OPALCOGRAM 118
6/22/94
|
|
Doug Bechtel
|
|
Remember the phrase, “I’m from Washington (D.C.), and I’m here to
help you”? It was always good for a laugh. The new administrator
of the Rural Electrification Administration, Wally Beyer, is a breath
of fresh air.
No matter what you think of the job President Clinton has done,
he did OPALCO and all the other rural cooperatives a great favor
when he appointed Wally. For the first time, the administrator of
the rural electric program is an electric cooperative manager (from
North Dakota). Wally becomes administrator at a critical time. Over
the past 20 years, REA staffing has been reduced from 722 to 509.
The Department of Agriculture (which contains the REA) has recently
announced a major reorganization which will result in further personnel
cuts. The REA has been around for almost 60 years, and some of the
regulations haven’t been updated for 30 or 40 years. For example,
OPALCO is required to obtain REA approval for any purchase or contract
exceeding $25,000. Approvals routinely take six months to a year.
We do obtain REA approval on our major projects (substations and
submarine cables), but our construction program would grind to a
halt if we had to wait for REA approvals for every job costing more
than $25,000.
The REA admits it is seven to ten years behind the state of the
art in line construction material approvals. This is particularly
crucial in underground construction where significant progress in
reliability and quality has been made in recent years. OPALCO changed
to the “new, improved” underground wire several years before the
REA authorized use of it.
In spite of all the REA rules and regulation (four feet of shelf
space here at OPALCO), cooperatives continue to get into financial
trouble. Wally’s complaint is that the REA never becomes aware of
a potential problem until it reaches the crisis stage.
To give the REA time to identify and help “troubled borrowers” before
the crisis stage, Beyer has proposed the most sweeping changes to
the rules and regulations I have seen in the sixteen years I have
been managing co-ops. He has proposed increasing the amount of money
we can spend without their approval by ten times (to $250,000).
He proposed lifting many other regulations that take time but don’t
help keep a co-op out of trouble. Instead, the REA will work with
other national cooperative organizations to identify “pre-troubled
borrowers”, to try to find those who are headed towards trouble
and try to help them before it becomes a crisis. Sounds good - we
need to see if it will really work.
One of our national electric cooperative organizations has formed
a committee of engineers to review and update the REA construction
standards and list of approved materials. Over 70 cooperatives around
the country have loaned engineers to the project. I have seen some
of the work this committee has done (OPALCO is not on the committee),
and it is really good. The problem is that the REA has not taken
any stance on the proposals of this committee. The REA Standards
Branch, which is responsible for their review, is down to eight
engineers from a high of nearly thirty two decades ago. Three of
the eight have announced their retirement within the next year.
No one is really sure just what the REA will do about this. It is
possible that the REA may just rubber stamp the proposals of the
engineering committee or get out of the standards business altogether.
Time will tell.
In the meantime, I am waiting for Wally Beyer to get up in front
of a group and tell us he is from Washington and is here to help
us and not get a laugh.
Doug Bechtel
|
|