St. Matthews, SC (Paul Kirby) – The entire remaining board of the Tri-County Electric Cooperative has resigned and agreed to drop their legal actions against the co-op as well as agreeing not to file any further civil suits against the utility or any of its customers, according to documents filed in a Calhoun County court this week. This was done with the agreement that their legal bills of approximately $125,000 would be paid by Tri-County Electric Cooperative. This all followed a meeting last Saturday where the members voted to toss them all after it was discovered earlier in the year that they had been paying themselves what almost everyone considered unreasonable compensation for years. During the same Saturday meeting, the customers approved a new set of by-laws that would govern the cooperative. Both of Saturday’s votes were approved overwhelmingly. The meeting Saturday was called by a petition of the customers to force a vote after several previous meetings had become heated and had even been skipped entirely at times by the entire board of the cooperative.
Tri-County Cooperative, just one of approximately four utility companies that has at least some service area in Lexington County, is not supposed to be a for-profit business. During the electrification of America after the turn of the 20th century, large, for-profit utility companies found it wasn’t profitable to build the necessary infrastructure to provide electricity to the very rural areas of our state to serve a handful of customers. Because the people of these areas wanted electricity just like the people who lived in the cities, they joined with family and friends and built their own cooperative utilities or co-ops. They bought electricity from a larger business that generated the energy, in South Carolina that was usually state-owned Santee Cooper, and then ran it through their own distribution systems to the rural customers. In many cases, they cut the trees used for poles, strung the wires themselves, and all turned out to see the first lights come on. Of course, customers had to pay for the electrical energy, but the cooperatives weren’t intended to make money. If, after all expenses were paid and some money was put back as savings for upgrades, expansions, and disasters, there was still money left, members who had belonged to the cooperatives for a certain period of time got “dividend” or profit-sharing checks, a practice that still goes on today. It was always meant to be a neighbors-helping-neighbors concept, and in the case of what has apparently been going on with the board at Tri-County, it became a “help yourself” mentality for many board members some members have said.
There were certain state laws that governed this process. If the cooperatives followed those laws, they were considered tax exempt. Tri-County Electric Cooperative was and will remain tax exempt as long as, “85% or more of the income consists of amounts collected from members for the sole purpose of meeting losses and expenses,” according to a lawsuit filed by a member in May of this year, that clause and the amount that they discovered they were paying their board started the alarm bells, and riled the anger of members over what board members were actually making.
According to tax records, the part-time board members were being compensated well above what most would consider to be reasonable. Some were even making in excess of $100,000 per year for a job that required that they meet only periodically. The actual day-to-day operations of the utility and all of the decisions that come with that job, were made by its CEO, Chad Lowder as a full-time, paid employee.
The Saturday meeting where the 1,452 voting customers were present, overwhelmingly cast ballots to fire board members who had not already resigned. Only 30 voting members Saturday said the board should have remained. The customers voted to approve the new bylaws question by a margin of 1,322 for and 155 against.
Tri-County Electric Cooperative services portions of Lexington County in and around parts of Sandy Run, some areas outside Gaston like the Silverlake region, and other very rural areas outside the town of Swansea.