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CTEC District Three Members Meet in Mason
Wednesday, June 15, 2011 • Posted June 15, 2011

Members of Central Texas Electric Co-op in Board District Three (Mason, McCulloch, Northern Kimble County) met on Tuesday night, June 7, in the Mason Junior High School Cafeteria. The members were welcomed by the co-op’s Chief Executive Officer, Robert A. Loth III. Mr. Loth opened the meeting with the introduction of members of the co-op’s Board of Directors in attendance. They were: Michael Randolph, Board President from San Saba County; Jack Asbill and Riley Kothmann, Board Secretary, from Mason County; Gerald Kaspar, Board Vice President, Stanley Keese, Board Treasurer, and W.C. Stewart, all of Llano County; David. D. Smith and William Weldon of Gillespie County, and Sue Whitworth of Kendall County. Loth introduced a video report highlighting the power supply future at Central Texas Electric Cooperative. Finally, after years of “talking the talk” about LCRA’s Gotcha and Gimmee’s, after countless reports about negotiations and mediations, Loth said he was proud to report that CTEC is now past the talking stage and “We’re walking the walk.” In the video, Michael Randolph explained to members that at a special meeting back in December, the CTEC board of directors voted unanimously to terminate the cooperative’s decades-old Wholesale Power Agreement with the LCRA when it expires in 2016. At the same time, the board directed the CEO to sign a new “bridge” power supply agreement with CPS Energy of San Antonio. He said it seems like these results were a long time coming, but the time spent was necessary to make sure that our members’ interests were protected, and to make sure that the co-op will keep the lights on, at prices the members can afford.He said it was important that the Board looked closely at the past relationship with LCRA because it was a vital one since the time the organization was formed back in 1947. Leaving LCRA was not something that could ever be taken lightly. But several fundamental flaws were indentified with LCRA in their business model - among them, no representation on the LCRA Board, and contracts for lengthy term of 25 years.Knowing that a notification deadline was approaching, the board and staff spent the better part of four years negotiating with LCRA, trying to get them to address the problems in the contract. “As the prospects for a suitable deal with LCRA dimmed, we started looking at other options” Loth stated. “We were driven to find the best power supply available. As I like to say, we turned over a lot of rocks”.Randolph added that options considered were: being an owner of generation assets; and/or partnering with other organizations. Proposals from a number of energy providers were examined. He said, “After years of frustration with LCRA, we were looking for a business model where we would be treated not as a captive, but as a customer”. The CPS proposal provided just about everything CTEC was looking for as it plans its power supply future. CPS is the largest municipally-owned utility in the country with an excellent reputation as a well-run, cost conscious integrated utility that provides more transparency than LCRA. CTEC has been purchasing a portion of its energy requirements from CPS for several years, and they enjoy a good working relationship. The CPS deal provides flexibility (five year term with a mutual option for a two year extension), so long-term power supply options are still open, and CTEC still has an option to secure a portion of power requirements from an alternative source. Most importantly, the CPS contract provides firm prices for the life of the contract – through at least 2021. In contrast, LCRA still can’t say with any certainty what the co-op’s power costs will be in 2013, just 18 months from now. Loth concluded, “The bids submitted by CPS and other providers were carefully scrutinized by staff and by a team of qualified consultants. CPS clearly made the best offer. With LCRA’s price uncertainty, the savings with CPS are difficult to quantify. But every analysis of LCRA’s projected costs suggests that savings will be significant. We’re still under contract to LCRA for another five years. The contract with CPS doesn’t come into play until mid-2016, unless our efforts to get away from LCRA succeed. That’s where our attention is focused now”.The video report concluded with Board President Michael Randolph adding, “It’s clear to me that the leaders of our co-op are “walking the walk” when it comes to our power supply future. I believe we’re also “walking the walk” with regard to the governance of our organization, and the way we stick with cooperative principals”. A couple of years ago the board of directors revamped Central Texas’ director selection process. They took a good process and made it better. They did this by doing away with nominating committees and putting in place a petition process that is open to every qualified cooperative member, with an interest to serve on the board. With a new Credentials & Election Committee, the board placed the process firmly in the control of the members. And by replacing nominations from the floor with pre-printed ballots and candidate biographies, it reduced confusion and provided the members with the tools they need to make a more informed choice when selecting the men and women who will lead the cooperative. Randolph said. “This year the board turned its attention to the thorny issue of director compensation, taking a close look at a policy that hasn’t really changed in 15 or 20 years. You’ll probably be glad to know that as it concerns the amount of director compensation, we still haven’t made any changes. We didn’t think that was necessary or appropriate. But once again, we took a good policy and made it a little better. We did this by setting out guidelines that any future board should consider when looking at significant changes in the cooperative’s director compensation policy”. Loth added, “We’ve talked about contributions the board and staff have made in dealing with some pretty big challenges. There are still plenty of challenges ahead. With the economy stalled and the regulatory and political climate being what it is, there are no guarantees when it comes to affordable, reliable electric energy. I believe we all still have a role to play. It’s up to us, as co-op members, to “walk the walk” and make sure our leaders in Washington get the message”. Randolph concluded, “It’s been said that we should “never doubt that a small group of thoughtful, committed citizens can change the world; indeed, it is the only thing that ever has.” There aren’t many better examples of this than the cooperative movement that brought electricity to rural America”.Loth returned to tell the members present that the CTEC had commissioned the National Rural Electric Cooperative Association (NRECA) to do a member satisfaction survey later this month – noting that members may receive phone calls asking them to participate. He encouraged everyone’s participation to answer a few simple questions in the phone survey. More details about the Member Survey can be found at the Cooperative’s website www.ctec.coop under “Co-op News”.The meeting closed with a question and answer session, and a drawing for door prizes. The Co-op’s Annual Meeting this year is scheduled for August 16, 2011, and will be held in Fredericksburg, Texas at the High School Auditorium.

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