Cap Rock Utility Co. questioned by group

A large group of rural customers has filed a challenge at the Public Utility Commission (PUC) of Texas against Cap Rock Electric Cooperative, Inc. with regard to the financial status of the utility. The customer group, intervening in the Utility Commission proceeding, is St. Lawrence Cotton Grower’s Association, an organization of rural customers of Cap Rock Electric located in Glasscock County, southeast of Midland. However, the group includes other customers of Cap Rock Electric who express concerns over the high rates, yet weakened financial condition of the company, and expected additional rate increases. Cap Rock provides retail electric utility service to several rural communities across the state. It is headquartered in Midland, where it serves primarily rural areas in and around Midland. Cap Rock also provides service pursuant to previous merges in and around Brady and Central Texas. Cap Rock presently has a proceeding pending before the PUC, seeking to transfer its state-issued certificate to an affiliated corporation. However, the intervening customer group at the Commission has requested the PUC deny Cap Rock’s request. “At the present time Cap Rock has substantial debt and some of the highest retail rates of any utility in the state, especially for a cooperative,” said Harold Hoelscher, with the St. Lawrence group. “We certainly believe rates could be lower, debt should be lower and the company and customers would be much better off financially if it remained as a cooperative rather than transferring its certificate to an investor-owned cooperation.” Cap Rock’s Board of Directors has already voted for one major rate increase of at least 12 percent this year, and more rate increases have been hinted at in the near future. According to a representative of the McCulloch Division of Cap Rock, a local increase won’t be considered for the next three years due to a previous contract. The consumer group has raised numerous questions about the other financial affairs of Cap Rock Electric, including its heavy debt and severe cash flow problems. According to a press release issued by a law firm representing the St. Lawrence group, the consumers raised numerous other factual issues involving the fact that Cap Rock has lost almost $10 million the last two years, primarily from questionable investments; however, the company has paid larger than average salaries and bonuses to management in spite of its financial performance. The press release also states that the Board of Directors also has awarded itself financial benefits despite the company’s poor financial performance. While Cap Rock has its headquarter offices in Midland, it also had division offices in Stanton, Brady, Colorado City and Celeste. The utility provides service to more than 33,000 meters in counties of Andrews, Borden, Brown, Coleman, Collin, Concho, Dawson, Ector, Fannin, Fisher, Glasscock, Howard, Hunt, Irion, Martin, Mason, McCulloch, Menard, Midland, Mills, Mitchell, Nolan, Reagan, San Saba, Scurry, Sterling, Tom Green and Upton.

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