Correspondence with General Counsel Joel Paisner

To the OPALCO Board of Directors:

I am writing as a member, in advance of the May 7 Annual Business Meeting, to raise a governance question and to propose a path forward.

The 2024 audit (Note 12) discloses that the T-Mobile joint venture, originally a 10-year agreement signed in 2015, was amended in 2023 to a 15-year term, extending the framework through 2030. The amendment included a $1,119,387 settlement payment to Rock Island for historical use of cooperative infrastructure. Note 12 specifies recurring services from January 2024 through December 2026.

I have not been able to find member-facing disclosure of this amendment at the time it was executed. The published minutes of the November 16 and December 14, 2023 regular board meetings, and the December 22, 2023 special meeting (which ratified the 2024–2028 Collective Bargaining Agreement), record no T-Mobile action item. If a member communication or board record exists that I have missed, I would appreciate being pointed to it.

My purpose in raising this is not to relitigate a 2023 decision. Members cannot vote retroactively, and I’m not asking the board to undo a contract. What I am asking is that the cooperative use the time it has between now and the natural decision points ahead — the December 2026 service-period boundary in Note 12 and the 2030 framework endpoint — to do what was not done in 2023: ask members what they want.

The T-Mobile joint venture is not an ordinary commercial contract. It uses member-built infrastructure and the OPALCO-held 700 MHz spectrum license, purchased in 2013 with USDA RUS regulated capital. It determines whether T-Mobile Home Internet, available at $50 per month elsewhere in Washington, can be sold to residents of San Juan County. It produces roughly $1.1M per year in revenue to Rock Island. Decisions of this magnitude on member assets warrant member input, and the cooperative principles the board has adopted suggest the same.

With that in mind, I would like to propose three commitments for the board to consider, ideally to be discussed at the May 7 meeting:

1. That before any extension, renewal, or material amendment of the T-Mobile arrangement beyond December 2026, the board will conduct a structured member feedback process, including a published summary of the decision under consideration, a member survey or comment period, and a public board discussion of the input received.
2. That the board will adopt and publish a policy specifying what categories of contract or amendment require contemporaneous member notice going forward, so that members know in advance which decisions they will be informed about and on what timeline.
3. That as part of the run-up to 2030, the board will publish a clear analysis of the tradeoffs members face, including the financial position of Rock Island, the value of T-Mobile revenue under the current arrangement, and the alternative of opening the cooperative’s infrastructure to additional carriers consistent with OPALCO’s June 2014 commitment to allow access “at the cost of service, like any other member.”

These are governance proposals, not demands for confidential information. They are forward-looking, not retrospective. They ask the board to do what cooperative governance is supposed to do: bring decisions of this scale to the member-owners whose assets and interests are at stake.

I’d appreciate any response the board can offer if possible before the May 7 meeting, including a partial response acknowledging which of these commitments the board can consider and which would require more time. I recognize the board operates under real constraints, including those imposed by the NDA, and I’m not asking for disclosure of confidential commercial terms.

Thank you for your consideration.

Philip Emanuele
OPALCO Member, Orcas Island

Joel,

Thank you for the prompt response. I want to address three points and then restate the ask.

First, on member governance authority, your letter argues that members “exercise democratic control through the election of directors” and that pre-committing to member input on commercial negotiations “undermines confidentiality, weakens negotiating position, and increases financial risk.” I do not dispute that boards have authority to act on members’ behalf, including on confidential commercial matters. My proposal does not ask the board to disclose confidential terms or to put commercial negotiations themselves to a member vote. It asks the board to gather member input on what members want before the December 2026 service-period boundary in Note 12 and the 2030 framework endpoint. That is a question of member preferences regarding the cooperative’s strategic direction, not a question about contract terms. Member surveys and feedback processes on strategic direction are routine in cooperative governance and are not in tension with confidentiality.

Second, on the meeting record, the published minutes of the November 16 and December 14, 2023 regular board meetings record no T-Mobile action item, and the December 22, 2023 special meeting (by email) ratified only the 2024–2028 Collective Bargaining Agreement. If the 2023 amendment was approved by the board in any forum, in any executive session followed by an open-session motion, or under existing delegated authority to management, members would benefit from knowing which. Your letter does not address this question, and Foster’s correspondence did not raise the amendment. I would appreciate a substantive answer.

Third, on the recommendation that the board consider this matter closed, that is the board’s decision to make, not counsel’s. I respect the cooperative structure you describe and I am asking the board, not opposing counsel, to consider the proposal on its merits.

The ask is unchanged and is forward-looking. Before any extension, renewal, or material amendment of the T-Mobile arrangement beyond December 2026, that the board conduct a structured member feedback process to learn what members want as the cooperative approaches 2030. This requires no disclosure of confidential information and no concession on past decisions. It is a governance commitment I am asking the board to consider on its merits.

I will be at the May 7 Annual Business Meeting.

Thank you,

Philip Emanuele
OPALCO Member, Orcas Island