Taos Community News Update

By: Bill Whaley
3 September, 2016


KCEC Rate Hearings

On Wednesday, Sept. 7, the Public Regulation Commission will hear a motion from Kit Carson Electric Cooperative to lift the suspension of non-residential rates. On March 2, the PRC issued an order in response to KCEC’s motion to “narrow” the focus on hearings to “residential rates” due to KCEC member-protesters and subsequent interveners, who sought a hearing in front of a Hearing Examiner. At the time the PRC suspended both “residential rates” and “non-residential” rates for nine months. Since then KCEC, KCEC member-interveners, and the PRC staff have engaged in a series of “fact-finding” exercisers in order to determine whether KCEC’s rate request is ultimately “just and reasonable.” Now KCEC wants to change the rules of the hearing process. Members did not receive “notice” back in March of KCEC’s request for non-residential rate increases per the hearing process.

The process of administrative utility law is exceedingly complex, especially for the interveners who represent themselves “pro se.” Intervener Peggy Nelson, a retired jurist, is the only activist with formal legal training. Less experienced activists include Link Summers, Rose Des Georges, Gene Sanchez, Arsenio Cordova, Jerome Lucero, and your truly have engaged in asking and responding to endless “interrogatories.” (Two other interveners remain less active.)

In a nutshell the interveners are seeking to hold KCEC accountable not only for electricity rate request increases but also for ‘diversification” or the KCEC’s activities regarding the Call Center, Command Center, Propane, Internet and Broadband ventures. The PRC staff itself has identified a number of KCEC excursions into solar activities as requiting further “investigation” due to KCEC’s unorthodox practices that possibly violate New Mexico statutes. A weeklong hearing on the residential rate increase has been scheduled to begin Sept. 19 by the PRC’s appointed Hearing Examiner.

During this process, the PRC staff, which is supposed to represent the “public,” has analyzed KCEC’s flawed cost of service study presented to the PRC by separating the costs of diversification from electricity operations. However, the process is flawed by definition due to hoary administrative rules, which mandate the focus on the test year of 2014 in this case. By restricting the test year to 2014 interveners who seek the effects of what happened prior and post 2014 are hobbled in determining and presenting the “facts” about the complete state of KCEC’s financial health, all of which factors affect electricity operations.

The Coop itself appears to be deeply in debt, due as much to diversification as it is to changes in electricity sales and service. The recent “purchase” of its contract from Tri-State G&T by the Guzman financiers at a cost of $37 million plus a potential increase in maintenance costs only adds to contractual obligations passed on to members, allegedly increasing costs with promises of relief in the future. Nobody knows what KCEC got for its Guzman buyout of $37 million dollars in real assets from its Tri-State buyout.

Indeed, the hearing processes has been plagued with changes sought by KCEC to first narrow the scope and restrict the issues to residential rates despite the obvious affects of a rate structure that favored commercial entities at the expense of residential customers. Now KCEC wants a free ride on the backs of the residential customers while separating the effects of the non-residential customers from the mix.

According to statute and rules the PRC has little say over “diversification” despite its alleged negative effects on the Coop’s cash flow. From what this intervener can tell, reports for the last fifteen years show that KCEC’s diversification has lost money on every single project and cost Coop members millions of dollars in the failed outside programs.

Both KCEC’s long-term investment in “diversification” and the “$37” million-dollar buy-out of Tri-State, appear to be backed by KCEC collateral. Loans and grants for Broadband from USDA/RUS have tied up KCEC assets. Meanwhile, according to CEO Reyes’s public explanations, the Guzman “37” million dollar deal ties members to this financier for the next six or seven years but how or for what purpose members don’t know. The associated overhead of maintaining transmission lines, substations, formerly the responsibility of Tri-State, has not been explained.

Reyes has said this $37” million “debt” is not a “debt” but implied that the debt is certainly a “contractual obligation.” Ironically, according to testimony filed by staff, KCEC still owes some “$5million” for the historic year 2000 “Plains-Tri-State” merger.

During recent weeks KCEC has managed to maneuver the PRC staff into a “political” agreement and stipulation, which from the point of view of the interveners, compromises the integrity of staff’s analyses and may result in staff “walking back” its filed testimony. KCEC’s errors of judgment during the hearing process, including this late—in—the game motion to terminate suspended non-residential rates as well as the agreement with staff, an agreement rejected by the Hearing Examiner, suggests KCEC is currently in a desperate cash flow situation. Raising rates in order to “borrow and spend” appears to be the primary modus operandi of KCEC.

The KCEC Board of Trustees has been MIA during the hearing process.

Town of Taos

Whether you agree or disagree with Manager Rick Bellis’s promotion of the proposed four-story hotel, we’re glad to hear local residents showed up to question the vertical direction of the community at a recent town meeting. The issue of hotel “height” and direction of the community in terms of its long-term cultural appeal is at issue. By avoiding discussion of a “master-planned vision” or some semblance of long-term thinking the Mayor and Town Council increasingly subject themselves to the perils of “patchwork planning” and ad hominem attacks.

We’re glad they kicked the can down the road while the citizens ruminate.

Manager Bellis has claimed for two years that the Town needs to adjust to changing demographics as the so-called (by Bellis) “Blue hairs” decline in number and the younger more active experiential tourist and concert-goers become the norm and the target of Taos marketing. Certainly the Town-sponsored concerts “appear” successful. The tourist season in Taos has exceeded expectations in terms of traffic and the hospitality business this year though the retail sector, see the empty storefronts, has yet to recover.

Though pleased by the Town’s “economic” tourist turnaround, there’s a caveat: this sudden upsurge in tourism appears to be a national trend. I just returned from Lake Tahoe, where I was told, “Every weekend is like the Fourth of July” this summer. In the long term Taosenos should look at the history and culture that brought the tourists here. The increasing push toward corporatization by Bellis, Barrone, and Hahn seems like short-term thinking, given the history of art, artifacts and landscape that has so appealed to visitors historically.

Historical Caveat

Lately I have been revisiting 1999 in an effort to refresh my memory about the book I’m writing, detailing the Horse Fly year from 1999 to 2009. Then Tom Teegarden, the director of Taos Pueblo Enterprises (TPE), was promoting the “$37 million” Kachina Casino deal. Ultimately the Tribal Council and Tribal Government in their wisdom, thanks to activists from Rise (homegrown Native activists) ran Teegarden off the reservation and cancelled the deal, voiding the threat to Tribal sovereignty.

Though smarter and more wily than Teagarden, both Rick Bellis at the Town and Luis Reyes at the Coop appear cast in the mold of promoters, who focus on short-term objectives. In their wisdom, the long-lived Tribe resisted the hustle. If you read books written by reputable archeologists and anthropologists or observe the “doings” of Taos Pueblo, you can see how taking the long view benefits their community as a whole. It’s no accident that our indigenous friends on the other side of the cattle guard have maintained a culture for more than a thousand years i.e. in their words, since “time immemorial.”

The victory over the Kachina Casino deal turned, partly on a warning from a federal judge, who declared that an “Environmental Impact Statement (EIS)” was necessary not the more limited “Environmental Assessment. (EA).” Federal Judge Robert De Giacomo said about the presentation of the EA by BIA and TPE attorneys, “I criticize it from the bench.”

(Just as the Town needs a complete “vision” so the Coop needs a complete “business plan.”)

Elected officials at Town Hall and Trustees at the Coop might take a page from Taos Pueblo’s history and remember that the long-term economic and psychological health of the residents can benefit from acknowledging the “traditions” and “culture” of the community as a whole, not just one man’s vision of modernity.

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