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By John Moore Marble Falls The hill country west of Austin presents a landscape as seductive as any in Texas. This could be where Lassie lives. Hills of oak and cedar and fields of waving grass slope to the cool waters of deep blue lakes. Farther west, where the subdividers have not yet cut their initials across hillsides, the country grows a bit wilder before the granite hills melt into rolling plain. West Texas begins at a place called Fuzzy’s Corner eight miles from Lake LBJ. Once a few hardy ranchers tended wide ranging cattle herds with an eye to the often raging Colorado, but in 1935 the Lower Colorado River Authority began to remedy that fluke of providence with a series of dams. The Highland Lakes were born and refugees from Houston and Lubbock were easily convinced to spend their golden years resting beside the water. They came hoping to forget about pollution and high crime and high taxes. “Don’t dream of paradise,” the real estate agents rhapsodized. “Live in it.” And paradise it certainly was. Then came the energy crisis. In 1974 electricity prices increased more in one year than in the quarter century before, primarily because the cost of natural gas and fuel oil used to generate the electricity had risen into the stratosphere. Consumers elsewhere could buy cheap Texas natural gas \(its interstate price is regulated by the Federal Power mission just kept approving fuel rate hikes when they were requested and when they weren’twhen the gas companies bypassed the regulatory powers of the cities and the commission by simply tacking fuel adjustment charges onto their billsthe Railroad Commission looked the other way. Central Texas, where most of the electric services buy their gas from the poorly-run Lo-Vaca Gathering Co., was especially hard John Moore is editorQ1The Highlander, a weekly paper in Marble Falls. David Crowder A. W. Moursund hit. And retirees, living on fixed budgets, began to panic as their bills doubled and then tripled. The cooperatives which deliver electricity in the hill country were among the first to feel the pressure from unhappy bill payers. The response of one co-op, the Pedernales Electric Cooperative, was enough to make some of the retirees wish they were still in Houston. largest, serves 34,000 customers. Headquartered in Johnson City, it is but another of the hometown benefits bequeathed by Sam Johnson’s boy on his way to the presidency. As a congressman from Texas, Lyndon Johnson plugged for the rural electrification act and, true to form, he took care of his own. One of Johnson’s own in this case is his former paftner in business and dominoes, A. W. Moursund. The consumers who came to look at PEC’s books to see if their electricity might be a bit cheaper with some management expertiseexpertise retired Houston executives would be happy to contribute found evidence of Moursund’s control of the co-op for decades. Moursund, who is offically legal counsel to the co-op board, does more than counsel the PEC directors; he dominates them. Moursund’s personal secretary and business associate, Hilda Kroll, is secretary to the board. Longtime PEC president E. Babe Smith was a partner in Moursund’s unsuccessful application for a national bank charter at Round Mountain in 1971. \(According to an Austin American -Statesman story, Round Mountain had a population of 92 in 1972if you counted outlying neighbors cooperative’s seven directors sit on the Moursund family’s Bank of the Hills in Cedar Park. When the retirees asked to see the PEC’s books, Moursund claimed that the co-op is a private corporation, not a government agency. He simply sidestepped the customers who pointed out that they were member-owners, stockholders in the corporation. The persistent ones, however, did learn that Smith has been president of the co-op since 1941; that the PEC has a dozen employees; and that it buys electricity from the and then contracts with the authority for operation of its system. A call to the PEC is answered at LCRA headquarters in Austin. Why, some customers wondered, should the PEC act as a middle-man between hill country electric users and the LCRA? The LCRA sells electricity directly to customers in San Marcos, Kerrville, and San Saba. The LCRA management once answered vaguely about cooperatives being able to get better interest rates for expansion loans. These days, LCRA General Manager Charles Herring, who is getting more complaints than he can handle, responds to the question with an enigmatic chuckle. When the LCRA sent its last “underrecovery” surcharge to the cooperativeclaiming conservation by customers had driven the unit cost of electricity even higherMoursund himself suggested the co-op start looking for another power supplier. But that was probably an idle comment. The LCRA and the PEC are too closely linked for one to be rid of the other. The retired folks who began seeking information on the co-op in 1974 might have saved some time by talking to Joe Shields, the abrasive editor and publisher of weekly newspaper in Blanco and Canyon Lake. Shields saw the energy story developing in 1973 and decided to become the first newsman to cover the PEC directors’ regular meetings. Talking stopped as he entered the board room, Shields remembers. “When I told them I was a newsman and a cooperative member and I was here to cover the board meeting, they looked at me like I was a green monster or something,” he said. The editor was soon ushered out of the room by the physically imposing Moursund, handed a copy of the board’s agenda, and told he wasn’t welcome, seeing how it was a private corporation and all. Shields covered two of the board meetings by leaving a tape recorder in his briefcase behind a door. The board caught onto that though, and Shields and his tape recorder were excluded from meetings for more than a year. It took the friendly persuasion of U.S. Rep. Jake Pickle to open them. Pickle was confronted by angry customers from Wimberly at a meeting called to explain why the PEC had tacked surcharges onto their 1974 bills. When Pickle told the Wimberly residents that they should become more involved in the cooperative, they informed him that they weren’t allowed at the meetings. The congressman got reporters and consumers admitted to subsequent board sessions. Once the meetings were opened, customers from the newer areas served by the ut ility discovered that they couldn’t be represented on the board. Though the PEC serves 13 March 26, 1976 3 Co-op versus consumers