Thursday, May 22, 2008

Candidates to reform the PEC - Stratton and more

The clubbiness at the Perdenales Electric Cooperative (PEC) board of directors won't ever be the same. After getting exposed for many malefactions and inside deals, the PEC board president resigned, the director elections have been opened up, and reformers have started running for BoD positions. A normally sleepy non-vote is actually worth looking into for Perdenales Electric customers.

One of reformers to vote for is Eric Stratton, running in PEC District 3. He is well deserving of support. As for the other districts, we got a rundown that we will pass along:

DISTRICT 2 (VOTING) - Sandy Jenkins (one of the first Republicans in Burnet County, wife to founder of ABC Pest Control) OR Glenn van Shellenbeck (founder of Van's Autoparts, one of the original plaintiffs on the lawsuit that opened things up in the first place)

DISTRICT 7 (VOTING) - Linda Kaye Rogers (one of the original members who raised heck and helped spur reforms in the first place; supported by former Hays County Commissioner Susie Carter)

DISTRICT 5 (ADVISOR) - Paul Langston (former Marine who worked for an energy company and also was one of the original members who raised heck and helped spur reforms in the first place)

DISTRICT 6 (ADVISOR) - NOT Charles Tessor (out of the country currently on business; concern he's too busy to dedicate the time to it); NOT Dave Bethancourt (part of the "good ol' boys" club of Hays County)


Eric Stratton said...

Just to expound a little further on why you should consider a vote for me, ERIC STRATTON, for PEC Board District 3, I plan to put the COOPERATIVE back in Pedernales Electric, for my family and yours. I feel that the basic problem with things stems from the fact that the Board of Directors for the most part forgot that they are first and foremost member-owners like the rest of us. I spent 5 years working for the National Rural Electric Co-ops, the trade association that represents the nation's nearly 1000 electric cooperatives, traveling the country and training and interacting with Boards, management, and members. I feel this has given me firsthand experience to understand what it takes to be a true electric co-op and can therefore help put that back to work for the members of PEC.

I aim to cut Board pay and benefits, make meetings more accessible to members, fire the high-priced "hired gun" lobbyists defending current practices, and lead the fight to perform a top-to-bottom modernization of the bylaws and rate structure--all in an effort to end the "good ol' boy" system of the past. If you agree with these principles, please vote for me and consider voting for the other candidates listed above so we can put the cooperative back in PEC!

Anonymous said...

Please take a moment to go back through the candidate forum and read more about the candidates. Did you know that one of the choices for District 2 has had a lifelong relationship with a sitting board member? Yes...Sandy Jenkins is a very close friend of Vi Cloud's. How can a realtor who is close friends with the existing board provide any reasonable opportunity to make a difference at PEC? If you are the least bit interested in mitigating the "cronyism" then we should all do more research! Make your vote count! Vote for people with experience that matters!

Texas Dave said...

Follow this link to hear Lila Knight, PEC Candidate, comments regarding the rules and processes...

George said...

i believe that PEC Candidate Tenorio is related to a sitting member...I agree with Anonymous - read the profiles and look for conflicts of interest and cronyisms.

Didn't Shellenbech get paid by PEC for the lawsuit? Is that a conflict?

Philip said...

District 2: Sandra Jenkins has no relevant experience whatsoever and, as reported, is connected with current board members. Van Shellenbeck's lawsuit against PEC makes him totally in conflict of interest with being on the board. I don't know how that was ever allowed to happen. I'm also writing because I know another district 2 candidate, James Williams, who is by far the best qualified of the district 2 bunch. He's an electric industry professional, principled, honest, and smart. If you want an intelligent board that will respect the members then that's who you need to vote for.

Michael said...

Paul Langston...are you kidding me? Go to the pec website ( and go to the video of the May board meeting, the section on member comments. Just watch Paul attempt, and fail miserably, to address the board. He doesn't even have his facts straight. Your recommendations are almost as bad as the ones posted by pec4u. You've only mentioned people with connections and that you already know about. So much for new blood and improved ways!

Joe S. said...

Wow! You sure missed this one. What about Barrera, Dunn, Hall, Cole and Williams! Look at their profiles! Are you even taking the time to look at the their platforms? Do you even know the issues? Instead you want us to elect a realtor/rancher, a borderline idiot, and others who absolutely no clue how to handle board room issues. Irresponsible and ignorant!

Anonymous said...

Re Paul Langston: "I am a retired, Professional Engineer who spent most of his life working offshore in foreign countries. Most of my life was on drilling projects. My experience includes designing and installing electrical distribution systems in South Texas oil fields I owned my own business in Mexico City for five years." He seems quite well qualified on a number of PEC matters.

