Dennis Root

MEC Update

February 2023 MEC Update

Today, I will provide you with an update on my ongoing endeavors to obtain records from the Mountain Electric Cooperative Board of Directors. So far, the MEC Board of Directors continues to stonewall my efforts to obtain records.

As you know, I have been trying to obtain records from the MEC related to infrastructure and financial concerns, as well as membership information I need to ensure members are informed, which will enable me to run for the MEC District One Director’s seat.

If you have been following my podcast, you know this all started in August of 2022. In the more than six months that have passed, the MEC Board of Directors has refused to provide the requested records. The air of secrecy and lack of transparency surrounding the Board should concern all of the members of the Mountain Electric Cooperative.

I have tried to get help from other entities and state leadership, but to be honest, I have received very little help, if any. As I always do, I am going to share with you everything I have done and the experiences I have had.

State Representative Scotty Campbell

Let me start with the information I received from State Representative Scotty Campbell. As stated in my last episode, on December 06, 2022, I spoke with Representative Campbell. He told me his office would try getting me the requested membership list and see if that changes anything. He also told me his office would reach out to other state regulatory entities.

On January 6th, 2023, I received an email from Rep.Campbell. According to his email, Rep. Campbell told his assistant I requested the members list in accordance with TN law. Rep. Campbell also wrote that I have a desire to make a request to change the bylaws, and they are refusing to provide me with the list of members. He asked his assistant to contact the TN Public Utility Commission, TN Regulatory Authority, TN Valley Authority, and the TN Municipal Electric Cooperative Association and ask them if they could help me get what I needed.

Rep. Campbell told his assistant to have the authorities contact me directly and to let him know the outcome. Now, I never received any information directly from any of the noted entities, but Rep. Campbell’s email included the response his office received from the TN Valley Authority.

Ms. Moore with the TVA wrote TVA’s primary oversight in relation to their local power companies (LPCs) is to regulate their rates and services as distributors of TVA power while maintaining the key principle of local control and governance. She also wrote their team did reach out to the MEC to make them aware of my request, and they asked that the MEC consider the request in accordance with the law. Ms. Moore also indicated their team let the MEC know of Rep. Campbell’s interest in the issue.  Lastly, Ms. Moore wrote the Cooperative is aware of my request and has turned it over to their attorney and Board of Directors for review. Ok, what did we learn from this? The TVA’s oversight appears limited to regulating the rates and services of the MEC. 

On January 09, 2023, I responded to Rep. Campbell’s email. I asked Rep. Campbell if he planned to communicate directly with the Mountain Electric Cooperative or the Board of Directors regarding my request. I explained I had not received any communications from either the Board of Directors or their retained Counsel, George Wright, since submitting my request for the membership list. I also wrote the TVA response indicated the Board and their attorney should be responding to the request, yet they are not.

I let Rep. Campbell know the MEC General Manager and the Director of Member Services had refused to respond to my December 5th or 15th emails. I also wrote that sources had told me the MEC Board of Directors had instructed MEC personnel not to communicate with me. I further wrote the information appeared to be true since neither the General Manager nor the Director of Member Services would respond to my emails.

At the end of my email, I asked if Rep. Campbell knows whom I should speak with regarding moving forward with court actions against the MEC Board of Directors for their dedicated efforts to prevent members from gaining information Tennessee law indicates we are entitled to receive. Rep. Campbell never responded to this email.

On February 09, 2023, I sent Representative Campbell an email outlining my concerns. I felt this was important since I covered these concerns during a phone conversation, and I had no documentation verifying I had provided these concerns to Rep. Campbell. I recognize my February 9th email was long, but I felt it was important to immortalize my concerns in writing, so no one could accuse me of not clearly making these issues known to Rep. Campbell. 

You can read the email for yourself since I have included it as a .pdf on this page, but the five concerns I wrote read as follows:

  1. Due to poor financial decisions and possible financial instability, infrastructure issues cannot be addressed, endangering cooperative members and their families.
  2. An independent consultant told the Board of Directors that if they did not raise rates by a minimum of 2% per year for the next three years, the cooperative could face bankruptcy. Yet, the Board of Directors refuses to provide financial records to disprove or prove the information being circulated, despite the request being made in compliance with Tennessee law.
  3. Cooperative monies were found in a separate account, providing no benefit to the cooperative. The amounts allegedly found in the separate account range from one million to over three million dollars.
  4. Failure to provide membership information, despite the request being made in compliance with Tennessee law.
  5. There is a complete lack of transparency regarding the actions and decisions of the MEC Board of Directors. Members are not permitted to attend the monthly meetings, and Board members state they are not allowed to discuss anything that takes place in those meetings. Cooperative members must seek permission to address the Board directly about a concern. If they are permitted to speak with the Board, they must leave before the Board discusses the issue the member presented.

As of the recording of this episode, I have not heard back from Representative Campbell or anyone in his office. Think about it. No response from our State Representative in more than two months.

Tennessee Valley Authority (TVA)

In addition to responding to Rep. Campbell, I sent an email directly to Ms. Moore asking for clarification on a couple of points. I asked if “regulate rates” means the TVA controls or sets the rates of the Cooperative or does it mean the cooperative must seek the TVA’s approval for any proposed rate increases or decreases. I also asked if when she wrote “maintain the key principle of local control and governance,” is she referring to the cited democratic control of the cooperative by the members. I tried to make it clear that I was asking for these clarifications to better understand the relationship between the TVA and the Mountain Electric Cooperative.

