Policy and Advocacy

Alabama Rural Electric Cooperative Scorecard

Rural electric cooperatives (RECs) were established in the 1930s to provide power rural areas not seen as profitable to large investor-owned utilities. In Alabama there are 22 rural electric cooperatives (RECs) providing power to over a quarter of Alabama residents (and over 70% of Alabama’s land mass).

Rural electric cooperatives are member-owned (ie. customer owned), and return excess profits to the members. As such, members have certain rights to transparency and equity; to be able to attend board meetings and have input into the decisions the board is making on their behalf.

In addition to understanding their rights, members need to be able to see that their co-op is serving them well. It’s easy to say you are satisfied with your service when you have nothing to compare that service to. That’s where the Alabama REC Scorecard comes in.

Our team has evaluated all 22 Alabama RECs and scored them on over 40 different variables across three key areas. These scores allow you to do a side-by-side comparison of your REC with others in the state (or even those in other states), to see how what you have now compares to what you could have.

Of course, it’s not that simple. We spent months reaching out to every Alabama REC, with too many refusing to answer our questions or even return our many calls and emails. Many of these same RECs offer little to no information online for their members, making it even more difficult to properly assess them.

Three key areas evaluated

Democratic governance includes the ability for members to access bylaws, attend board meetings, vote on bylaw amendments, and generally have a say in the way the cooperative is run.

Financial Transparency & Compensation include things like the number of board members, CEO/board compensation, ratio of CEO salary to median household income.

Member programs include things like on-bill financing, energy efficiency financing programs, community solar, and broadband internet.

 

Summary of Alabama REC Scores:

Only 18% of Alabama RECs regularly inform their members of the date and time of upcoming board meetings.

64% of Alabama RECs allow members to attend and address board meetings.

No Alabama RECs ensure that all members have access to (via website, mail, or other means) their incorporation documents, bylaws, meeting minutes, IRS compensation forms, general financial and operational data, and strategic plan summary.

Only half of Alabama RECs have their bylaws published on their website. This lack of access to cooperative bylaws significantly reduces the ability of members to participate in the cooperative’s electoral process, engage in the bylaw amendment process, and hold their co-op accountable for possible corruption or misconduct.

Alabama Rural Electric Cooperative Scorecard author Q&A

Alabama Rural Electric Cooperative Scorecard author Q&A

Individual Alabama Coop Scores

Arab Electric Cooperative (AEC) seems to be making efforts to increase the ability for member-owners to understand and participate in the decision-making process. They are one of only four RECs that provide meeting minutes on their website, and one of only two co-ops that has the right for members to attend board meetings (without prior written approval) written into the bylaws. AEC is the only co-op in Alabama to have term limits for board members. In August 2020, amidst the Coronavirus pandemic, AEC proposed a bylaw amendment to eliminate mail-in voting.
Overall score: 43/122

Arab Electric Cooperative is the only co-op in Alabama to have term limits for board members

Baldwin EMC
Overall score: 24/122

Black Warrior EMC 
Overall score: 30/122

Central Alabama Electric Cooperative held virtual meetings with sign-language interpretation during Covid-19 to ensure accessibility. At least half of current board members were appointed rather than elected.
Overall score: 39/122

Cherokee Electric Cooperative 
Overall score: 27/122

Clarke-Washington EMC
Overall score: 13/122

Coosa Valley Electric Cooperative
Overall score: 42/122

Covington Electric Cooperative has recently began development on a community solar garden (the first Alabama co-op to do so). This development is a direct result of their efforts towards democratic governance. Additionally, CEC is the only Alabama REC that allows members to vote early, by mail, in-person, and online. CEC has demonstrated a commitment to gender equality through bylaw amendments relating to pronouns. CEC is one of only three Alabama RECs to offer regular loan-based on-bill financing program.
Overall score: 59/122

Covington Electric Cooperative serves as a spectacular example of intentionally promoting member-owner engagement. Not only are they the only Alabama co-op to allow voting by all four means possible (in-person, early voting, by mail, and online), their move to allow online and mail-in voting resulted in their largest voter turnout ever.

