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February 20, 2014:
What I’ve learned about KIUC Chuck Lasker As a Kauai Island Utility Cooperative Board of Directors candidate, I have received quite an education in what the board does and how the system works. It has helped me realize why there are so many misunderstandings among members. While the information is not secret, it is not readily available or easy to understand.
I would like to change that, starting with this article, by clearing up some misunderstandings about KIUC and the KIUC board.
KIUC is a nonprofit corporation. It is owned by the members, so any money that is not spent on expenses is simply returned to the members. Therefore, our high rates are not due to profits or corruption. They are high because the majority of our energy is produced by burning diesel fuel that we have shipped in. There is simply no reason for the board to set rates higher than cost.
The board is highly regulated by federal and state laws. Board members risk lawsuits and even prison if they do not perform their duties properly. This includes what they can and can’t say outside the board room, how they communicate with management, that they perform due diligence in decision making and that they always act in the best interest of all co-op members as a group (not any individual member or group of members). Many of the issues some folks blame the board for are not even within the board is power.
The board is responsible for governance, not operations. They set, review and confirm basic corporate objectives, policies, strategic plans and annual budgets. They select the CEO and define goals for and review his or her performance. They monitor the performance of the co-op overall. The board doesn’t get involved in operational decisions like hiring, purchasing, or applying policies to specific situations. This division of responsibilities between the board and management is not arbitrary, it’s the law.
Our cooperative is a democracy in that we elect our Board of Directors and task them with making the best decisions possible. But that is where the democracy ends.
It is not a government body like the County Council. KIUC is a private company where board members must work together toward mutually agreed-upon goals under corporate laws, something the County Council does not have to do. Sometimes the board must negotiate contracts and long term deals in private or risk showing their hand and losing in negotiations, something the County Council does not have to do.
Board members must spend weeks every year in training, starting with getting a NRECA Credentialed Cooperative Director certification. Then they average 10-20 hours every week, often more, studying and reviewing information to make the best decisions possible for the members on issues of capital, equity, T.I.E.R., amortization, cash flow, P&L, Patronage Capital, etc.
The general membership can’t spend this much time, so any vote on a specific issue by members would be based on incomplete information. This is why members should elect board members they trust to make the best decisions, then trust them to do so.
I hope this has helped clarify some things for you. In the future I would like to expand on these topics. If you have any questions in the meantime, please feel free to email me. I’m not an expert yet, but I’m getting there.
– Chuck Lasker is a Kalaheo resident and candidate for the KIUC board of directors. He can be reached at firstname.lastname@example.org