|
||||
|
May 8, 2001 By Tom Vaughan The weather outside the Mancos school cafeteria Saturday was much nastier than the climate inside, probably to the great relief of the Empire Electric Association board conducting the cooperative’s annual meeting. A reported 150 stockholders were present Saturday morning, more than the 50 that constitute a quorum under the association’s bylaws. Though the recent news that Empire is seeking a $7.5 million loan to cover its ill-fated venture into telecommunications was on many tongues during the hour of coffee, doughnuts and chat leading up to the formal meeting, little of that concern was directed toward the people who run the cooperative during the meeting. General Manager Neal Stephens recapitulated the co-op’s recent telecommunications experience, in which it and the La Plata Electric Association jointly invested $15 million to create REAnet, which was supposed to take the lead in bringing fiber-optics to the area. The company recently declared Chapter 11 bankruptcy, and Empire was forced to seek a loan to cover its lost investment. Tri-State Assistant General Manager Steve Fausett reviewed the California power debacle and its probable effect on the Mountain West, predicting rates would rise next year. Not many of those present stepped forward when the meeting was opened for questions. Cortez resident Darlene Dennison wanted to know who the "CEO with telecommunications experience" was that Stephens referred to in describing the course of the REAnet project. The name given in response was J. Kelly Bloomer, of Durango. Dennison also wanted to know what the interest on the loan would be. Stephens said it would be a variable rate, expected to be in the 7-8 percent range. The former Cortez City Council member went on to point out that the Empire Electric franchise to operate in Cortez would be coming up for a vote (in three years, according to Stephens). She said she wanted to be sure it was not handled in the same way as the recent renewal of the Greeley Gas franchise. Dennison stated that the TABOR law requires a public vote "on any extension of an expiring tax," and that was not done when the Greeley Gas franchise was up. One questioner wanted to know what the basis was for the reported REAnet valuation of $28 million in November 2000. Stephens said the CEO (Bloomer) had an engineering firm out of Denver (R.W. Beck, according to an article in Colorado Country Life, the electric co-op’s publication) evaluate the business plan, adding that some of Beck’s assumptions had not proven out. Bill Witthans, of Mancos, asked what the current value of REAnet was. "I think it’s close to zero," Stephens responded, saying it was because the existing facility was not built out in a coherent manner. Empire board President Bill Bauer said the current value depends on what they can sell it for and Empire expects to get a REAnet-funded report in the next few business days that will provide a new assessment, based on completing the system in a smaller coverage area. Mancos Valley resident Conn Marsden asked Fausett, "In your planning, do you do a least-cost resource plan?" Fausett said Tri-State Generation and Transmission Association does plan on that basis. |
||||
|
Copyright © 2001 the Cortez Journal.
All rights reserved. |