Anonymous said...

Wrt Glenn van Sellenbach, here are his comments on pec4u website: "Accountant on the audit staff of Peat, Marwick, Mitchell & Co., 1973-1974. Founded Van's Auto Parts 1974; sold 2006. Practiced law 1984-1998. I was a licensed CPA, I am a licensed attorney."

"I am one of the plaintiffs in the class action lawsuit brought on behalf of PEC members. The lawsuit has accomplished many things (including allowing this open election) but more needs to be done. I think the lawsuit is too expensive a method of accomplishing the rest of the reforms. I would like to help finish the job as a Board member."

I have the experience in business; I founded Van’s Auto Parts in 1974 and grew it to six stores and almost 100 employees. I have the formal education; I have a degree in accounting and I was a CPA. I am dedicated, focused and frugal to a fault. Since I have been actively involved with the PEC lawsuit I know what needs to be done at the PEC and I have the skills, training and desire to implement the remaining reforms and help restore the PEC's credibility with its members."

Glenn says there are changes required and doing it as board members beats suing the PEC board to do it.

Anonymous said...

Many of the profiles in the PEC supplied ballot "sound" impressive. Go to the PEC web site and watch the video taped speeches. You'll see that many of the candidates aren't nearly as intelligent or well-spoken as their resumes imply.

James Spellman said...

I am a candidate for Advisory Director District 5.
I am retired with 37 years of Electrical Industry experience.
( General Electric, Power System Division )I know all PEC's neighboring utilities;LCRA, Austin Energy, CPS San Antonio and Brazos Elec. Coop.
Review your ballot for educational and other background information.
Visit www.pec4u and for video's of each candidate qand more info.
I am currently a retired rancher in Blanco County, but remain active in electrical industry matters. This past March I sponsored a Wind Energy/Solar Power conference in Dallas.
Elect an Electrical Industry professional.
Thank you for your consideration and vote.

James Spellman said...

The candidates have focused on few so called “hot button issues”; Board member term limits and compensation. GM Juan Garza has cleared up most of the other issues that were of concern. Lets look at compensation and assume it continues at $50 per year, times 17 board members = $850,000. annual payments.

Compare that to and overlooked in all the discussions, is the impact of the long term power supply contract with LCRA. The existing contract expires in 2016 and is automatically renewable for twenty years unless PEC cancels or renegotiates by 2011. Under this contract, the cost of electricity runs about $300 Million/year, or $2.4 Billion through the term of the contract. Electricity represents about two thirds of PEC's ongoing costs. This is PEC's largest purchase and should be considered very seriously.

PEC's current peak load is 1000+ MW's and this is supplied from LCRA through some 60+ substation delivery points, each having a power meter. Also part of the contract is the PEC owned 300 miles of 138KV transmission line that is maintained by PEC and operated and loaded by LCRA. The power purchased is supplied from Hydro, gas, and coal based generation , as well as some wind energy. 60% of this power to PEC is from coal fired units and this is reflected in our rate structure.

Our final electricity cost is determined through a complex formula of " Flow to Market" KWH rates modified by "Time of Use" factors. PEC does not currently pay a demand charge. Included in this power delivery is the roughly 40MW's of wind energy that LCRA is currently providing and this is separate from the 50MW's of the new AEP supplied wind energy for 2009. So in 2009 PEC will have approximately 8-9% of is power generated from wind energy. This will beat a lot of the other utilities in the state.

PEC has supply regulating capabilities at the delivery points using phase shifting transformers, but is restricted by ERCOT and LCRA to maintain a certain power factor(%) on the low side of the transformers. Also the new AEP supplied wind energy (2009) will have to meet ERCOT's new NODEL requirements.

One should also have an understanding of system synchronous operation, stability, flow and line loss, transient analysis, line design, relay coordination and surge impedance to be a contributing member of the negotiating team or to provide oversight to the Board of Directors.

As you can see ( with all due respect ) this is not just a Water Contract with LCRA as one candidate suggested. Electricity is complex and any contract oversight should be handled by someone with electric utility experience and knowledge. This person needs to be able to work with the negotiating team to make suggestions, when appropriate, and provide oversight to the rest of the Board of Directors on the contact issues at hand.

Juan Garza GM PEC and Tom Mason GM LCRA are in agreement to renegotiate the contract is a open and professional manner. This is a major change in the relationship between the two organizations.

