SAN ANTONIO, Texas—A dramatic scandal that threatened the reputation of South Carolina’s electric cooperatives just a few years ago has become a lesson in how to restore trust, key players told co-op leaders at PowerXchange.
In 2018, The State newspaper in Columbia revealed that trustees of Tri-County Electric Cooperative in St. Matthews had received annual salaries of nearly twice the state average for co-op board members. In 2016, the board chairman made almost $80,000 a year.
The newspaper also reported that the nine trustees held an unusually high number of meetings—50 in 2017 alone—and collected $450 each in allowance every time, even though some meetings lasted only about 15 minutes.
At one point, the board appeared to be chastened and proposed bylaw amendments to limit their compensation. But some trustees then reversed course and convinced a slim majority of co-op members to vote against the bylaw changes.
Two trustees resigned in protest, and angry consumer-members later voted out the remainder of the board members.
Today, Avery Wilks, the reporter who broke the story of the scandal, is vice president of communications for the Electric Cooperatives of South Carolina.
Wilks said the fact that co-op members took back their co-op and “set Tri-County right” turned him into “a huge admirer” of co-ops.
He said he also was impressed by what he called the “brave decision” by Tri-County CEO Chad Lowder to stand up to his own board and speak candidly about his opposition to what trustees were doing, despite their threats to fire him.
The scandal threatened to taint the reputation of all 20 of the state’s electric co-ops.
“I had members of Congress asking me ‘what’s going on down there?’” said Mike Couick, president and CEO of the statewide association.
The association ultimately worked with the state legislature to pass a bill to prevent the kind of abuses committed by Tri-County’s trustees. The sweeping new law, signed by the governor in 2019, requires the state’s co-ops to publicly disclose the salary and benefits paid to board members and bans trustees from using their positions to profit from other business dealings with their co-ops. The legislation also subjects co-ops to oversight by state regulators for the first time.
“You’ve got a responsibility to the membership,” Couick told co-op CEOs and directors at a March 4 breakout session moderated by Pat Mangan, NRECA’s senior director of governance education.
“If you see something go wrong, you’ve got to do something,” Couick said, “or else you’re complicit.”
Lowder said his co-op’s former board chairman was “a bully” and warned other CEOs to be concerned if their boards are “totally dominated by one person.”
“Talk with NRECA and your general counsel if you need help,” he advised, adding that NRECA helped him push for change. “Use the resources you have.”
Wilks urged co-op leaders to ask themselves a simple question when it comes to governance.
“Would the members approve?” he said.
And, he added, “if you can’t justify it to a reporter, don’t do it.”
