Investigation and Audit of CLC and CVEC

Over the past several months, members of the public have raised significant questions regarding the past actions, and future intentions, of both the Cape Light Compact (CLC) and the Cape and Vineyard Electric Cooperative (CVEC).

CLC AND CVEC

CLC is a "municipal aggregator" and consumer advocate that aggregates electricity demand on behalf of approximately 200,000 consumers on Cape Cod and negotiates with third parties to buy electricity for consumers at competitive rates.

CLC is prohibited by law from producing electricity, but is a founding member of CVEC.

The Cape and Vineyards Electric Cooperative (CVEC) is a municipal electrical cooperative founded in September 2007 to develop renewable energy production facilities, including wind energy. CVEC's website states that its goal is "to develop a 20 to 30 turbine wind farm" on the Cape and Vineyard over the next 5 to 10 years.

The members of CVEC, other than CLC and Barnstable County, are all municipalities located on Cape Cod and Martha's Vineyard.

CLC collects money from consumers in the form of various surcharges to their bills ("mil add" charges and "energy efficiency" surcharges) and has significant assets.

CVEC collects minimal dues from its municipal members -- only $25 per year, per member -- and has almost no assets.

Because CVEC has completed very few installations of any consequence, CVEC has historically run -- and continues to run -- very large deficits on an operating basis.

From its inception in late 2007, through 2009, CVEC appears to have received payments totaling $520,000 from an electricity provider named Con Edison Solutions -- the same entity from which CLC buys electrical power for its consumer members. It is unclear how CVEC could have earned this money, since CVEC was not in a position to provide any services to Con Edison.

Management of CVEC has declined to answer any questions regarding the nature of CVEC's relationship with Con Edison Solutions or the justification for these payments.

From July 2009 through March 2011, CVEC appears to have received a total of $1,337,000 in cash from CLC through three separate "grants":

1) $500,000 in July 2009
2) $500,000 in July 2010
3) $337,000 in March 2011.

Without these cash infusions from CLC, it appears that CVEC would have been insolvent.

CVEC has never disclosed any of these transactions publicly and declines to answer any questions about them.

CLC did not publicly disclose the most recent of these transactions and, like CVEC, declines to answer any questions about them.

Members of the public have questioned these substantial transfers of assets from CLC to CVEC on a number of grounds, including the fact that they confer no apparent benefit on CLC consumers and they do not seem to be consistent with the provisions of CLC's charter.

CVEC APPEAL TO DPU ON "BREWSTER WIND PROJECT"

CVEC has pursued a series of wind energy proposals on Cape Cod since its inception, none of which have succeeded.

Most recently, CVEC's special permit application to build two 410-foot wind turbines in Brewster, MA was denied by the Brewster Planning Board, in accordance with due process, after extensive public hearings and review.

CVEC supported a subsequent effort by the Brewster Board of Selectmen to change the Brewster zoning bylaws to enable the Selectmen to approve the project "by right" -- that is, without the approval of the Brewster Planning Board and without any public Special Permit process. The effort failed.

The Board of Directors of CVEC approved a Board resolution on March 17th to appeal to the MA Department of Public Utilities to exempt the Brewster Wind Project from Brewster's zoning bylaws and, presumably, from the regulations of Barnstable County, as well.

If this action succeeded, it would enable CVEC to build the project in defiance of the Brewster Planning Board and, possibly, without having to comply with the permitting regulations in the Regional Policy Plan of Barnstable County.

CVEC has stated its intention to pursue such an extraordinary appeal to DPU despite the knowledge that the Cape Cod Commission (CCC), the Barnstable County Assembly of Delegates and the Barnstable County Commissioners have all recently adopted and approved new regional regulations that would require review of the project by the Cape Cod Commission as a Development of Regional Impact, under normal circumstances, if the project were appropriately referred to the CCC.

The CVEC Executive Committee has also publicly stated to the Cape Cod Commission that it believes that individual towns, and CVEC, should be allowed to build "community wind energy projects" -- such as the one in Brewster -- without any review by the CCC.

CVEC's aggressive legal strategy with respect to the Brewster Wind Project has raised questions among members of the public as to how CVEC can justify its actions as being in the best interests of the residents of Brewster or Barnstable County.

Members of the public have decried the fact that even though both CLC and CVEC are public entities which are regarded as extensions of the Barnstable County government, they are both intensely secretive and opaque.

CLC and CVEC have both declined to disclose substantive, and basic, public information, such as audited financial statements, and they have been hostile and uncooperative to inquiry from members of the public.

Members of the public have also noted that the current overlapping management structures of Barnstable County government, CLC and CVEC have embedded in them many serious conflicts of interest which should be eliminated and resolved -- particularly since it seems evident that some management members have abused their authority in order to obstruct legitimate inquiry.

For all of these reasons, members of the public now turn to their elected representatives in Barnstable County -- the County Commissioners and the Assembly of Delegates -- to insist that they perform their statutory function of overseeing these entities in a responsible manner and effecting all necessary reforms.