Kick me: a personal perspective.

• Author: McDuffie, Bob
• Position: Rural electric utilities in danger of being taken over - Includes related article

An increasing number of rural electric systems are being confronted with potential buyout/sellout threats. Our author presents a list of conditions which could cause unrest among a system's membership and examines the effect they may have on the potential vote of the membership to sell the system.

There have been numerous cartoon and sight gags containing in one manner or another a sign pinned to the posterior of the fall guy saying, "KICK ME." There are some rural electric cooperatives that bring this picture to mind, only their sign says, "BUY ME OUT."

Conventional wisdom says that the five major reasons leading to a potential takeover by an IOU are:

1. High Rates. 2. High Rates. 3. High Rates. 4. High Rates. 5. High Rates.

Not necessarily so. While high rates may be the culprit most frequently cited, other factors are often the real reasons.

Here is a list of conditions or factors that are most likely, in my mind, to cause unrest in the membership, and result in a power company offer:

* A noncompetitive pay scale.

* Limited training opportunities for employees.

* Substandard distribution system maintenance.

* Misunderstood fee (per diem) and travel policy for directors.

* Quality of vehicles and equipment.

* Method of taking trouble calls and dispatching.

* Little community involvement.

* Nonexistent patronage capital policy.

* Equity level.

* Unequal treatment of members.

* Poor economic conditions in service area.

* Strong neighboring IOU.

An examination of each of these areas brings into focus the effect each can have on a potential vote of the membership to sell the system.

Noncompetitive pay scale. Once we have acknowledged that the employee is the first line of contact with the member, let us ask ourselves what kind of first-line contact we would like to have.

We would all agree that we want employees to put the best face on the cooperative possible. If employees are disgruntled over pay and benefit policies of the employer, what kind of impression are they going to leave on the front line? The answer is obvious.

This problem can be solved by doing three things. (1) Hire the best employees possible. (2) Pay these employees above average (at least on a par with the pay of IOU employees). (3) Ask them to do a little more than would normally be expected of them.

The third item is important. If you hire better-than-average employees, they can do more than average; therefore fewer employees are needed. It is possible that the overall payroll will be smaller with highly motivated employees who are paid above average.

Limited training. We all want knowledgeable employees. They have to have a good knowledge of the system, their duties and how to deal with people. All people benefit from expanded educational opportunity--be it general or specific to a profession. All skills are advanced by exposure to new ideas and methods. To buy into the premise that cutting training and educational travel saves money is extremely shortsighted. As with the compensation question, money will be saved in the short run, but over the long haul expenses will rise.

Substandard distribution system maintenance. Many, if not most, high bill complaints are really complaints about something else. In most cases, that "something else" is quality of...