Wednesday, December 24, 2008

Big electric co-op in trouble; board has a conflict

Kentucky utility regulators made an accounting move yesterday to help East Kentucky Power Cooperative stave off some creditors and ordered a management audit, saying the co-op's "worsening financial problems raise questions about its continued viability." It has suffered setbacks recently in an air-pollution case and a failed attempt to expand its territory.

EKPC, which generates and trasmits electricity, is owned by 16 small co-ops that distribute power to more than half a million consumer-members -- and that each have one director on the EKPC board. The state Public Service Commission said those directors have a conflict of interest because "They must balance East Kentucky Power's need for revenue with the desire for low electricity rates for its customers," Jim Jordan writes for the Lexington Herald-Leader. "The customers' desire for low rates can hurt the long-term health of the company." (Herald-Leader map)

Many other generation-and-transmission cooperatives have similar board structures. Does yours? How's it working?

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