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The Deployment of Counter-Measures is used by the CEO and Board of directors at VEA to counter incoming public inquiry and protect them from anger expressed by the members.
To obtain any information from VEA one is required to fill out a DISCLOSURE OF INFORMATION form consisting of 7 pages and have it notarized and then it is forwarded to the CEO and Board of Directors for approval to dispense the requested information. In many cases this is in violation of IRS code 501 which tax exempt companies come under.
I was at the meeting sitting in the back near the coffee and a few members made some very interesting points. But overall most of the people in attendance where there for the cookies and door prizes. Such a shame that there is so little interest to understand their own co-op that Husted is allowed to run the company with an iron fist usurping federal laws. In any event here is some additional information to those who are concerned about their co-op.
• Why did VEA expand beyond their territory into Creech Air Force Base and how does that lower our rates and what are the consequences of that decision?
• Was the sale of the 230KV transmission line sold at fire sale prices because Tom Husted and the Board of Directors put VEA in crushing debt?
• Ask your Director if after Gridliance signed the contract with VEA, the buyer immediately asked for a $10.8 million dollar increase on the 230KV line.
• Do you know that Tom Husted, the CEO, said that VEA would get a new revenue source for the sale of the transmission line? Remember that? Well it appears that those who OWN the transmission line receive approximately $10,000,000 from California Independent System Operator (CAISO) to maintain the power line. Once the new buyer owns the line the $10 million goes to them and not VEA. Then the buyer gives VEA $10 million to maintain the lines. NET RESULT TO MEMBERS IS ZERO. If the sale is completed why aren’t members allowed to vote on where the additional $60,000,000 goes after paying off the $579.00 bribe to each and every member for their YES vote?
• Electric Cooperatives are not charitable organizations and should not be giving member’s money away but instead retiring capital credits, reducing rates or paying down debt. VEA already has a Charitable Foundation to handle charities.
• When Valley Electric Association was created back in 1964 it was a small, lean, member owned utility literally built by the members and focused on a simple goal. Bring reliable, affordable power to their communities. Today it has evolved under Tom Husted into a bloated 17 member management team most of who are receiving over $200,000 a year with benefits and the CEO over $600,000 with benefits.
• Many Co-operatives in the Western US have lower rates and its management takes a much lower salary maintaining the spirit of the Electric Co-operative. Not VEA and Tom Husted, its CEO. Higher rates and outrageous salary’s is why our rates are so high.
I couldn’t help but laugh when I saw VEA CEO Tom Husted on TV Channel 46 via youtube lying to the members about what is holding up the sale. True, the Federal Energy Regulatory Commission has to approve the sale but it only needs one member to vote on it. There are 5 commission slots on that committee but has operated with 3. There has been a resignation end of January 2017 when Cheryl LeFleur was elevated to chairperson leaving now 2 on the commission and cannot have a quorum. Until a new person is appointed NOTHING GETS DONE. No pipelines, no VEA sale. Nothing to do with energy.
The deal is ALSO being held up in California by some of the 230Kv grid companies that are contesting rate increases that the buyer, Gridliance, of the transmission line is insisting on. Husted didn’t say anything about that except everything was proceeding fine and all the hurdles are passed except the FERC vote.
VEA members really didn’t think they were not going to get a rate increase after the 230Kv line was sold? You listen to the con artist Husted and he will steal the company blind from you low information members.
Gridliance wants a rate increase immediately. That’s something that VEA management and the incompetent six VEA Directors are hiding from you.
Do not think for one moment that those 6 Directors are working for you, the members.
I think VEA members will wait for a very long time for the sale to finalize….if ever.
Check back often for more VEA enlightenmentNovember 1, 2016 at 9:03 pm in reply to: Did VEA increase rates because they were in violation of tax exempt staus? #306
It’s quite simple. Valley Electric has to derive 85% or more of its income from members as follows:
The 85-Percent Member Income Test
A cooperative exempt under IRC 501(c)(12) must receive 85 percent or more of its income from members. The 85-percent member income test requires that the income be derived from members and
used to pay for services listed in IRC 501(c)(12)
The 85-percent member income test is computed each tax year. If in any year the member income falls below 85 percent of the total income received that year, the organization is no longer exempt under IRC 501(c)(12) for that tax year and must file a corporate tax return. Rev. Rul. 65-99, 1965-1 C.B. 242.
Many of us doing the research into VEA are questioning if VEA has already lost or is close to losing Tax Exempt status. My opinion is that VEA is way off the reservation for what a 501(c)(12) is defined in the Internal Revenue Code and what it was originally set up to do ( provide services to Members) not get awarded $100,000,000 contract to service Creech AFB and therefore have to lobby and spend enormous months of members money advertising all over the State Of Nevada as well as set up an office in LV. Such a huge waste of members money.
26 U.S. Code § 501 – Exemption from tax on corporations, certain trusts, etc
12(C) In the case of a mutual or cooperative electric company, subparagraph (A) ( 85 percent or more of the income consists of amounts collected from members for the sole purpose of meeting losses and expenses) shall be applied without taking into account any income received or accrued—
(i) from qualified pole rentals, or
(ii) from any provision or sale of electric energy transmission services or ancillary services if such services are provided on a nondiscriminatory open access basis under an open access transmission tariff approved or accepted by FERC ( Federal Energy Regulatory Commission) or under an independent transmission provider agreement approved or accepted by FERC (other than income received or accrued directly or indirectly from a member),
(iii) from the provision or sale of electric energy distribution services or ancillary services if such services are provided on a nondiscriminatory open access basis to distribute electric energy not owned by the mutual or electric cooperative company—