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Answers from
REC urged
To the Editor:
It’s time for members of Rappahannock Electric Cooperative (REC) to press the board of directors and management for real answers about the pending 7.6 percent increase in electric rates.
In recent issues of “Rural Living,” REC has presented pages and pages of color pictures about safety training, flowers around substations, yard sales, quail habitats, squirrels causing power outages and blueberries. Not one article concerning a single cost-cutting initiative implemented by REC to help its members survive in today’s economy.
REC’s June announcement of the rate increase claimed that details were not available until after the State Corporation Commission (SCC) reviewed the request. Not true! The rate increase had been planned for more than a year.
In fact, REC’s president and both vice presidents met with the SCC staff Oct. 12, 1991, to discuss the rate case. The 1992 budget, including the 7.6 percent rate increase, was adopted by the board Nov. 20, 1991. Furthermore, the board approved a $17,000 cost-ofservice study pertaining to the rate case on Dec. 18,1991.
REC’s president states that the cooperative’s last rate increase was in 1984. But he fails to point out that REC’s rates are near the highest in the state even before this rate increase was filed.
Even though revenues have increased annually, uncontrolled spending has put REC in such a poor financial position that no “patronage” refunds have been made to members in the past two years. According to REC’s chairman and president in the 1992 annual report, “We added 2,300 new services, a substantial number though less than in previous years.”
Two paragraphs later they say, “The operating margins in 1990 were $4,630,912. In 1991, the figure was $1,165,030. This variance is primary Uy a result of our growth.” Where’s the logic?
Here are a few documented expenditures that do not appear in REC’s annual report but did contribute to the need for higher electric rates: A new $1.5 million building in Fredericksburg, $1.5 million spent on a computerized mapping system, $286,000 allocated for the directors’ retirement (December 1990), the president’s salary increased to $91,000, a 20 percent increase in its attorney’s monthly retainer and 14 percent in his hourly rate, $60,000 to purchase land from a board member, $37,000 for employee exercise equipment, $40,000 for a strategic planning study, $6,000 toward annual
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