consultants are sandburs

Friday, January 17, 2014

CONNEXUS - Second biggest retail electricity seller in Minnesota, and NOT regulated by the Public Utility Commission (PUC) as to rates and practices. They hold tremendous control (local monopoly) over ratepayer households and businesses while not answerable to regulatory control. Should that change?

THIS LATEST SIDEBAR POLL HAS CLOSED. 

RESULTS WERE INCONCLUSIVE. TOO FEW RESPONSES; EVENLY SPLIT. CURRENTLY, A PETITION TO PLACE CONEXUS UNDER PUC REGULATION WAS NOT STRONGLY SUPPORTED. CONNEXUS RATES WERE NOT DECISIVELY BELIEVED TO BE OUT OF LINE WITH RATEPAYER EXPECTATION. WITH THE POLL CLOSED, POLL QUESTIONS HAVE BEEN REMOVED.
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A reader called the situation to my attention, and proposed a sidebar poll.

Living in their billing/service area, it appeared a simple Google would be a start to finding online information. Try it. There is a reader rating option, with seven Google reviews, Connexus getting 1.8 stars out of 5, 5 being excellent. There is one outlier apart from the rest, giving Connexus 4 stars. Typical:



With that as a starting expression of ratepayer mood, the most recent annual report and most recent financial statement, such as they are, are online.

From that financial statement, p.14, there is this:



A rapidly growing million dollar and more pool of ratepayer cash set aside in investments to benefit "deferred compensation for certain employees," with no detail beyond that provided as to who and how much for each, raises a question since line repairmen likely are not the beneficiaries.

And this firm is big. Not as big as XCEL, but the biggest unregulated power cooperative in Minnesota. XCEL is answerable to the PUC's purview in the public interest, given that its ratepayers don't have time to anguish over the details of the firm, how it is run, how it prices its electricity, all that. Connexus in turn is not answerable to the PUC, despite its ratepayers not having time to anguish over the details of the firm, how it is run, or how it prices what it's selling.

There is that imbalance where each of these two massive natural monopoly [single supplier] situations differ little in terms of the size and unequal bargaining power of the firm vs. the individual household paying the price the firm sets. One regulated, one free to set its own course outside of PUC supervision.

From the latest financial statement of Connexus,



The firm takes in roughly a quarter of a billion dollars a year, ten percent of which goes to a block (aggregate) item, "Labor and Related Expenses." There is no breakdown between executive/board compensation, and ordinary labor. Only an aggregate.

The company's most recent annual report, at p.7, highlights its customers are predominantly households and small businesses, i.e., entities not practically fit to question rate setting, executive compensation, or other operating detail of the cooperative that sells them electricity.



Two final images, from the most recent annual report, the CEO and BOARD CHAIRMAN, and then the board, [red captioning added].



SIDEBAR POLL: Given that ratepayers cannot practically oversee and constrain the practices of Connexus, a petition process exists whereby Connexus could be placed under PUC supervision, unlike the situation at present (PUC hands off).

The new sidebar poll relates to this possibility, and is intended to solicit reader thoughts of the relative wisdom or folly of putting Connexus under the PUC microscope to do the policing for which individual ratepayers have neither the time nor skill nor experience to do in their own behalf.

Surely, reading the entire annual report indicates that management and the board solicit the trust of ratepayers in their actions and veracity, that is the status quo, trust them.

While trust is always important in any ongoing purchase-sale contractual relationship, the question is, beyond trust, is there something more that might prove helpful.

__________UPDATE__________
Besides the Crabgrass sidebar poll, readers are urged to post a review per that google link given at the start of the post. Things there will be seen by far more people than anything here, and if people tell friends to take the time to comment it could snowball into a helpful, informative thing. Last, any reader having problems accessing the poll, for any reason and in any way, is urged to leave a comment or send an email (at the address given on the sidebar below the poll questions).

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