Title
Resolution - Approval of Delegation of Authority to Chief Executive Officer to Implement Measures in Response to COVID-19 - J. Parsley
Other Info
Submitted By: Chief Executive Officer
Department: CEO
Financial Impact and Cost/Benefit Considerations: As Discussed in Executive Session
Discussion
On Friday, March 13, 2020, the Governor of the State of Texas (“Governor Abbott”) declared a state of disaster for all counties in Texas due to COVID-19. On that same day, the President of the United States (“President Trump”) proclaimed that the COVID-19 outbreak in the United States constituted a national emergency, beginning March 1, 2020. On Monday, March 16, 2020, the Cooperative activated its Emergency Operations Plan (“EOP”) at the (P) Pre-Emergency Preparation level which indicates that news and/or forecasts of significant hazardous conditions or events that have a reasonable probability of impacting service and/or operations of the Cooperative. On March 19, Governor Abbott mandated certain obligations for Texans in accordance with President Trump’s Coronavirus Guidelines for America (“Guidelines”), as promulgated by President Trump and the Centers for Disease Control and Prevention (“CDC”) on March 16, 2020, which called upon Americans to take actions to reduce the spread of COVID-19. On March 25, 2020 President Trump issued a Major Disaster Declaration for the State of Texas. On March 29, 2020, President Trump announced that the restrictive social-distancing Guidelines should extend through April 30, 2020, and on March 31, 2020, Governor Abbott ordered on a statewide basis continuing through April 30, 2020, subject to extension based on the status of COVID-19 in Texas and the recommendations of the CDC and the White House Coronavirus Task Force, that every person in Texas minimize social gatherings and minimize in-person contact with people who are not in the same household, except where necessary to provide or obtain essential services (“Statewide Order”).
The Board’s Authority and Responsibilities Policy delegates certain actions to the Chief Executive Officer (“CEO”). The Board wishes to further delegate its responsive actions to the COVID-19 pandemic to the CEO in order to efficiently and quickly address needs in this timeframe within the parameters given by the Board. While these measures are in place, the CEO shall provide updates to the Board on each of these measures as necessary and during the regularly scheduled monthly meetings, and revisions to these measures will be considered as necessary.
These measures include:
• Temporary Waivers to Tariff and Business Rules;
• Temporary Modification to Community Support Policies - Member Assistance Programs (“MAP”);
• Delay in Implementation of Water Well Rate Schedule;
• Establishing Account(s) or Fund(s) for Donations and Employee Payroll Deductions; and
• Reallocate Distribution of Unclaimed Property Funds and Request for Legislative Assistance as to State Law Regarding Use of Cooperative Unclaimed Property.
Temporary Waivers to Tariff and Business Rules
The Cooperative’s current Tariff and Business Rules Section 300.5 permits the CEO to waive, suspend, or modify any credit or deposit requirement, the establishment fee, same day service fee, and reconnection fee for a limited duration to address the circumstances of any natural disasters or declared emergencies and update the Board of any action taken.
The Cooperative previously instituted various waivers of certain fees following the Spicewood Fires in 2011, the Onion Creek Flood in 2013, and the Wimberley Flood in 2015. The Cooperative wishes to temporarily waive certain fees under its Tariff and Business Rules.
The Cooperative would waive, for all members in all classes, late fees, collection fees, same day service fees, deposits and such other fees as may be determined by the CEO and would suspend certain discontinuation of service for non-payment rules within the Tariff and Business Rules for a period through 60 days following when the Statewide Order is entirely lifted.
The Cooperative would also waive, for members upon request certain deposit refund requirements in Section 300.7.8 of the Tariff and Business Rules, so that deposits currently held by the Cooperative on behalf of the requesting member, may be used to offset past, current, and future bill amounts.
The Cooperative would also adjust the terms of Installment Plans allowed in Section 300.11.3.2 of the Tariff and Business Rules and other payment arrangements in Section 300.11 for requesting members to temporarily suspend down-payment requirements and extend the maximum number of months in the payback period to 12 months for Residential members and 24 months for Small Power members, as necessary.
