Anchorage Daily News

WASILLA -- The tide has turned in a civil war at Matanuska Electric Association, one of the largest employers in the Matanuska-Susitna Borough.

The sea change, years in the making, was effected in July when a newly elected board member was seated, giving management opponents a voting majority for the first time in more than a decade. The new majority, led by board members who say current managers run the business in a way that is outdated, adversarial and excludes its owners, has been asserting its role as company leader.

In the last month alone, the board has cut a year off the general manager's contract, hired its own attorney for advice instead of relying on direction from a company lawyer, and told company managers to keep out of board business.

The shift is drawing applause from company critics who say the change comes at a crucial time in the company's future planning. Past board members are crying foul, however, and say the new board is on a path to certain failure and breaking company rules along the way by, for example, holding meetings with little public notice.

For Palmer-based utility cooperative Matanuska Electric Association, the tumult isn't new. But the stakes -- the future power source for 43,000 member-owners strung between Eagle River and Denali State Park -- are higher than ever. The deal under which the company buys electricity to power its customers' big-screen TVs and refrigerators is set to expire in a few years, and plans for what to do next are up in the air.

"We've got some very strategic moves to make and it's not a time for high-level dysfunction between the management and the board," said board member Larry DeVilbiss.

ENFLAMED OVER COAL

Matanuska Electric Association, founded in 1941, is the state's oldest and second-largest utility cooperative. It generated $86.9 million in operating revenue and $2.8 million in profit last year according to unaudited numbers and employs about 120 people.

MEA currently buys most of the power it delivers to its customers from Chugach Electric Association through a contract that expires in 2014. In anticipation of that date, the cooperative in 2006 embarked on plans to make its own electricity by building two power plants, one fueled by coal and one by natural gas, by 2015.

Some MEA members, and even nonmembers, seized on the idea of a 100-megawatt coal-power plant and began organizing opposition. They formed a group, MEA Ratepayers Alliance, and invited experts to speak about the indirect costs of new coal plants and how they harm the environment.

"There were huge concerns around the impacts of a coal plant in the community or somewhere nearby," said Tim Leach, the Ratepayers' president.

Through 2007, opposition to the coal plant grew, as did general distrust of how the board and managers operated. Utility leaders didn't help matters by refusing to release a consultant's report they said justified its new power plants. They also took heat for not soliciting members' input on the company's energy plans.

Members wanted more say in future power sources and instead got to vote only on where the new coal plant should be built and whether they favored making power locally or buying power from Chugach Electric.

The coal plant was finally shelved last December. But the distrust over how the issue was handled had enflamed and mobilized critics, who weren't ready to stop when coal was no longer on the table.

A POWER SHIFT

Palmer inn owner and former Mat-Su Assemblywoman Janet Kincaid rode that wave of frustration and got elected to the MEA board last March. She ousted eight-year member and board president Lee Jordan, the former publisher of the Alaska Star newspaper in Eagle River.

When Kincaid was seated in July, the balance of power shifted from a management-friendly majority to one critical of how the cooperative is run. Almost immediately, the new leaders began to make changes.

At her first meeting, Kincaid pushed through a policy that eliminated general manager Wayne Carmony's "latitude to exercise independent judgment," explaining that she wanted the board to have more say in the responsibilities of the cooperative.

MEA management retaliated in September, hitting Kincaid with a 134-page report compiled by staff documenting times that Kincaid allegedly violated MEA board policies in just a couple of months.

Kincaid termed the report, which included accusations that she made employees nervous, an "utter waste" of management time. But she did admit to wrongly discussing with her son -- a former MEA employee -- confidential information that the board had discussed in a closed meeting. She said it was "inadvertent" and was reprimanded. The other claims were dropped.

After that, the back-and-forth between the board and management came rapid-fire. On Oct. 27, the board seated a new member, Catharine "Kit" Jones. Two days later, they received a memo from MEA attorney Jim Walker saying they had voted in a way that violated the company bylaws. He also wrote a later letter objecting to an Oct. 30 meeting, saying the board, which had scheduled the meeting only the day before, had not given enough public notice.

In response, the board members essentially told Walker and other managers to butt out -- they passed a resolution that instructed them to "not devote their time and resources to advising the board with regard to the board's own actions, procedures, policies and directives."

FIGHTING BACK

Former MEA board members say they are aghast at the display. Led by Jordan, they formed a group, Friends of MEA, to oppose the new board leadership.

"A lot of things are happening, money is being spent and this resolution that was passed ... that was really alarming," Jordan said. "We're concerned that this change is in the wrong direction and it's certainly not transparent."

What's less clear, however, is why this electrical cooperative engenders so much discord.

Some have said the change is political, and that after Carmony was hired 14 years ago as general manager, the utility became involved in political strategizing at a level not seen before. Under Carmony, the company took a strong antiunion stance concerning its workforce and has frequently sparred with other utilities, including trading takeover attempts with its power supplier Chugach Electric.

The cooperative has also been accused privately of being an employment farm for the local Republican Party, with Carmony's wife, Judith, and employees like spokesman Tuckerman Babcock playing prominent roles in the Republican politics. But Kincaid is also a Republican, and is on the opposite side of this fight.

Others praise Carmony for his accomplishments, saying that under his leadership rates have fallen, power outages are less frequent and, in recent years, the utility's relationship with its union workers has improved. Jordan, a member of this camp, said MEA has often been tempestuous in the 45 years he's belonged to the cooperative.

"I haven't been able to put my finger on it -- and I'd have loved to know what the problem is," he said.

The most recent fight over local power, however, is at least partly rooted in a struggle for control. MEA managers for years have chafed under the yoke of their power contract with Chugach Electric. They've complained about Chugach's rates and management practices but have been unable to unplug from the larger company's power supply.

Find Rindi White online at adn.com/contact/rwhite or call her in Wasilla at 1-907-352-6709.