

Please notice that there is no reference in the Articles of Incorporation to a philanthropic or charitable purpose that is unrelated to providing essential electrical energy to members. OTEC was formed to provide its members with the benefits of electrical energy, not to become a philanthropic foundation serving the special interests of nine directors. Other charitable foundations adequately fulfill that function. When OTEC takes the membership’s money to give to individuals for purposes which are unrelated to the provision of essential electrical energy, such as monetary awards or trips to Washington D.C., it begins to look more like political patronage, wherein favors are given in return for political support.

2017 Form 990:

OTEC listed the number of employees as 89.

Here is page one of the 2017 Form 990 with some basic information.

Form 990 p. 1

Here is p. 2 Schedule J, of the 2017 Form 990 listing total compensation for highest paid employees:

Form 990, Schedule J, p. 2

Here is p. 7 of the 2017 Form 990 with information about Director and key employee Compensation:

Form 990, p. 3

Here is p. 8 of the Form 990 with information about Director and key employee Compensation:

Form 990, p. 4

2016 Form 990:

Here is page one, five, seven and eight of the 2016 Form 990 with some basic information:


Pp. 1, 5, 7,& 8 from 2016 Form 990

Here is p. 2 of Schedule J, of the 2016 Form 990 listing total compensation for highest paid employees:

p. 2 of Schedule J, of the 2016 Form 990

Here is p. 2 of Schedule J, of the 2015 Form 990 listing total compensation for highest paid employees:

Page2 from Schedule J, 2015 Form 990

Here is page one through eleven of the 2016 Form 990 with some basic information:

Pages 1-11 from 2015 Form 990

More Later. [Edited for clarity on January 15, 2019 and more Form 990 information added on January 22 & 23, 2019]