The Cooperative would also waive for any temporary medical facilities, testing sites, and any other essential services in response to COVID-19 for the health and wellbeing of the membership, the public and employees, deposits, line extension fees, and such other fees in Section 400 Line Extension Policy of the Tariff and Business Rules, as may be determined by the CEO for the period during which the Statewide Order is in place.
Temporary Modifications to Community Support Policies (Member Assistance Programs (“MAP”)
The Cooperative offers the Member Assistance Programs - Payment Assistance Program to members that qualify under its Community Support - Member Assistance Programs Policy. The Cooperative wishes to temporarily modify certain criteria for eligibility required under the Policy as noted below, for a period covering 60 days following when the Statewide Order is entirely lifted:
• Under the Payment Assistance Program, remove the eligibility requirement of having no returned checks for those who are financially impacted by COVID-19 because given the current situation, some members may now have experienced this for the first time.
Delay in Implementation of Water Well Rate Schedule
On February 21, 2020 the Board of Directors approved amendments to the Tariff and Business Rules to implement portions of its 2020 Rate Plan. The Cooperative wishes to delay the transition of members on the Water Well Rate schedule to the Residential, Farm, and Ranch Service Rate schedule from June 1, 2020 to November 1, 2020 to ensure that the Cooperative can provide education and outreach to all affected members.
Establishing Account(s) or Fund(s) for Donations and Employee Payroll Deductions
The Cooperative wishes to establish a bank account or fund where members, employees, or others may by ACH or wire transfer donate to assist residential members with payment of electric bills. As soon as practical and after appropriate system testing, the Cooperative would establish a method for payroll deductions from employees who choose to participate and establish a method to accept donations electronically from members. Funds donated by employees and members would be distributed to residential members through the MAP.
Reallocate Distribution of Unclaimed Property Funds and Request for Legislative Assistance as to State Law Regarding Use of Cooperative Unclaimed Property
The State of Texas returns unclaimed property funds to the Cooperative under Texas Property Code, Chapter 74. The Cooperative may only use those funds for certain designated uses, including for its rural economic development program, energy efficiency program, and scholarship program, and funds used for rural economic development are capped at 20%. In 2019, the Cooperative transferred approximately $147,000 from the economic development program to the energy efficiency program for use in 2020. The Cooperative wishes to transfer those funds back to the purpose of stimulation and improvement of business and commercial activity for economic development in rural communities, and establish a temporary program to assist businesses negatively impacted by COVID-19, with eligibility and criteria determined by the CEO. The energy efficiency program, consisting predominantly of HVAC rebates, would be temporarily suspended and there would be no budget impact due to the reallocation of these funds.
In addition, the Cooperative may assist the statewide cooperative association in pursuing legislative assistance that would allow a waiver as to those restrictions on current funds in order to further assist the membership and the Cooperative. If PEC can utilize additional unclaimed funds for rural economic development, the additional funds available would be approximately $25,000.
Body
NOW, THEREFORE, BE IT RESOLVED BY THE BOARD OF DIRECTORS OF PEDERNALES ELECTRIC COOPERATIVE, INC. that given the Texas disaster declaration across its service territory, the federal declaration of a national emergency and the major disaster declaration, and the activation of the Cooperative’s Emergency Operations Plan, the Cooperative delegates authority to the Chief Executive Officer to implement such measures as described herein in her reasonable discretion in response to COVID-19, subject to consideration of the financial health of the Cooperative;
BE IT FURTHER RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that all actions taken prior to the effective date hereof in connection with the subject of the foregoing resolution, be and are hereby ratified, confirmed, and approved; and
BE IT FURTHER RESOLVED BY THE BOARD OF DIRECTORS OF THE COOPERATIVE, that the Chief Executive Officer, or designee, is authorized to take such actions as needed to implement this resolution.