The bankrupt Southern Montana Electric Generation and Transmission Cooperative will have two new board trustees when it gathers for its annual meeting next Monday in Billings.

The Hysham-based Mid-Yellowstone rural cooperative last Wednesday voted 4-3 to replace Bill FitzGerald, who has been Southern's president since its creation in 2003, with Jim DeCock, a Hysham-area farmer.

The Tongue River co-op, based in Ashland, voted unanimously in January to send board trustee DeeDee Isaacs, of Ashland, as its Southern representative instead of Gerhard Helm.

The trustee changes come as Southern works to reorganize more than $21 million in red ink since filing for bankruptcy in October. The board is expected to approve minutes and elect officers at its annual meeting.

The board has not met since November, when it rescinded a controversial 20 percent rate increase on its member co-ops and seated Arleen Boyd, a board member from the Beartooth Electric co-op, after having initially refused her a seat and prompting a walkout by half of the board. Beartooth is based in Red Lodge.

Southern is a wholesale cooperative that provides electricity primarily to its members, which include five rural co-ops and the city of Great Falls. The other member co-ops include Yellowstone Valley Electric, based in Huntley, and Fergus Electric, based in Lewistown. Southern also built the $85 million Highwood Generating Station, a 40-megawatt natural-gas fired plant outside of Great Falls.

Since bankruptcy, Southern's operations have been in the hands of a court-appointed trustee, attorney Lee Freeman of Livingston. Freeman has been working with his Denver attorney, John Parks, to stabilize Southern's finances and to begin the process of developing a restructuring plan with its numerous creditors.

Whether new Southern trustees will enable a previously dysfunctional board to work effectively is unknown. By the time Southern filed for bankruptcy, the board was equally divided with Mid-Yellowstone, Tongue River and Fergus on one side and Great Falls, Yellowstone Valley and Beartooth on the other side of major issues.

DeCock, a Mid-Yellowstone board member for 35 years, said he thought the board voted for him to try to end some of the turmoil among Southern's board members. The co-op board members "just felt like maybe they needed a change," he said.

"I get along fine with (Dave) Kelsey and Beartooth and everybody pretty much," DeCock said. Kelsey is Yellowstone Valley's representative and has been an outspoken critic of Southern and its management.

DeCock, who has attended Southern meetings, said he would like Southern to have more discussion of issues before voting.

Isaacs, who also has attended Southern meetings, said Helm decided that it was time "to slow down just a little bit." Like FitzGerald, Helm had been on the Southern board since its beginning.

"We felt Gary has been doing a wonderful job. I can only hope to follow in the footsteps he's left," she said.

Tongue River, Isaacs said, has the same goal of trying to restructure Southern and start over.

Boyd said she will continue as Beartooth representative on Southern.

"There are a lot of questions to be answered about the role of this board during bankruptcy. The annual meeting may be an opportunity to better understand that," she said.

Meanwhile, Great Falls officials are questioning the legal fees of Southern's trustee. Great Falls City Attorney James Santoro said Freeman can be paid $75,000 a month and Freeman's attorney up to $125,000 a month.

Parks recently submitted a bill for $204,388 for two months' work.

Santoro told the Great Falls Tribune, "Montanans aren't used to legal fees like this."

Parks denied that the fees are excessive. 

 

 

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