Jemez Mountain Electric Cooperative’s Board of Directors hand-picked Co-op Finance Director Ernesto Gonzales as the Co-op’s new general manager without interviewing any other candidates, Gonzales and directors said.
Gonzales was appointed Jan. 1, replacing Jerry Mascareñas, who served as general manager for four years before being asked to resign by the Board in November. Directors still refuse to explain why Mascaerñas was asked to leave the Co-op.
Gonzales said the Co-op — which serves 30,000 customers in five Northern New Mexico counties including Rio Arriba — is set to grow in 2009 and that he will work to get the Co-op more involved in renewable energy.
“The Board of Directors asked me to serve in November,” Gonzales said. Asked whether he was the only candidate considered to replace Mascareñas, he said, “As far as I know, I was the only one.”
Gonzales said he did not know why Mascareñas had resigned. Gonzales said his salary would be “in the same range” as the $108,000 paid to Mascareñas, but otherwise would not reveal his salary.
Co-op directors were similarly tight-lipped about Mascareñas’ departure.
Director Robert Martinez said Gonzales was the only candidate considered to replace Mascareñas, but did not know what salary Gonzales will be paid and would not reveal why Mascareñas had left the Co-op.
“All I can tell you is Ernesto took over,” Martinez said. “I can’t say anything about Mascareñas.”
Mascareñas clashed with the Board in July, when he was suspended for three days over two purchases totaling $34 his assistant made. He said she mistakenly used the Co-op’s credit card for personal items and paid the Co-op back as soon as she realized what she did. Mascareñas gave her a written reprimand, but the Board decided he did not go far enough and suspended him.
He was brought on as “interim” general manager after the Board terminated Milo Chavez in a similar manner at the end of 2004. Chavez had served in the position for six years, and the decision to ask Chavez to leave was also made in closed executive session. Martinez said the Board sometimes acts on personnel issues in closed session to protect employees’ privacy.
Director Manuel Garcia was similarly circumspect about Mascareñas’ departure, refusing even to comment on whether or not the Directors had asked Mascareñas to resign. But Garcia was enthusiastic about the decision to appoint Gonzales as the new General Manager.
“He’s very well qualified,” Garcia said of Gonzales. “He served as general manager at another co-op and has 34 years of experience.”
Calls to five other Co-op directors were not returned Tuesday.
Rate Increase
Gonzales will be responsible for ensuring that the Co-op is in compliance with state Public Regulation Commission rules and federal Rural Electric Service rules, in addition to overseeing audits and the day to day operations of all of the Co-op’s departments, he said.
“We have monthly staff meetings and each week I have to look at the finances, kilowatt hours sold, purchases, cash flow and so on. I will review summary data daily. It’s not a 40 hour week. Sometimes it’s much more,” he said.
He is also helping complete the Co-op’s 2008 year-end financial reports. Rosabella Romero, who has worked at the Jemez Co-op for nine years, has replaced Gonzales as the Co-op’s finance director.
Gonzales has 34 years of experience working for electrical cooperatives. Prior to joining the Jemez Co-op, he worked at the Kit Carson Electric Cooperative for 20 years and as the manager at the Mora Electric Cooperative for 11 years. He said he also served in the Marine Corps and graduated from New Mexico Highlands University with a bachelor’s in business and economics in 1971.
“Then I came here (to Jemez) in March 2005 as finance director,” he said.
Despite a slumping economy, the Co-op saw 108 new customers between January and November 2008, Gonzales said — and he expects more growth in 2009.
Gonzales said the Co-op grid will also see a major addition in 2009. The Co-op is constructing a 21-mile line extenstion along with a new substation that will power a new Kinder Morgan Energy Partners carbon dioxide pipeline pumping station near Blanco Canyon, which is approximately 25 miles south of Bloomfield.
The Blanco Canyon project will cost $7 million, Co-op Cuba Office Director Elmer Morales told the SUN in April 2007. But Houston-based Kinder Morgan will pay 80 percent of that cost. Gonzales said the other 20 percent the Co-op will pay — which comes to $1.4 million — is justified.
“The steady, 24-hour a day and good-sized load (from the pumping station) will help all our consumers,” Gonzales said, because Tri-State bills the Co-op based not only on demand but also on load “efficiency” — a measure of how steady power demand is throughout the day.
Tri-State raised the Co-op’s wholesale electricity rates by 4.1 percent this month, a rate increase consumers will see in their February bills. This is the third consecutive year that Tri-State has increased rates on the Co-op, citing increasing coal fuel costs (see sidebar).
“Co-ops can protest rate increases to the PRC,” Kit Carson Co-op Board Member Arthur Rodarte said. “When I was in the Senate, I sponsored a law that passed, that said if three co-ops protest a rate increase, that brings the PRC into it and challenge the increase.”
But so far, Rodarte said, Kit Carson has been the only co-op to consistently protest Tri-State’s rate increases.
“Kit Carson has protested every time,” Rodarte explained. “Last year, the Central Co-op in Moriarty protested (increases planned for 2009) with us. But that was only two co-ops.”
Rodarte sits on the Tri-State board as a Kit Carson representative, he noted, and always votes against rate increases there as well.
“It doesn’t make me very popular up there,” he laughed.
Jemez has never protested a Tri-State increase, but Gonzales said there are good reasons for that,
“If Tri-State doesn’t do certain things, rates may ultimately become higher for consumers,” Gonzales said.
Challenging rate increases could backfire on consumers driving service costs up even more in the end, he said.
“Say, for example, that Tri-State needs a rate increase now in order to get a billion-dollar loan,” Gonzales said. “If the co-ops fought that increase, bond rating agencies would see Tri-State as a riskier investment, and knock down their bond rating. Increased risk would mean that investors would demand higher interest rates for loans.”
“Co-ops are part owners of Tri-State,” Gonzales said. “So I can’t say across the board that we will challenge rate increases. We need to examine each and every proposed rate increase separately, and allow Tri-State to explain and justify increases.”