There are several issues, including LCRA's next source and type of generating capacity and equipment, for which PEC needs to be consulted, since PEC will be paying, through electrical rates, for the Bonds used to finance the new capacity. PEC does not currently have this right, so we need someone, again, with electrical industry generating equipment and knowledge to be part of the Board of Directors to provide the proper advice or due diligence.

This contract impacts your monthly electric rates, so made sure you pick a candidate who really understands the electrical utility business, through experience.

James Spellman Advisory Director 5

James Spellman said...

One of the provisions of the LCRA Power Contract, that determines our electric rates
is the Time of Use of electricity. This is a critical element in the contract, since
time of use can be controlled all the way to the individual electric user, if a
time of use meter is installed. Let me explain.

In 2005 the government passed the Energy Policy Act which added five new standards
to PURPA 1978 ( Act ). The EP Act of 2005 required nonregulated electric utilities
such as PEC to consider the 5 new standards. One of the new standards was the consideration
of Time of Use Metering, that matched electric rates to the actual cost of electricity
( wholesale rate that PEC was charged by LCRA plus PEC overhead costs ) during the
day, so that the individual customer could choose when to use electricity to do
certain functions ( run appliances ). In this way the individuals would control
their electric costs, conserve electricity at peak periods and as a collective system
(PEC )reduce overall electric peak demand. Peak demand is usually the highest priced

This can get get very expensive, as outlined, because of metering installed costs
and meter communications with PEC. If Envision is capable it should be able to handle
the meter system communications. There are lesser cost variations of metering schemes,
and electricity pricing that would approach this goal but not be so expensive to

PEC has some Time of Use meters installed. This needs to be coordinated with LCRA
in the Power Contract and the Board of Directors needs to revisit this issue.

You need to elect someone with this knowledge and experience to move this program

James Spellman Advisory Director District 5 ( non-voting )

James Spellman said...

To : Joe S.

You might want to revise your recommendation for Advisory Director District 5 ..... see my comments.

james Spellman

Anonymous said...

James, are you open to nuclear energy use as part of PEC contract portfolio or closed to it? what is your view of nuclear power?

James Spellman said...

To: Freedom's Truth

Clean Nuclear Power is great;however, we must take what our power provider ( LCRA ) delivers. LCRA does not have access to nuclear power.

James Spellman Advisory Director District 5 Candidate

James Spellman said...

While talking to members and even some member candidates, I have noted a lack of knowledge about PEC’s Wind Energy Program and its cost. Most of the candidates are advocating more Renewable Energy and Conservation for PEC. PEC has Wind Energy available at ½ cent additional cost per KWH. That would mean $0.096 per KWH + $0.005 = $0.101 per KWH.

How many candidates advocating Renewable Energy have actually signed up with PEC for Wind Energy? I would hope that each is leading with their actions, and not just words.

Although retired, I remain connected to the Electric Power Industry. On March 27, 2008 I sponsored a Wind Energy presentation in Dallas, and because of the special interest, we also covered Solar Power
( more on that later ).

Wind Energy is competitive with our current electric rates. The major drawback to Wind Energy is its 35%
Availability Factor ( only operates 35% of the time ). When the wind is not blowing, conventional backup power generation is needed. While not necessarily needed for competitiveness the Federal Government subsidizes Wind Energy at 2 cents per KWH, and as it turns out the financial community requires this guarantee to put the project financial packages together.

A standard 1.5MW Wind Turbine and supporting tower, in quantities of 100 units ( typical wind farm ) all installed is = to $2.4 Million per unit, or $ 1600 per KW. These towers stand 240 feet high and the blade ( 3 each per turbine ) span is 230 feet.

Another concern is the lack of transmission line capacity to route the Wind Energy to major load centers. ERCOT is working on this problem.

Texas is the leading state for Wind Energy and Boone Pickens ( Mesa Power LP ) has just announced another 1000MW’s in the Texas Panhandle.

PEC has currently purchases about 40 MW’s through LCRA and another 50 MW’s will be coming on line in 2009, for a total of 8-9% of our peak load.

Austin Energy is looking at their own wind farm, so if PEC wants more Wind Energy, this represents an

Vote for someone with Utility Industry Background. Thank you.

James Spellman Advisory Director District 5 Candidate ----- already signed up for wind power from PEC

James Spellman said...

PEC announced its self generation program in November 2007 ( Texas Co-op Power ) and offers net-metering for self generation up to 75KW. Since the average home is between 4-7KW, this is a fair size home generator. This program is ready made for Solar Energy using PV solar panels.

