A group of member-owners in Valley Electric Association is working to unseat the current board of directors at the co-op as distrust by some ratepayers grows.
The member-led initiative launched its efforts with a petition-signing campaign to remove Valley Electric’s board on Facebook under the label VEA Members for Change just under a month ago amid announcements by Valley of rate hikes for residential electricity customers.
With the recent announcement of an investigation on Valley by the sheriff’s office into an alleged cover-up of sexual harassment where cooperative monies were used as “hush money,” along with the arrest of Angela Evans, named CEO of the co-op in October 2018, more members are showing up at the petition-signing events, according to organizers.
“I think the biggest message is there’s just more and more voices calling for the board to resign,” said Ken Johnson, a former Valley executive who is helping with the VEA Members for Change drive to replace the co-op’s board.
Recall
The group has gained over 500 signatures as of Monday and is expecting to reach 1,000 signatures by the end of the weekend, according to Johnson.
The group is planning to set up a petition-signing area on the sidewalk in front of Valley’s conference center before the annual meeting for Valley’s District 1-south Pahrump.
That meeting is set to run from 5-8 p.m. on Thursday at Valley’s conference center at 800 E. Highway 372. Three to four members from VEA for Change, which has grown to about 100 according to Johnson, will set up about 4:30 p.m. on the sidewalk in front of the conference center.
Members will also set up from 9 a.m. to 5 p.m. at Trish Rippie Realty at 3370 S. Highway 160, Suite 1. Petitions are also available at businesses around Pahrump: Coyote’s Den bar at 3971 E. Kellogg Road; Jack Champion Haircuts at 361 S. Frontage Road; and Shear Image Salon at 2301 Winery Road.
Johnson said the group needs to collect signatures equating to 10 percent of the membership to get a meeting called. That qualification is in Valley’s bylaws, he said.
Johnson is estimating there’s roughly 18,000 members, or about 1,800 signatures, in the co-op that serves more than 45,000 people in a 6,800-square-mile area along the California-Nevada border that includes Pahrump, Beatty and other areas in Nye County and parts of other surrounding counties.
Johnson said he’d like to get about 2,000 signatures overall.
Johnson explained that if the group is successful in gaining the required number of signatures, the next step will include a meeting of the members where the current board of directors could be voted out. Following any vote to remove the directors, at that same meeting, a new group of directors could be voted in.
Johnson said the VEA Members for Change group has been working on curating a group of potential replacements for the current board of directors.
“Our community group has engaged people to get ready for that eventuality because it would have been irresponsible for us to start down this road without a plan for what’s next?” Johnson said. “We had already reached out to community leaders and business leaders, people that are able to follow the bylaws. I think there is a path to taking care of that.”
Movement
In the past several weeks, hundreds of members have shown up to petition-signing events around Pahrump, many of them pointing to the announcement of rate hikes that went into effect March 1.
The co-op announced a 9 percent rate increase for residential customers beginning on March 1. That increase also included the implementation of a $5 adjustment to the co-op’s basic service charge, increasing it from $15 to $20, information in news releases from Valley stated.
Several member-owners of Valley who showed up to sign the petition to remove Valley’s current board of directors were upset over the announcement of the rate hike. Many of these members argued that they were promised rate stability until 2024 if they went ahead with the more than $200 million sale of Valley’s transmission system.
“When they did the vote, the board, as an inducement, promoted five benefits: 9 percent rate increase that had taken effect would be rolled back; there would be no rate increase to at least 2024, possibly 10 years; the $579 check; $10 million in patronage capital retirements; and the Pahrump community center would be built,” Johnson said.
Not all those things have occurred, Johnson said.
Johnson is hoping to get a fresh set of eyes in the board room.
In a video release from the Nye County Sheriff’s Office on Feb. 22, it was stated that “it is suspected that the financial payouts may have contributed to the recently announced Valley Electric rate hikes.”
Johnson also had concerns about the board’s reaction to the recent execution of a search warrant at Valley and of the arrest of Evans.
“Last night’s arrest is just another in a string of, since the rate increase was announced, it’s just a series of red flags that says the board of directors has lost control of this company and somebody else needs to give it a try,” Johnson said last Wednesday.
Valley Electric released a statement on Tuesday about the group’s move to remove the current board.
“The concerns of VEA Members for Change largely revolve around allegations of financial irregularities,” said Mike Hengel, executive vice president of communications at Valley Electric, in an email.
“During the transition from CEO Thomas Husted to CEO Angela Evans, the Board of Directors engaged the accounting firm of Hinton Burdick to conduct a transitional audit of financial activity, that included internal controls, cash activity and expenditures for VEA between January 1, 2016 through July 31, 2018. The results: Hinton Burdick found no wrongdoing or mismanagement of funds – including the funds resulting from the transmission sale. Had Hinton Burdick found issues, they were authorized to and would have gone deeper,” Hengel said in an email.
“No accounting firm is going to ‘overlook’ or omit important information during a review,” he continued. “Any party can allege anything they want, but we have no reason to believe that VEA books are somehow ‘hiding’ something.”
At the time of this report, a representative from Hinton Burdick had not given the Pahrump Valley Times a statement. A message was left last week.
Johnson responded to Valley’s statement saying “I think the group is coalescing around the broken promises of the transmission sale. That’s what the group is about. Then this other stuff only makes it look like there’s deeper problems, but we were out in front before any of that was known. After we got out there about the broken promises, then people stepped forward with the other stuff, so the two are not related in any way shape or form.”
Johnson continued saying that “although, the two scandals, the sexual harassment scandal and the CEO being arrested, only reinforces the position that there are serious governance issues at the company and with the executive staff. That calls for fresh eyes and a new perspective,” he said. “Our group has not accused anybody of wrongdoing, it’s simply not minding the store.”
Evans arrest
Evans was arrested for embezzlement of $3,500 or more on Feb. 26 during the execution of a search warrant at Valley. It’s alleged by the Nye County Sheriff’s Office that she billed $75,000 worth of work on her personal residence to the co-op.
Valley announced that Evans was put on administrative leave pending an investigation by an outside, third-party firm following her arrest.
The co-op named Chief Financial Officer Steve Morrison as acting chief executive on Feb. 27. On Monday, Valley put a news release out stating an interim chief executive, Richard Peck, had been named.
The sheriff’s office is continuing its investigation into an alleged cover-up at Valley that included payoffs to possibly current and former employees of Valley so they would keep quiet about alleged sexual harassment by former CEO Thomas Husted on a female employee.
The sheriff’s office is expected to release more information on March 10 on the investigation.
Only Evans has been charged, action stemming from the allegations about VEA work/billing involving her residence.
For more information about VEA Members for Change, head to Facebook and search its name or call 775-909-2832.
Contact reporter Jeffrey Meehan at jmeehan@pvtimes.com