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Is PEC heading down the wrong road again?

by Kathy Scanlon and Patrick Cox, Ph.D.

Recent decisions by the PEC Board of Directors leading to the departure of CEO John Hewa have set off alarms and serious concerns about the future of our co-op.

We were the first two PEC board members who were fairly elected in a democratic election of all PEC members in 2008. We inherited a discredited organization that was ethically bankrupt, fiscally irresponsible, and one that totally ignored its members. PEC members were unhappy, creditors were concerned, employees were dispirited, and few people trusted the PEC management and leadership.

All that changed through hard work and dedication to reform the PEC and make it a responsible and successful organization. Those changes did not come easy – it took many years to change policies, systems, and build a new management team.  When we hired John Hewa in 2013 we knew that we had found the right person to fulfil the co-op’s vision – to make PEC a national leader in the utility industry and meet the demands of our rapidly growing electric cooperative.

As a not-for-profit utility, PEC is about serving our members in the most efficient, cost effective and innovative manner possible. Since 2008, we built PEC’s industry-leading reliability, our member services and our commitment to fiscal responsibility through an open and transparent business model. Our PEC employees are number one when it comes to serving our members and our communities. This service is demonstrated through the excellent ratings and approval that PEC has achieved.

Our members have also enjoyed the rewards of improved fiscal oversight – rate reductions that provide real savings to every member’s account. We provided extensive cost reductions and installed a state-of-the-art computer and data processing system. Honoring our fiduciary responsibilities, PEC increased its equity, received independent clean financial audits, achieved a AA- bond rating and distributed millions of dollars in capital credits to our members since 2008.

We also recognized our duties as stewards of the beautiful Texas Hill Country. We initiated energy efficiency and renewable energy resources in a fiscally responsible manner. We provided new technologies and rate designs that reflect our members’ needs.

In governance, we established policies to cover conflicts of interest, a code of ethics, continuing education, an open meetings and open records policy, and a “Members’ Bill of Rights” to guarantee open, fair elections. We created one of the most transparent utility cooperatives in the nation.

With all of these achievements, why has PEC CEO John Hewa “resigned” from his position in 2017?

The board of directors’ role is to provide guidance and oversight of the CEO to fulfill the strategic plan and oversee management of the entire coop. In today’s complex world, decisions require extensive research and evaluation by managers who supply this information to the board. John Hewa did this and was an exceptional CEO. However, with all these accomplishments, Hewa did not depart because he could not do his job. It is all too apparent that this “resignation” was due to causes unrelated to his performance.

The current PEC Board of Directors is not being straightforward with the members. They need to be honest about Hewa’s departure. Hewa publicly stated that certain board members retaliated against him and other employees for questioning statements and actions by directors. And it also raises more concerns – since there are no issues of misconduct or professional capability, why is he leaving? How much is he being compensated to leave, what is the plan for finding a new CEO, how do you expect to find a top notch CEO under these circumstances, and how are we going to earn the respect and trust of members and employees again?

Contrary to two separate votes by the membership to maintain the at-large voting system for directors, the current PEC board changed the election process. Instead of members voting for every director on a rotating basis, we now vote every third year for a director in a smaller region of the PEC service area. Now, it is virtually impossible to replace any board member for misguided actions that threaten the overall stability and continued success of PEC. PEC Directors Kathy Scanlon and Cristi Clement unsuccessfully fought this outlandish move. The PEC Board of Directors is not a political office – and directors should leave their partisanship at home.

Our call is for this board to provide complete disclosure to members at the upcoming June 17 annual meeting of the true reason for the departure of one of the most outstanding, accomplished CEO’s in the nation. Failure to do so is inexcusable.

Truly responsible board members would look within themselves and confess their inability to exercise proper judgment.  Resignation of the five current board members involved in this unfortunate departure of Hewa would be the most honorable and ethical decision to protect the PEC and our future.

Kathy Scanlon is an Austin resident and former PEC Board President from 2012-13. Patrick Cox, Ph.D., is a Wimberley resident and Former PEC Board President from 2013-15

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