Cape Light Compact?s Un-Cooperative Approach

  • AS THE BARNSTABLE TOWN COUNCIL GETS READY TO VOTE ON THURSDAY NIGHT -

Cape Light Compact’s Un-Cooperative Approach Disenfranchises Many,
...and Poses Risks to All

By Chris Powicki

A recent article in the Barnstable Patriot suggested I was the grit in the Cape Light Compact’s oyster for bemoaning its lack of transparency, questioning its favorable treatment of municipal consumers, challenging its attempts to form an electric cooperative that could have adverse impacts on taxpayer and consumer interests, and complaining when Barnstable County and Cape Light Compact officials sought retribution via petty political attacks.

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Barnstable County and Compact officials sought retribution via petty political attacks
With the knowledge that nature works in mysterious ways, I offer the following as possible pearls of wisdom in advance of July 19, when the Barnstable Town Council will convene to once again consider whether to join the Cape & Vineyard Electric Cooperative. Any action taken by the Town Council will have implications for communities, residents, and businesses throughout the region, as enumerated below.

The idea behind and the goals for the proposed cooperative may well be worthy of support: A cooperative could overcome some of the Compact’s institutional weaknesses because it would be capable of investing in, financing, owning, and operating renewable or other energy facilities and of buying energy commodities in wholesale markets and on a long-term basis. In pursuing these goals, staff, attorneys, and representatives of the town of Barnstable, the county, and the Compact have been doing some pioneering work. Unfortunately, the cooperative development process to date has been conducted without public input or scrutiny, and the proposed structure’s implications are poorly understood.

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Decision-makers and consumers in the 20 other Cape and Vineyard towns have already been disenfranchised under the approach taken by County and Compact officials
Decision-makers and consumers in the 20 other Cape and Vineyard towns have already been disenfranchised under the approach taken by County and Compact officials in advancing the cooperative: Its articles of incorporation and bylaws were developed behind closed doors and distributed to Compact Governing Board members representing each community just a couple days in advance of the board’s meeting on June 13. Board members were told by the Compact’s attorneys that the documents contained confidential information to be reviewed and shared with town officials only if requested, and that they would not be allowed to revise the documents. Despite the compressed timeframe, the questionable legal advice, and some significant misgivings raised at the meeting, board members voted to adopt the documents as written and to support the Compact’s membership in the cooperative.

That likely occurred because those involved in developing the proposed cooperative repeatedly averred that the sole near-term objective is to secure tax rulings and pledged that there will be ample opportunity for institutional adjustment going forward. The former might be true, but the cooperative’s bylaws set a very high bar for future change. By allowing the Compact to join the cooperative last month, Governing Board members essentially forfeited the ability of elected and appointed officials, residents, and businesses in 20 communities to determine how the cooperative makes decisions and who makes those decisions.

The following analogy illustrates what’s on the line for the town of Barnstable on July 19: The town is being asked to sign a prenuptial agreement (the bylaws) as a condition of engagement. During the engagement period, the town would represent the third wheel on an executive committee that currently includes Compact Administrator & Assistant County Administrator Maggie Downey and her boss, County Administrator Mark Zielinski. If consummated, the marriage would become polygamous, potentially involving all other Cape and Vineyard towns and many other municipal consumers. Despite having the biggest dowry, Barnstable would remain subordinate, and its decision-making authority would be further diluted as the marriage expands. If the town signs on to this prenuptial agreement in its current state, there is little assurance that it would be able to adjust the terms to its liking going forward, as bylaw changes require support from 80% of the cooperative’s overall membership. This means that an affirmative vote by the Town Council could have long-term and significant yet potentially irreversible and possibly adverse consequences.

At minimum, the following issues should be addressed before the town moves forward:
Would the cooperative “put some upward pressure on the prices” that residential and business consumers receive through the Compact, as indicated on p. 87 of the Compact’s own Phase I cooperative study?

  1. To what extent would the cooperative’s membership structure and bylaws delegate decision-making authority to others?
  2. What sorts of resource commitments and risk exposure would the cooperative entail?
  3. Would the officials who imposed the highest electric rates in the continental United States on Cape and Vineyard consumers in 2006 and who continue to leave them in the dark about power supply issues and options be charged with making inherently riskier and more significant decisions? 
  4. Would the cooperative result in the town’s resources and credit rating being put on the line to help other towns realize benefits? 
  5. What sorts of modifications to the membership structure, articles of incorporation, and bylaws might better protect the interests of the town, taxpayers, and consumers? 
  6. Is forming a regional cooperative with membership limited to municipalities the best approach for addressing energy-related challenges and opportunities facing the town, its residents and businesses, and the region?

Decision-makers and consumers in other communities might be asking analogous questions if they had been given the opportunity. It is in everyone’s interest for the Barnstable Town Council to delay a vote on joining the Cape & Vineyard Electric Cooperative until after

  1. the proposed structure is presented and evaluated in public forums designed to solicit input from taxpayer, consumer, and business groups;
  2. the potential long-term costs, benefits, and risks of the proposed structure and other possible options are better understood; and
  3. the course changes necessary to adequately protect the interests of all towns, residents, and businesses are implemented.

  • The accompanying documents – bylaws and articles of incorporation - are the ones that  reference as confidential in my piece. I believe they are public domain now. Click here to see them.  You may email the County Commissioners with your opinion here, and the Cape Light Compact officials here.

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