Solar Energy is the most expensive Renewable Energy program commonly available, and requires City, State, or Federal subsidies in order to approach affordability. Solar Panels only generates electricity when the sun is shinning and requires conventional generation, when it is not.

Lets look at a recent large scale Solar Energy project proposed on the west coast for L.A. SoCalEd plans to install 250MW’s worth of solar panels on most of the roof tops, on buildings in downtown L.A. The installed cost is estimated to be $3500 per KW ( $875 Million ). The state is allowing SoCalEd to recover their costs in their rate base. Additionally the can sell the electricity generated. So the rate payer gets hit twice.

Now lets look at a typical home or small business solar panel installation. We will use Austin Energy as a case in point since they provide a subsidy to help promote Solar Energy. Austin Energy estimates that it costs between $6,000-$10,000 for a typical home installation. They are willing to subsidize at the rate of $4.50 per Watt ( 1KW = 1000 Watts ). Assuming the typical home has a electrical load of 4KW and we use the middle ground of $8,000 per KW installed, we get 4 times $8,000 = $32,000.

Since Austin Energy credits for 4000 Watts @ $4.50 per Watt = $18,000

$32,000 - $18,000 = $14,000 Net Cost ----- on top of this one can take a $2000 Federal Tax credit for 2008. So we can say it would finally net out at $ 12,000. I want you to note that the Austin Energy subsidy works out to a Net Cost of $14,000/4KW = $3500 per KW.

To calculate the payback we will use 6 hours of effective average sunlight per day ( over the whole year - per Austin Energy and others ). At the current PEC electric rate of $0.096 per KW we have savings of $0.096 * 4 KW= 0.384 * 6 hours = $2.304/ day *365 days/ year = $840.96/ year
$12,000/$840.96 = 14+ years payback. ((( Don’t forget one still needs to pay for the electricity when its dark )))

So even with the subsidy and tax break ( all paid for by the rate payer + the tax payer ) it is still expensive and will only be purchased by the wealthy electricity user. Remember the rate payer and the tax payer = YOU.

Certainly more costs need to be taken out of the solar panel product.

In summary, some cost comparisons:

Wind Energy = $1600/KW
Coal Fired Energy = $1800-$2000/KW
Gas Fired Combined Cycle = $ 1400/KW

James Spellman Advisory Director District 5 Candidate

Elect an Electrical Industry Professional. Thank you

Anonymous said...

Mr. Spellman may be an electric energy professional. But he has it wrong about wind. The capacity factor is not a measurement of wind availability as he indicates. A thirty five percent capacity factor should mean that the wind is blowing and producing energy over 80% of the time. In Montana our 40% capacity factors mean that the two biggest wind farms produce electricty more than 90% of the time.

spellman said...

Wow -- the election is over!!
You don't understand my comment. Wind can blow all the time and mostly at low velocities thus not generating any KW's; or at low KW's which does not cover requirements and backup fossil generation is necessary. The following is my recent writeup on West Texas wind( which should clear up the confusion):


Wind Energy is a naturally occurring interruptible power supply and currently is not relied upon for a normally scheduled power supply.

Since we are discussing Wind Energy, lets take time to review the unique Wind Energy market in Texas.

Wind Energy is generally competitive with our existing electric generation rates and it has the additional benefit ( to the owners of the Wind Energy generators ) of a Federal subsidy of 2 cents/KWH or $ 20/MWH. If you present worth the subsidy, it works out to ( 3 cents ) $30/MWH. On top of that the Federal Government also provides a $5/MWH “Green Fee”. So the Wind Energy generator starts off with a ( 3.5 cent ) or $35/MWH subsidy.

A standard 1.5MW Wind Turbine and supporting tower, in quantities of 100 units
( typical Wind Energy installation ) all totally installed and operating, costs about $2.4 Million per unit, or $1600/KW. These towers stand 240 feet high and the Turbine blades
( three each per unit ) span 230 feet.

A quick review of how a Wind Turbine generates electricity is important for a complete understanding of the availability of Wind Energy. Using the General Electric standard 1.5 MW unit, since they are the leading supplier of Wind Turbines in the US, lets review its operation. The rotating blades are secured to the Wind Turbine generator at the top of the tower and the angle to the approaching wind velocity is determined by a blade pitch control. This pitch control allows the unit to pick up low velocity wind and control high velocity wind over its entire operating range. This Wind Turbine starts generating electricity ( 100-200KW ) at a wind velocity of 12 feet per second ( 8 MPH ) up to 48 feet per second ( 32MPH ), when it reaches its maximum output of 1500KW or 1.5 MW’s. As the wind velocity increases the pitch control starts unloading wind to maintain the steady output of 1500KW’s, until the real wind velocity reaches 75 feet per second ( 50 MPH ), at which time it unloads all the wind, to shut down and protect the Turbine.

