Background: Hood River Electric Cooperative is a member-owned, not-for-profit organization that has provided electric service to members in the Hood River Valley since 1945. The Communications Access Cooperative Holding Enterprise is a member-owned, not-for-profit organization that was organized by HREC in 2003 to provide internet service in the same area.

HREC and CACHE both operate out of the HREC office in Odell. HREC employees serve the members of both organizations. If you are a co-op electric customer in the Hood River valley, you are a member of HREC. If you are a co-op internet customer, you are a member of CACHE.

The two organizations were originally kept separate to avoid potential financial risks for HREC and its members from the new internet business. CACHE has grown into a financially stable, well- respected internet service provider. This legal separation no longer seems necessary.

The HREC and CACHE boards of directors believe combining the two organizations is appropriate. This would align the structure of the organizations with how most members already see them. It would also provide administrative efficiency because the combined organization could have one annual audit and one annual meeting instead of separate audits and meetings.

What will change?
From a member’s perspective, there should be no change from this merger. Day-to-day operations would continue as they are.

How will this affect my capital credits with HREC and/or CACHE?
This change should have no effect on member capital credits. Capital credits are allocated to the members of HREC and CACHE separately, based on the revenues, expenses and net income of each organization. HREC’s accounting system is already used to keep separate capital credit accounts for HREC and CACHE members. We would continue using the same practices used today. The board of directors would continue to authorize retirement of capital credits for each business line based on the financial position and capital needs of that business line.

Will this cost us anything?
HREC and CACHE have money available to cover the minimal costs associated with this change, including the costs of the member notices and special meetings. The upfront costs will be offset in the long run by savings in future meeting and annual financial audit cost reductions.

What does merge mean?
Merging means all HREC members and all CACHE members would become members of HREC. CACHE would no longer exist as a separate organization. The services offered by CACHE would be offered by HREC. The HREC Board of Directors would oversee the combined organization.

Are there benefits to the members by merging?
There would be a slight reduction in overall expenses from administrative efficiencies. Here are two examples. Currently, an audit firm conducts separate audits for HREC and CACHE each year. In a combined organization, a combined audit could be completed. Similarly, HREC and CACHE hold separate annual meetings on separate nights. In a combined organization, all members would be invited to the same meeting.
HREC members would continue to vote for directors to serve on the board. In a combined organization, internet members would also have the opportunity to vote. Each member, whether they received electric service, internet service or both services, would be invited to the annual meeting and have one vote.

Are there any risks to the members by merging?
One risk is that each business line might be liable for the risks of the other business line. However, both organizations have demonstrated sound business practices and solid financial performance for many years. The board of directors has authority to set rates and policies to protect the members from risks. The board would continue to treat the two business lines separately, and staff would continue to allocate revenues and expenses to each business line as they do now. The likelihood of a business issue from one of the business lines impacting the other seems low.

Will our rates for electric or internet service increase?
Rates for electric service or internet service would not change as a result of this merger. With that said, we should note that CACHE is contemplating changing internet service rates for the first time in 15 years to support building fiber-to-the-home service that our members are requesting.

Why is this merger necessary?
Merging would streamline operations and align the official structure of the organizations with how our daily operations are conducted. For the most part, our internet customers already believe they are receiving internet service from HREC. This change would make that legally the case as well.

How many more members would HREC have?
HREC currently has about 2,900 members. After the merger, HREC would have about 3,600 members. Most of the new members live within HRECs electric service area but in rented housing where the electricity is included in the rent. Some live outside of the HREC electric service area, in areas where Pacific Power provides electric service.

Who serves on the HREC and CACHE boards of directors?
The HREC Board of Directors is elected by the HREC membership. There are nine members: President Butch Gehrig, Vice President Gary Bloom, Secretary Patrick Moore, Treasurer Roger Nelson, and Directors Opal DeBoard, Jeff Osborn, Doug Mahurin, Dick Sohler and John McGhee.
The HREC Board of Directors also serves as the CACHE Board of Directors, but in different roles. They are: President Patrick Moore, Vice President Butch Gehrig, Treasurer Gary Bloom, Secretary Roger Nelson, and Directors Opal DeBoard, Jeff Osborn, Doug Mahurin, Dick Sohler and John McGhee.

Who can I talk with if I have more questions?
If you have additional questions about the proposed merger, please feel free to contact us or stop by our office. Our email is hrec@hrec.coop and our phone number is 541-354-1233. Our office is open Monday through Friday from 8 a.m. to 5 p.m.

SPECIAL MEMBERSHIP MEETINGS
The boards of directors for Hood River Electric Cooperative and the Communications Access Cooperative Holding Enterprise have called for special membership meetings to vote on a proposed merger of the two cooperatives.

Both meetings are Wednesday, November 20, 2019, at the Hood River County Fairgrounds. The CACHE member meeting begins at 6 p.m., and the HREC meeting begins at 7 p.m.

The plan of merger and questions and answers will be mailed to all members of HREC and CACHE in early November with the official meeting notice. The proposed bylaws and articles of association are available on our website at www.hrec.coop.

To ask us a question or to request printed copies of the plan of merger and the proposed bylaws and articles of association, contact us at 541-354-1233 or hrec@hrec.coop or stop by our office. We are open from 8 a.m. to 5 p.m., Monday through Friday. We are happy to talk to you about the proposed merger or to send you an information packet.