Dakota Energy members act to stop board, management

DAKOTA ENERGY members Twyla Folk (left) and Pat Doak dropped off petitions on Wednesday calling for a special meeting. They are seeking to give members a voice in whether the cooperative should leave East River Electric Power Cooperative.

Dakota Energy members have hired legal counsel and called for a special meeting in an effort to put an end to the lawsuit filed against East River Electric Power Cooperative.

"We want the member-owners of this cooperative to have a voice," member Twyla Folk of Huron said in a press release. "We own this cooperative, and we feel the board and management are going down the wrong path."

In November, Dakota Energy asked the court to determine whether the East River Electric bylaws allow Dakota Energy to withdraw from the cooperative and, if so, what Dakota Energy must pay to fulfill its contractual obligations.

East River contends the bylaws do not allow Dakota Energy to withdraw without fulfilling its contractual obligations, specifically the Wholesale Power Contract (WPC) which expires in 2075.

CEO Chad Felderman has repeatedly stated, despite having filed the lawsuit, the board has not made a decision to withdraw from the cooperative, but is simply seeking information to make a decision. However, the cooperative has signed a Letter of Intent with Guzman Energy, a for-profit wholesale power provider.

At a townhall meeting in April, Felderman stated unequivocally that members would not be allowed to vote on the matter.

"There is nothing for members to vote on," he said. "It would be a board decision."

In response, Dakota Energy members began a petition drive to call for a special meeting at which members would be allowed to vote. They have proposed a resolution to dismiss the pending lawsuit between the cooperative and East River. However, after digging into matters a little more, members decided cooperative bylaws also need to be amended.

"Once you start digging into it, you find this and you find that," said Dakota Energy member Pat Doak of Huron.

Meetings are announced in the cooperative newsletter after the fact and members are not provided with the minutes, only a summary of what transpires at board meetings. Doak said he tried to obtain a copy of meeting minutes and was told the information printed in the newsletter constitutes the meeting minutes.

Consequently, members are also seeking to amend the bylaws to require the board of directors to give members a 14-day notice before meetings, to require the minutes of meetings to be available to members, and to require a two-thirds vote of the full membership to change wholesale power suppliers.

"We wanted to not just stop it, but to prevent it from happening in the future," Doak said.

He and several other members have been financing efforts to give members a voice in the decision to withdraw from East River. This included sending letters to all of the members, notifying them that signatures were being collected to call for a special meeting, which cost more than $1,800.

Dakota Energy bylaws allow members to call for a special meeting by presenting signatures from 10% of the membership. Doak estimated that 230 were needed. He and other member volunteers collected more than 300.

"We have a nice cushion," he said.

The initial resolution was drafted by one of the cooperative's attorneys. However, the concerned members have since hired former South Dakota Attorney General Marty Jackley to represent them.

"It's been a long road for us," Doak indicated, describing the effort to conduct the petition drive over the last three months. "We realized it would be a good idea not to screw it up at the end."

Members recognize that Dakota Energy brings a lot of legal clout to the battle. The cooperative is represented by Lee Schoenbeck and, according to Felderman, is being advised by Guzman Energy.

Dakota Energy's bylaws require cooperative leadership to validate the signatures and then set a special meeting date, time and location within 30 days.

The lawsuit was initially filed in state court but has since been moved to federal court. No trial date has been set. The case is still in the pre-trial discovery stage.