West Texas wind taken as a whole, has an availability of between 35 and 37 %. What does this mean? Using the South Trent Wind Project in Sweetwater, from which PEC will be receiving 90MW’s beginning in January 2009, lets calculate what energy we actually expect to receive:

8760 hrs/yr x 90 MW’s/hr x 0.37 = 291708 MWH of energy

Since we signed up for 90 MW’s per hour, this means PEC comes up short by:

8760 hrs/yr x 90MW’s/ hr = 788400 - 291708 = 496692MWH per year

Since we depend on this Wind Energy, the difference will have to be made up by fossil generating capacity. Thankfully we have the 15% generating backup in our new LCRA contract for progressive power, to fill the gap without penalty.

This is only part of the less than favorable characteristics of west Texas wind. It is mostly available at the higher wind velocities during the night time hours, between 9PM and 7AM the following morning. This is not when Texas needs the electrical power. This shortage becomes even more acute during the hot summer afternoons when Texas is using maximum electrical power, and we can expect to receive less than 10% of the Wind Energy output.

At this time, because of the limited number of transmission lines, there is significant power congestion in west Texas. Even the power that is available is difficult or in some cases, impossible to deliver to the major cities or load centers in any quantity.

Now we will examine how Wind Energy is sold to the grid through ERCOT. Because of the large amount of Wind Energy available late at night we will look at a typical power transaction during this time frame. Assume a certain Wind Energy generator sells a contract to TXU in Dallas for 6 cents/KWH or $ 60/MWH and he wants to deliver the power. With the excessive available power during the night the ERCOT price will be bid very low --- lets use a typical number of minus $28/MWH. Our particular Wind Energy generator will out bid the going price --- a bid of minus $30/MWH to set the ERCOT price. At this price ERCOT will buy all the power require at this time. Even at minus $30/MWH our Wind Energy generator can still make money:

$5/MWH ( Green Fee )
$60/MWH ( TXU )
(-) $30/MWH ( Bid price )
#35/MWH ( income or 3.5 cents/KWH )

It is suggested that the ERCOT web site be checked. Look under “ Balancing Energy Service Daily Reports” and review the west Texas prices at night to see why the excessive amount of available power drives the prices down during various hours at night.

ERCOT Challenge

Earlier this year, at the PUC’s request, ERCOT provided four options on possible transmission lines to relieve the west Texas power congestion. The PUC selected the option to build enough transmission lines to import a total of 18,456MW’s from west Texas, at an estimated cost of $5Billion. This could represent up to fifty separate lines to be built by entities such as CPS Energy, LCRA, City of Garland, STEC, ONCOR, etc.

The going estimate for completion of these lines is in excess of 5 years. When completed each electric user in ERCOT will be charged a monthly fee of about $5 to cover the construction costs, plus each will also pay a transmission line use fee for the power delivered.

ERCOT has appeared before the PUC and has agreed to the interconnection requirements ( 18,456 MW’s ) but was non committal on how much power it could agree to take and back-up.

ERCOT had a study completed that indicated that the maximum the current system could handle and back-up was 15,000MW’s, and this was predicated on a 30 minute response time with 9000MW’s available ( immediate back-up ). The main problem today is that ERCOT only has 3000MW’s of simple cycle gas turbines capable of a 30 minute response. Combined cycle units, even when warm need about 1-1/2 hours to come on line and older steam turbines could take as long a 6 hours to respond. Basically the more Wind Energy used the more hot spinning reserves needed as emergency back-up at a current cost of $5-$10/MWH. This will be passed on through ERCOT’s fee.

Finally, has anyone wondered why all the Wind Energy Developers want to come to Texas and hook up to ERCOT. The Southwest Power Pool ( SPP ) actually serves the Texas panhandle and ERCOT does not. SPP is in turn connected to roughly 600,000MW’s of load while ERCOT, being a closed system, has approximately 60,000MW’s. The reason why they all select ERCOT is that the Texas PUC requires that the end user of the power pays the transmission fee, while SPP requires that the electrical generator pay the transmission fee. Its all about money.

Lets move forward and have our PEC staff work with LCRA’s extensive staff resources and knowledge to implement our Renewable Energy Program goals and provide us with Wind Energy Solutions.

Thank you for your indulgence,

James Spellman AD District 5

P.S. I don't know Montana wind!!