PEC Board shoots down buyout offer
A July 17 letter to PEC General Manager Juan Garza from Quentin Capital Management director Kurt Q. Holmes offered to assume all of PEC’s liabilities while paying out 100 percent of the co-op’s patronage capital back to members at a cost of more than $300 million.
“This purchase will unlock capital for members that they otherwise cannot access, injecting about $300 million into the local economy at a time of economic need,” Holmes said in his letter to Garza.
PEC spokeswoman Anne Harvey said the board unanimously declined Holmes’ offer, adding directors moved to amend the co-op’s bylaw s to establish procedures for reviewing “qualified offers” in the future.
“The board literally took a stand unanimously in support of a resolution that the cooperative is not for sale,” she said.
Co-op spokesman Michael Racis said Holmes first approached Garza with the offer during recent Congressional testimony in Washington, adding PEC officials never solicited any such entreaty.
“The directors have to give any offer due diligence,” Racis said.
Some PEC members who caught wind of the offer spoke up at Monday’s meeting.
“Our co-op should not be for sale,” PEC member Jerry Thomas said at the meeting. “I think the board should just say ‘no.’ We must create a policy that says PEC is not for sale.”
In his letter, Holmes said he expected local resistance when he made his offer, adding that many co-op members may not care where their power comes from.
“I am aware there may be a natural distrust of ‘city slickers’ from New York, and you may be concerned about a local push-back to my proposal,” he said. “Despite the concern about a push-back, it is worth knowing that a (National Rural Electric Cooperative Association) survey of cooperative members found that more than a third of co-op members do not know that they get their electricity from a co-op, and that fewer than 5 percent view themselves as ‘owners’ of their cooperative.”
Co-op officials said any such offer would need to be approved by PEC’s 220,000 members before it is finalized, making a buyout a remote possibility.
In other action, directors passed a resolution with the goal of achieving a 20 percent reduction in energy use requirements for residential and commercial customers and confirmed Luis Garcia as the co-op’s interim general counsel.