Since sending that email, I have been told the TVA is responsible for ensuring the money available to the Cooperative will cover operating costs, and if there is a surplus, the Cooperative either invests those funds into infrastructure or returns it to the members. Remember, the MEC is a non-profit organization, so they can’t show a profit. It’s also my understanding the TVA receives monthly and annual reports to demonstrate that budgeted costs do not exceed revenue and vice versa. 

This is curious when you think about it. As I have said, rumor has it over three million dollars was found in a separate account. If the TVA monitors reports for a general fund, they would never know of a surplus maintained in a separate account. However, how did the money get there? Who moved the money to the account? When and why did they do it? Who moved it back, and when did that happen? It seems the more we ask, the more questions we have. Do you get the feeling it is the fox guarding the henhouse?

A week and a half later, I received a response from Ms. Moore. She wrote the TVA is responsible for keeping rates low and ensuring operations and assets of the electric system are primarily for the benefit of the consumer of electricity. The MEC must submit electric rate requests to the TVA for review and approval. Ms. Moore explained the TVA is responsible for ensuring that rates have an underlying cost basis and provide non-discriminatory treatment among customers within the same rate class. I suggest you read Mr. Moore’s email to me and make your own determination as to whether or not she adequately answered the simple questions posed.

My Efforts With Other State Entities

Since I did not have any guidance as to whom I should speak to, I began calling governmental entities seeking assistance. First, I called the Office of the Attorney General. (615-741-3491) The representative there told me I would need to contact the Office of Consumer Affairs. 

So, I called the Office of Consumer Affairs. (615-741-4737) The representative at consumer affairs told me I needed to call the Tennessee State information Line, so I did. (615-741-3011) They told me I needed to call the Department of Commerce and Insurance Regulatory Board. (615-741-2241) I called them, and their representative told me I needed to contact the Tennessee Public Utility Commission, formerly the TN Regulatory Authority. (615-741-2904)

I called them, and I was told they regulate private utilities, not cooperatives. The nice representative said I had to take my issues with the cooperative to the Board of Directors. I reminded her that the issues I am experiencing are caused by the Board of Directors and their representing counsel. After explaining everything again, the representative said it sounded like I needed to file a complaint with the Comptroller of the Treasury due to the possible waste, fraud, or abuse committed by the MEC Board of Directors.

After concluding my call with the nice woman, I submitted a contact us form with the Office of Governor Lee. Five hours later, I received an email from Governor Lee’s Office requesting more information. The email provided a number for me to call. (615-253-7730) I called Governor Lee’s office, and I spoke with a young man who listened intently to my concerns. At the end of our conversation, he suggested I contact the Comptroller’s Office. (615-401-7891)

Explaining My Delay

During this time, I learned the MEC General Manager had resigned, and a new interim General Manager had been hired. I also learned the interim General Manager was a past General Manager with the MEC, whose tenure was in the area of thirty years. Since the new General Manager was not previously involved with addressing my concerns, I wanted to afford him the opportunity to do the right thing. So, on January 16, 2023, I sent an email to the Director of Member Services requesting the business email address for the new General Manager. 

On January 17, 20223, I received an email from the Interim General Manager. He wrote he was aware of my requests but had not discussed them with the Board of Directors or the MEC attorney. The GM also wrote the Board is reviewing my requests with legal counsel and that he should have more information after the January 26th Board meeting, since my requests were on that meeting’s agenda. I felt the right thing to do would be to wait until after the meeting before calling the Tennessee Comptroller of the Treasury and filing a formal complaint against the MEC and the Board of Directors.

On February 02, 2023, I sent an email to the Interim General Manager asking about the status of my requests for records. The MEC General Manager did not respond. 

On February 09, 2023, I sent a second email to the Interim General Manager requesting an update on the status of my requests. At the end of my email, I wrote I wanted to afford him one more opportunity to provide the requested records or state in writing the grounds for which my requests are being denied.

A short time later, I received an email from the MEC Interim General Manager. His email read the Board had directed Attorney George Wright to respond to my request. The response should occur by the end of this week or early next week. Well, the end of the week has come and gone, so perhaps it will be early this week that I will finally receive a response from Attorney Wright regarding my requests. 

Sadly, Attorney Wright has made no effort to provide me with any response in the past. Think back to the denial letter Attorney Wright wrote on November 03, 2022. You know, the one in which he made inaccurate statutory references. In that letter, he wrote, “I will be preparing and forwarding a formal opinion letter to the board, and if authorized, will forward a copy to Mr. Root.” Well, either he never wrote this “formal opinion letter,” or the Board did not authorize him to send me a copy.

How do you feel about this? I believe it is abundantly clear legislative action is needed. Tennessee needs mechanisms in place to ensure Cooperatives are transparent and accountable. The law also has to identify to whom violations of the law should be reported and who will conduct the investigations of those complaints. What good is a law if it cannot be enforced? Think about it!

Email Communications by Date

The October MEC Board Meeting | MEC Part 6

Tennessee Law Governing Cooperative | MEC Part 5

I Just Want Information From the MEC! | MEC Part 3