Guest Opinion: Islanders Question OPALCO and Rock Island Ethics Re: Lobbying for Board Candidates

— by Chris Graecen —

“Is it acceptable for Rock Island, a wholly owned subsidiary of OPALCO, to use its staff time, email address lists and letterhead to lobby for specific candidates for the OPALCO board?”

This is the question islanders and Orcas Power and Light Cooperative (OPALCO) members are raising in response to a 15 April email sent by Rock Island to existing and large prospective customers, and then retracted three days later.

The email, sent by Rock Island GVP Gerry Lawlor on letterhead reading, “Rock Island — An OPALCO company”, praised former board member Glenna Hall and included a statement by Hall, “I strongly urge members to elect” [three candidates running for OPALCO board named] followed by a lengthy description of her view of the merits of each candidate.

If Rock Island were an independent company, expressing opinions like this would be fine. But it’s not independent. Rock Islands’ General Manager Foster Hildreth is also the General Manager of OPALCO. The General Manager is appointed by, and reports to, the OPALCO board. OPALCO is the sole owner of Rock Island which it purchased using cooperative member shareholder equity. Moreover, Rock Island is the recipient of a $7.5 million low-interest loan from OPALCO and Rock Island has exclusive usage of OPALCO’s fiber optic network for retail sale of broadband internet. These expenditures, together with $800,000 for the wireless spectrum that will be used by Rock Island to deliver wireless internet services, have contributed to increases in residential (electrical) customer facility charges from $28.60 per month in 2014 to $40.54 per month in 2016 with further increases expected in future years. Recently, OPALCO assessed an additional two-year $3 per month surcharge on all electricity members as a “corrective action” after the cooperative failed to meet loan covenants required by its federal lender. One of the challenges the new board will face is addressing OPALCO’s financial situation which also includes the need for expensive submarine cable replacements.

Sandy Bishop, a member of the Islands Energy Coalition’s and an organizer of the April 7, independent OPALCO forum candidate debate, read the Rock Island letter and shortly thereafter wrote to Hildreth requesting distribution of an opinion piece distributed using the same mailing list. Hildreth denied her request, stating, “As a private, for-profit company, and member of OPALCO, Rock Island (and Gerry in his role) are within their rights to act in the best interests of their business.”

Lauren Stephens, who was chosen through an OPALCO-initiated process to run for a District 3 position, wrote to Hildreth, “I’m writing to you as the leaders of OPALCO and Rock Island to strenuously object to the inappropriate use of Rock Island employee time and mailing lists for promotion of candidates in the OPALCO election. I believe it is unethical for you to allow this partisan activity on official corporate letterhead. I have copied Mandi Johnson from the Sounder on this message because I believe voters in the county should be made aware of the unscrupulous way OPALCO is managing this election.” Lauren also cited a separate email circulated on 13 April by Rock Island that praised certain incumbent board candidates up for re-election.

In response to Stephens’ written objections to the Rock Island email, Hildreth indicated that at the April 21 board meeting the OPALCO Board will take action to implement a policy covering political activity by both OPALCO and Rock Island. On April 18th Gerry Lawlor distributed a retraction of his prior email saying, “Although my action was not barred by any policy, I realize now I should not have sent it in my official capacity.” Hildreth followed up with a statement regarding the Rock Island email: “OPALCO leadership takes a neutral position in the Co-op election. It’s up to the membership to decide who best represents their interests. We regret this misstep – it’s unacceptable.”

In a “2016 Candidate Questions and Answers” page on the OPALCO website, Stephens wrote, “I believe that the board must limit future [electricity rate] increases and honor previous plans to end specific added fees such as the $3 per month for 24 month plan implemented in 2015 that was part of financing Rock Island.”

OPALCO and Rock Island deserve recognition for doing the right thing by printing a retraction and affirming their commitment to election neutrality — though it may yet be difficult to “uncurdle the milk” that was soured in this election. Rock Island customers constitute about 15% of OPALCO members. Voting by electronic ballot began on April 9, open to all OPALCO members. Votes will be tallied and OPALCO directors selected at the general meeting on 30 April. Typically less than 25% of the membership vote in the election, so every vote makes an important difference.

Chris Greacen, Ph.D., works as a consultant to the World Bank on regulatory aspects of rural electrification