The dysfunction continues.

Even with two new trustees, the bankrupt Southern Montana Electric power co-op could not elect officers at its annual meeting on Monday. No one was even nominated.

Southern's court-appointed trustee, Lee Freeman, an attorney from Livingston, was unfazed by Southern's governing stalemate, telling the board that he is working on a reorganization plan for the benefit of everyone, including creditors, and will be seeking each member's thoughts.

The meeting, held in a conference room at the Big Horn Resort, a motel near the Shiloh interchange, drew more than 25 co-op representatives and bankruptcy attorneys. The meeting was the board's second since filing for bankruptcy in October, when it declared a cash flow crisis and listed more than $21 million in red ink.

The 45-minute session lurched in fits and starts when trustees questioned the bylaws and had no board attorney to offer advice. The session ground to an end when no officers were elected.

Two trustees from the Yellowstone Valley Electric Cooperative, based in Huntley, and from Electric City Power, the utility arm of the city of Great Falls, said they would vote no on everything and thought the troubled wholesale power supplier should dissolve.

A third trustee, representing Beartooth Electric Cooperative, based in Red Lodge, said she would vote against any officers because she was unable to evaluate qualifications of any candidate.

That left the three remaining co-op trustees from Mid-Yellowstone, in Hysham; Tongue River, in Ashland; and Fergus, in Lewistown, with not enough votes for a majority.

Dee Dee Isaacs, Tongue River's new trustee for Southern Montana Electric Generation and Transmission Cooperative, wasn't ready to throw in the towel.

"I, for one, am not ready to give up on Southern," she said. Southern had come too far and spent too much money to stop, Isaacs said.

Mid-Yellowstone's new trustee, Jim DeCock, said he had doubts about Southern's Highwood Generating Station, a new $85 million gas-fired power plant outside Great Falls, but thought Southern should stay together through bankruptcy.

But Dave Kelsey, Yellowstone Valley's trustee, said his co-op believed it was no longer in its members' interests to remain with Billings-based Southern and that the wholesaler should be dissolved.

"We just want to be able to go our own way," he said.

"We also agree wholeheartedly," said Bob Jones, Great Falls' representative and city commissioner. "We've lost millions of dollars and we're not willing to lose anymore," Jones said.

Attorney Gary Ryder, who represents Mid-Yellowstone, said he and Tongue River's attorney had anticipated that the annual meeting would have some organizational awkwardness and had proposed as a compromise having Southern's initial trustee, Billings attorney Malcolm Goodrich, run the annual meeting. Goodrich ran Southern's first meeting after the bankruptcy in the wake of trustee turmoil and the abrupt retirement of Southern's general manager.

"Nobody really knew who was in charge" heading into the annual meeting, Ryder said. But Yellowstone Valley declined the offer, he said.

Freeman, the bankruptcy trustee, is in charge of Southern's operations and has been negotiating with creditors and energy providers, building up cash and meeting with members.

The board members "are making these statements in a vacuum," said John Parks, a Denver attorney who represents Freeman. The trustee is about to file with the court an agreement to terminate Southern's contract with PPL, its primary electricity provider, he said.

"That's a tremendous benefit to the co-op," Parks said. Under the PPL contract, Southern was buying too much power at expensive rates, he said.

The trustee believes the reorganization will allow Southern to be back in a position to provide its customers with low-cost power, he said.

 

 

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