Jemez Co-op Refuses to Release Contract

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Tapia LANL lawsuit 12-7-18

The first time John Tapia publicly disclosed his interest in a lucrative solar project between his employer and the Co-op was when he testified Dec. 7 during his lawsuit against Los Alamos National Laboratory.

Jemez Mountains Electric Cooperative has upheld its denial of a member-owner’s request to view the Co-op’s power purchase agreement with Cuba Jemez LLC.

The SUN requested a copy of the agreement in July on the grounds that Publisher Robert Trapp and the newspaper, both member-owners, wanted to learn about the fiscal fitness of the Co-op.

Andrew Chavez, interim general manager at the time, denied the request in August.

Attorney Charles Purcell, who represents Trapp and the SUN, sent a letter to Co-op General Manager Ernesto Gonzales Nov. 5 asking that they reconsider the denial.

“Mr. Trapp and the SUN are entitled to examine their electric cooperative’s contracts, particularly on a subject as central to the cooperative’s core mission as acquisition of the energy that the cooperative then sells to its owner-members,” Purcell wrote.

He wrote that Trapp had instructed him to sue the Co-op if they did not release the agreement within 10 days.

The Co-op did not release the agreement.

Attorney Nancy Long of Long, Komer & Associates, who represents the Co-op, replied Nov. 15 with a letter, in which she wrote that none of Purcell’s arguments persuaded the Co-op to disclose the agreement.

According to the Solar Energy Industries Association, a power purchase agreement is a financial agreement between a developer of a solar array—in this case, Cuba Jemez LLC—and a customer—in this case, the Co-op. Cuba Jemez owns and operates a 2.5-megawatt array on County property and sells power to the Co-op at a rate that follows the agreement.

The rate at which Cuba Jemez will sell the power to the Co-op is 6 cents per kilowatt hour, former Board President Nick Naranjo said.

But before the Co-op signed the contract with Cuba Jemez, the Co-op scrapped a deal with the Chicago-based energy company SoCore, which would have charged the Co-op 5 cents per kilowatt hour, according to a 2017 press release from Former Co-op General Manager Donna Montoya-Trujillo. Montoya-Trujillo announced at a 2017 board meeting that the Co-op had decided to decline the deal with SoCore, stating that it would take too long to recuperate investment in the construction.

An internal Co-op email, however, revealed that the plan with SoCore could have saved the Co-op between $577,912 to $1,318,394 from 2018 to 2022, and former general manager Joseph Sanchez, who worked on the deal, questioned the Board’s decision to end the deal in a 2017 letter.

“It does not appear the JMEC committee chaired by (Trustee-at-Large John Tapia) responsible for the project has consulted the proper players or experts when making this decision,” he wrote.

Tapia received an offer of an employment in June 2018 from a company, Mosher Enterprises Inc., owned by the same man who owns Cuba Jemez, Jerry Mosher, and began working for the company.

Naranjo said the Co-op signed the power contract with Cuba Jemez in September 2018. Tapia stated at a January board meeting that he is employed by Mosher Enterprises.

The SUN requested the agreement to verify the six-cent rate and better understand why the Co-op would have entered into the deal with Cuba Jemez.

Purcell, in his letter to Gonzales, cited the Co-op’s Policy 136, which states, “The members of the cooperative have a right to be adequately informed about the Cooperative’s operations and financial condition and shall have generous access to information reasonably related to legitimate interests of the members.”

The policy states that “contracts with third parties” are information available to member-owners—unless matters involved in the contracts are still under negotiation with the parties in question.

The policy allows the Co-op to protect information that is “privileged, confidential, or proprietary.”

Long wrote in her reply that the Co-op has determined the agreement is confidential because releasing it to the SUN “would result in public dissemination of competitive commercial terms for such power agreements and place JMEC at a competitive disadvantage in the market.”

Trapp said he and Purcell are now “contemplating future actions.”

In October, Trapp also requested any and all legal vouchers and invoices for October to December 2018, and for January to September 2019; any and all vouchers for January to September 2019; and Board meeting books for June, July and August 2019.

The Co-op has not released any of these materials­—although Policy 136 states that the Co-op should provide copies of the “monthly board meeting ‘book’” to member-owners, as well as the monthly financial report, including reports about fund expenditures, credit card charges, attorney expenses, bid lists, quotes, financial ratios, monthly statement of operations, balance sheet, cash flow statement, revenues, accounts receivables, capital budget and reports or communications from Tri-State and other information of interest provided to the Trustees.

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