Cullman Electric Cooperative is one of the clear winners when it comes to promoting electric vehicles. At their 2020 virtual annual meeting they held an EV information session and demonstration of the the EV and charger owned by the co-op. CEC provides information on their website regarding upcoming board meetings, as well as meeting minutes, and instructions on how members can propose bylaw amendments. However, members can only attend or speak at board meetings with prior approval.
Overall score: 55/122

Dixie Electric Cooperative offers heat-pump rebates and an off-bill financing program, and allows their members to vote both in-person and by mail.
Overall score: 37/122

Franklin Electric Cooperative
Overall score: 36/122

Joe Wheeler EMC
Overall score: 50/122

Marshall-Dekalb Electric Cooperative displayed troubling financial discrepancies between their public tax documents, resulting in inability to properly score them on compensation questions.
Overall score: 15/122

North Alabama Electric Cooperative
Overall score: 38/122

Pea River Electric Cooperative is one of only three Alabama RECs to offer regular loan-based on-bill financing program and water-heater rebates.
Overall score: 19/122

Pioneer Electric Cooperative held virtual meetings during COVID to ensure accessibility.
Overall score: 45/122

Sand Mountain Electric Cooperative
Overall score: 30/122

South Alabama Electric Cooperative (SAEC) displayed troubling financial discrepancies on their public tax documents, resulting in inability to properly score them on compensation questions. SAEC is one of only three Alabama RECs to offer regular loan-based on-bill financing program.
Overall score: 19/122

Southern Pine Electric Cooperative has a Member Task Force composed of 48 couples, 12 from each of the co-op’s four service areas. Task Force membership rotates annually giving members a chance to not only learn how their co-op works, and the needs it serves, but give feedback and serve in an advisory capacity.
Overall score: 26/122

Tallapoosa River Electric Cooperative
Overall score: 21/122

Tombigbee Electric Cooperative
Overall score: 46/122

Wiregrass Electric Cooperative (WEC) offers loan programs to provide seed money to generate economic development. WEC is one of only two co-ops that has the right for members to attend board meetings (and to do so without prior written approval) written into the bylaws. WEC further shows a dedication to transparency by providing an extensive FAQ on their website. WEC has demonstrated a commitment to gender equality through bylaw amendments relating to pronouns.
Overall score: 59/122

Wiregrass Electric Cooperative serves as a positive example of what transparency and accessibility should look like. They welcome members to attend meetings, and clearly inform members of upcoming elections and proposed bylaw amendments.

Some low scores may be due to lack of information. These RECs refused or failed to respond to requests for information: Arab Electric Cooperative, Baldwin EMC, Black Warrior EMC, Central Alabama Electric Cooperative. Clarke-Washington EMC, Pea River Electric Cooperative, Sand Mountain Electric Cooperative, South Alabama Electric Cooperative, and Tallapoosa River Electric Cooperative. These RECs did provide some information requested but failed/refused to respond to other requests: Franklin Electric Cooperative, Joe Wheeler EMC, Marshall-Dekalb Electric Cooperative, and Southern Pine Electric Cooperative. Scores of zero were given when information was not available/provided to us. These failures to provide information likely resulted in lower scores than would have been earned had they provided accurate information.

VIEW THE FULL SCORECARD

There is room for improvement at all of the Alabama RECs, and we hope that this Scorecard serves to provide information to all about what improvements are possible and needed.

 

Have questions about the REC Scorecard? Drop them in the comments below.

Alabama PSC Should Release Analysis on Alabama Power’s Excessive Profit Formula

Today, Energy Alabama sent a letter to the Alabama Public Service Commission (PSC) asking it to commit fully to transparency and fairness by allowing regular Alabamians to review and submit questions about an overdue report examining Alabama Power’s Rate Stabilization and Equalization (RSE), a key factor in how the utility’s excessive profits are determined.

Read the letter here

Alabama Power’s RSE utilizes a formula that over-rewards the company at the expense of its customers. Hard-working Alabama Power customers deserve to know why they pay some of the highest electric bills in the country. The Alabama PSC owes an explanation to the people of Alabama and should find a way to virtually open this meeting to the general public.

There are major questions about the workings and results of the RSE formula which should be answered by a report required by a 2013 PSC order authorizing the rate. Publicly available data shows that Alabama customers are overburdened by the PSC’s formula, which hides the usual measure of return on equity (ROE) used by other utility regulators.

However, the “hidden” ROE can still be calculated from other sources. Such a comparison from 2014 through 2018 shows that Alabama Power customers paid more than $1 billion in excess profits than they would have if the PSC had instead awarded Alabama Power the national average ROE.

