It's a matter of governance: the angry members may be right.

• Author: Goodman, Jack D.
• Position: Managing unrest in a rural electric cooperative

I hope the message that this panel brings to you is one that you will take seriously and you will react to in a positive manner. What I am going to relate is based on a true situation and while many feel it was an isolated incident, I, nevertheless, assure you it will occur again and again. I do very strongly feel that angry members will strike when directors least expect it and will continue to take matters into their own hands if the directors fail to respond to the needs of the members.

In this situation, we have an electric cooperative of 16,000 members serving a low-growth, economically depressed area. About 25% of the customers are seasonal, 65% residential and 10% small commercial. The system is a member of a G & T and, although wholesale rates are high, the retail rates are in the mid-range; with investor-owned and electric cooperative rates in the area being both higher and lower than the cooperative.

I was told that the board of directors was one of the best educated and trained in the country. The record is quite clear that the board supported, through their frequent participation, in statewide and national meetings. They attended numerous seminars and conferences sponsored by the statewide, NRECA and others.

The cooperative belongs to a strong statewide association and a G & T where only directors of the members' systems serve on the boards of these organizations.

Management was seasoned with years of utility experience and some 16 years as manager of this distribution cooperative.

The directors and manager took an active leadership role in state and national affairs and were particularly strong with their statewide in the political arena. Some of you were acquainted with the directors and manager and, if asked to grade their performance, would have placed them well above average.

In December of 1993, the "storm of the century" hit the cooperative's service area. The damage to the system was not great; about 40 poles were replaced and several thousand wire breaks were repaired. The heavy wooded rough terrain buried in three to four feet of wet snow in near blizzard conditions made restoration of service a time-consuming process. A vast majority of the customers had power restored within 72 hours, but for some, outages lasted for ten days. It was these customers who predominately figured in a membership revolt--calling for changes in management and the resignation of the nine directors.

The organization formed by the members...