La Plata Electric Association has rejected an offer to buy its telecommunications company for $20 million.

In a resolution passed Monday, the LPEA board of directors agreed to terminate the agreement LPEA has to sell common stock in REANET to the Englewood-based TCOM Ventures.

On Sept. 6, TCOM offered to buy REANET from LPEA and its partner, Empire Electric Association, for $20 million. REANET was created by LPEA and Empire to build a $100 million fiber-optic network serving southern Colorado, and parts of Utah and New Mexico.

TCOM supposedly had access to the necessary funding to build the project.

Monday’s resolution was based in part on a condition in the offer that LPEA "has been satisfied, in its own discretion, as to the financial viability of TCOM." The resolution also says the decision to kill the deal was reached after an outside auditor and staff members looked at TCOM’s books.

LPEA spokesman David Waller said LPEA has an agreement with TCOM not to discuss the negotiations.

TCOM has had a flurry of bad financial news recently. A Sept. 8 SEC filing by TCOM said, "Substantial doubt exists as to TCOM Ventures' ability to continue as a growing concern." On Oct. 9, TCOM announced that management had been restructured, with an executive committee taking over operations.

On Oct. 19, TCOM’s chairman of the board, Jim Roberts, said the company’s financial statements and drop in stock price were symptomatic of dot-coms overall, and that auditors were simply being cautious.

TCOM’s stock value plunged 32 percent Monday, falling 3 1/4 cents a share to 7 cents. Its 52-week high on Nov. 3 was $9.75, which is a loss of 99 percent in share value.

A phone call to TCOM on Monday was not returned.

Waller said LPEA is actively negotiating for the sale of the REANET shares that are not going to go to TCOM.

"To say that we have a buyer may be stretching things a little bit at this point," Waller said. "When we got the contract from TCOM, we had been shopping it out, talking to a few different people, and then TCOM said they would try the deal. So we’re back to the same stage, we’re talking to folks."

Waller said the fiber-optic project among LPEA, Pathnet and Tri-State Generation and Transmission is not affected by the TCOM offer being rejected. Pathnet is building a fiber-optic line between Albuquerque and Grand Junction.

LPEA critic Bill Bontrager said he was not surprised by the rejection of TCOM’s offer. "They still haven’t answered one of the fundamental questions, which is, ‘How much are we on the hook for REANET, and what does REANET have?’ We will be continuing to ask those questions," Bontrager said. He is a member of the LPEA watchdog group, Friends of LPEA.

Bontrager is a party to two lawsuits against LPEA over access to records and whether the electric co-op has to divest itself of its for-profit subsidiaries.

Bontrager said he hopes LPEA finds another suitor for REANET.