COVID-19, and the economic hardships it created, have further exacerbated the excess profit Alabama Power has pocketed. Instead, the PSC continues to over-reward Alabama Power at the expense of its customers.

Allowing a monopoly utility to retain profits that are far above those necessary to provide mandated services is not equitable nor economical for customers. The long overdue RSE report should provide the important information necessary for all stakeholders to discuss the unique formula and the profits it supports­­.

“If this Commission cares about creating jobs, it should put Alabama Power’s excessive profits back into the hands of regular folks and small businesses,” said Daniel Tait, Energy Alabama’s Chief Operating Officer. “The time for monopoly handouts is over.”

By any objective standard, the case is clear. The Alabama PSC must support transparency and #ReleaseTheRSE.

Groups Ask PSC to Reconsider Alabama Power’s Unprecedented Gas Expansion

Gasp and Energy Alabama have formally asked the Alabama Public Service Commission to reconsider its June decision to approve the single largest capacity increase ever proposed by Alabama Power, including including almost 1,900 MW of gas generation. We requested a rehearing to consider updated testimony in light of economic forecasts showing lessened electric demand due to the coronavirus pandemic (COVID-19).

Last year, Alabama Power filed a “Petition for a Certificate of Convenience and Necessity” with the Alabama Public Service Commission. That proposal initially sought to add nearly 2.4 gigawatts of new generating capacity — which would cost customers over $1.1 billion. Energy Alabama and Gasp, represented by the Southern Environmental Law Center, intervened in the docket to question Alabama Power’s lack of evidentiary support to build and buy such a significant amount of new gas resources.

In March, just before COVID-19 brought the world as we know it to a halt, the Alabama Public Service Commission held a series of hearings on the petition. Witnesses for Gasp and Energy Alabama exposed exposed significant flaws in Alabama Power’s planning and justification processes. After those hearings concluded, we made several key points in our proposed order filed with the Commission:

  • Alabama Power failed to produce the evidence necessary to support its request to increase electric generation capacity by almost 20%. The utility had previously asserted it wouldn’t need new generation sources until 2035.
  • Without a showing of need, Alabama Power’s request amounts to an effort to build rate base and enrich shareholders at the expense of its customers, who will pay for expensive, unnecessary generation for decades.
  • Alabama Power’s own analysis showed that the proposed solar plus battery storage projects were the cheapest options for customers.

The pandemic and subsequent economic downtown have cast even more doubt on Alabama Power’s supposed need for new capacity. In early June, we filed additional information regarding anticipated economic effects of COVID-19, arguing that the economic downturn precipitated by the pandemic called into question the magnitude and timing of Alabama Power’s claims about needing additional power sources. Alabama Power relied on outdated projections from more than two years ago, well before the economic devastation wrought by COVID-19. We argue those projections can no longer serve as the basis for a making a $1.1+ billion investment with customer dollars.

Despite all of that, the PSC in June unanimously voted to approve everything in Alabama Power’s proposal, including almost 1,900 MW of gas generation, except Alabama Power’s proposed solar plus battery storage projects. The PSC said they were not well-suited to meet Alabama Power’s reliability needs, despite the overwhelming evidence that supported their approval. However, the Commission refused to ask for supplemental information from Alabama Power as to whether its petition was still warranted.

Alabama customers already pay some of the highest electric bills nationwide. (A recent report found that people in Birmingham have the highest energy burden in the nation.) COVID-19 has only worsened the plight of customers struggling to pay monthly bills. If they want to move forward with these monumental investments, Alabama Power should not be allowed to put the entire financial burden on customers. Utility shareholders should bear the risk that the projects may become stranded assets before the end of their useful lives.

We also hope the Commission will reconsider its denial of the solar-plus-storage projects, which were the most economic options according to Alabama Power’s own analysis. That was just the latest in a long line of anti-solar decisions from the Commission. In September, the Alabama Public Service Commission dismissed our challenge against Alabama Power’s discriminatory solar charge, instead approving an increase in the charge.

By denying Alabama Power’s proposed solar-plus-battery storage projects in this docket and then approving an increase to Alabama Power’s unjust solar fee on rooftop solar customers in another, the PSC continues to deny Alabamians the benefits of clean, renewable energy like solar. Alabama has less solar capacity than other states in the sunny South, and far fewer jobs as a result of the PSC’s decisions.

