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October 8, 2010

Forum: Money questions for Wolverine

By GLENN PUIT ----

Another large retirement payout by the member-owned utility pushing to build a $1.3 billion coal-fired power plant in Rogers City is raising more questions about how the firm spends its money.

In recent years, Wolverine Power Supply Cooperative Inc. in Cadillac has spent more than $20 million on its proposed Rogers City coal plant, with no guarantee it will be built.

Last year the cooperative and its sister rural electric cooperatives in the region came under scrutiny for pricey executive compensation packages paid to a few of its leaders in 2007.

Now comes word that, in 2008, the not-for-profit Wolverine paid an additional $2.3 million to retired chief executive Thomas Stevenson.

The figure, from a recently released federal filing, follows last year's disclosure that, in 2007, Mr. Stevenson received a $533,000 retirement payment from Wolverine — the relatively small "power supply" utility serving roughly 225,000 members via its four "distribution" co-ops in our region. Those co-ops include Cherryland Electric, Great Lakes Energy, Presque Isle Electric & Gas, and HomeWorks Tri-County.

It appears the 2008 payment to Mr. Stevenson in that year's IRS 990 form is a final payout described by Wolverine as —¦ a combination of salary he deferred throughout his tenure with Wolverine, including investment-related earnings, plus the net present value of 2008 and future deferred compensation payments … upon his retirement."

The new filing indicates that current Wolverine CEO Eric Baker received $322,650 in 2008, plus $45,586 in "other compensation." At Great Lakes Energy, in Boyne City, President Steve Boeckman received $330,697 in 2008, plus a similarly described $78,542.

In 2008, current members of Wolverine Board of Directors, on average, received more than $40,000 annually in total compensation for jobs involving 10 hours of work a week or less. One director was listed as receiving more than $34,000 in annual total compensation for working four hours a week.

Wolverine also continues to pay some of its "former" board members. Their collective pay, which was more than $81,000 in 2007, more than doubled in '08 to roughly $197,000.

"The numbers are high," said Maureen Charbonneau, who unsuccessfully ran for the board of directors of Cherryland. "What was surprising to me was the $2.3 million — it is just so out of line with what else is going on around us in northern Michigan economically." So what are Wolverine's ratepayers — the members of those four co-ops — getting for all that high-priced management?

Leadership that's intent on building an unneeded, very expensive coal plant in northern Michigan. They are spending still more money today, trying to sue the state for denying the plant it's permit this May, on the grounds that regulators violated the state Constitution.

And, if Wolverine somehow wins and the coal plant gets built, what will it mean to its co-op members' electric bills?

A stunning 59 percent increase, according to Michigan Public Service Commission, which analyzes and regulates utility rates.

On behalf of northern Michigan's rural, working families, that seems a really bad deal, especially for all that money.

About the author: Glenn Puit, a veteran investigative reporter, is a policy specialist at the Michigan Land Use Institute. Reach him at glenn@mlui.org.

About the forum: The forum is a periodic column of opinion written by Record-Eagle readers in their areas of interest or expertise. Submissions of 500 words or less may be made by e-mailing letters@record-eagle.com. Please include biographical information and a photo.

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