Alabama Public Service Commission Backs Alabama Power’s Tax on the Sun

2020 has been a bad year, especially if you’re an Alabama Power customer.

The Alabama Public Service Commission (PSC), never content with how many favors it can give Alabama Power, added insult to injury today when it upheld Alabama Power’s sun tax. As many of you know, Alabama Power taxes small scale solar at one of the highest rates in the country; $5/kilowatt/month, or about 50% of the money you could expect to earn from your system. It is currently unclear if the Commission’s vote today actually INCREASED the sun tax.

In other words, the supposed supporters of small government at the PSC chose to institute an approximate 50% tax on solar for homes and small businesses in order to protect the monopoly of one the largest and most profitable companies in the state.

How the PSC Fails Alabamians

This is not the first questionable decision the PSC has made this year. Here are a few lowlights:

  1. The Commission failed to take any action to protect customers from disconnections or late fees amid COVID-19. Advocates like Energy Alabama had to force Alabama Power to protect consumers, but the PSC claimed its closed doors talks with utility executives were good enough and no action was needed.
    • By the way, Alabama Power is restarting disconnections soon, despite its parent company earning almost $5 billion in net income last year alone.
  2. The Commission ruled in favor of Alabama Power, allowing it build expensive and unneeded gas, and punted on solar and energy storage projects despite them being the most cost effective.
  3. The Commission allowed Alabama Power to overcharge customers for fuel by more than $100 million until a group of advocates, including Energy Alabama, called them out on it. Under fire, the Commission finally did the right thing and refunded customers most of the money.
  4. The Commission, in an attempt to legislate from the bench, is actively blocking the recording of hearings and the use of electronic devices.
  5. And then today, the Commission backed Alabama Power’s tax on the sun. Alabamians of all political stripes want more low-cost renewable energy but the PSC has decided it knows better than the people.

Again, this is just 2020.

The Cost of Being a Puppet

The Alabama PSC has proven itself to be not much more than a puppet for Alabama Power. For instance, the solar tax complaint was first filed back in April 2018, yet it took the PSC more than two years to decide the case. However, Alabama Power was able to file for one of its largest expansions in history and get it approved, all before the solar tax case was decided. If Alabama Power wants it done, it gets done. If the people want it done, nothing happens.

There are real world consequences to all of this deference to Alabama Power. First off, real economic harm is being done to the people of Alabama and many of our small businesses. Our utility bills are some of the highest in the nation, the proportion of income Alabamians spend on electricity is one of the highest in the nation, and we have the worst energy efficiency in the country. But rather than make any of these problems better, the Commission continues to green light expensive and unneeded construction, allow high taxes on alternatives, and ignore any efficiency. Alabama Power does not want any of these things because it would rather you remain forcibly and 100% dependent on them.

Bluntly, the decisions of the PSC are contributing to poverty in Alabama, rather than alleviating it. Alabama has a history mired in poverty and we need our energy policy to help us break that cycle. Favoring monopolies and Wall St. over low-cost distributed energy perpetuates the struggle of hundreds of thousands of hard-working Alabamians.

Photo credit: Pat Byington

And secondly, Alabama is losing out on tens of thousands of good paying jobs in advanced energy stemming directly from PSC decisions. There are tons of folks who could be employed in the energy efficiency sector, making much needed upgrades to our built environment and infrastructure. Renewable energy, such as solar and wind, are some of the fastest growing sectors of the economy in most states, but not Alabama.

Twinkle Cavanaugh, the PSC President, has often touted jobs in statements to Alabama Power-supported outlets like Yellowhammer News, in campaign materials, and even from the dias during PSC meetings. We’d encourage her to actually take her own words seriously and put Alabamians to work.

Legal Petition Demands Tennessee Valley Authority Halt Electricity Shutoffs, Fund Debt Relief

For Immediate Release, August 25, 2020

Contact:

Howard Crystal, Center for Biological Diversity, (202) 809-6926, hcrystal@biologicaldiversity.org
Brianna Knisley, Appalachian Voices, (937) 725-0645, brianna@appvoices.org
Daniel Tait, Energy Alabama, (256) 812-1431, dtait@alcse.org
Isabella Killius, Sunrise Tennessee, (615) 762-6665, sunrisetennessee@gmail.com

WASHINGTON— Dozens of climate-justice organizations petitioned the Tennessee Valley Authority today to immediately impose a moratorium on electricity shutoffs in the region and fund debt relief for its customers.

The petition also calls on the massive utility company to accelerate the Valley’s clean energy transition to address compounding COVID-19 unemployment, climate and racial injustice crises.

“TVA has the responsibility and the money to prevent people from needless suffering and crushing debt,” said Howard Crystal, legal director for the Center for Biological Diversity’s energy justice program. “The company can seize this opportunity to genuinely serve the public interest and become a model for other utility companies. TVA must acknowledge the environmental damage from its dirty energy choices and chart a new course toward a clean, democratic energy future.”

Congress has yet to impose a federal moratorium on utility shutoffs, leaving thousands of families in TVA’s service territory at risk of losing electricity during a summer of climate-induced, record heatwaves.

“In the face of a public health, environmental and economic crisis not seen since the Great Depression, we are calling on TVA to return to its original mission to improve quality of life here in the Tennessee Valley,” said Brianna Knisley, Tennessee campaign coordinator with Appalachian Voices. “TVA can and should protect vulnerable communities from power shut offs, eliminate unnecessary and harmful coal ash production, and bring new, public jobs to the Valley. At the very least, our public utility should be reaching out to communities to better understand their issues and needs during these critical times.”

The COVID-19 pandemic and related unemployment crisis have brought severe economic strain to the Southeast, a region where low-income communities, Black communities and other communities of color are already disproportionately burdened by pollution, high energy bills and utility shutoffs.

“If TVA wants to get serious about reducing the burden of COVID-19 on residents in the Valley, it is time for TVA to get serious about strong energy efficiency and renewable energy programs, specifically for low-income customers,” said Daniel Tait, chief operating officer of Energy Alabama.

The petition urges TVA to reallocate its vast resources to help customers pay their bills and fund equitable economic recovery through clean energy and efficiency programs. This would require a series of public hearings, which the petition says should begin as soon as possible.

“In the midst of the pandemic, when people are unemployed and without basic needs like power, food, water, and broadband services, TVA has a responsibility to support its customers by instituting a moratorium on utility shut-offs, thus upholding its original mission to serve the people of the Tennessee Valley,” said Isabella Killius with Sunrise Tennessee. “This petition encapsulates the need for institutional change within the TVA such that customers are provided adequate relief and, in addition, necessary actions are taken to mitigate the ongoing climate crisis.”

TVA has the funding and the mandate to provide debt relief to residential customers, rapidly retire its fossil fuel infrastructure, and invest in clean, distributed energy and energy efficiency efforts. These efforts will create local jobs vital to the region’s economic recovery.

The petition is named in honor of S. David Freeman, a former TVA board chair and a tireless advocate for renewable energy. The self-proclaimed “green cowboy,” who died in May, had sought for a long time to free people from polluting, centralized TVA power.

TVA is a federally owned corporation and the nation’s largest public power provider. It generates electricity for more than 9 million customers in Tennessee, northern Alabama, northeastern Mississippi, southwestern Kentucky, and portions of northern Georgia, western North Carolina and southwestern Virginia.

 

The Center for Biological Diversity is a national, nonprofit conservation organization with more than 1.7 million members and online activists dedicated to the protection of endangered species and wild places.

Appalachian Voices works at the nexus of the ongoing shift from fossil fuels to clean, 21st-century energy sources — we fight mountaintop removal coal mining, fracked-gas pipelines and other harms to the people and places of Appalachia, and we advance energy efficiency, solar and wind power, and other economic solutions that create community wealth and sustain Appalachia’s mountains, forests and waters.

Energy Alabama is a membership-based non-profit organization accelerating Alabama’s transition to sustainable energy. We accomplish our mission by educating at all levels, informing smart energy policy, building the next generation workforce, and providing technical assistance to deploy more sustainable energy. We believe in sustainable energy for all.

Sunrise Tennessee is a statewide coalition of Sunrise hubs that represents young organizers from Nashville, Knoxville, and Franklin, Tennessee. We are fighting for a Green New Deal on both state and federal levels, ensuring a just transition away from the fossil fuel economy and the creation of millions of good-paying jobs.

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