Brownwood: Cap Rock, KXYL & Craddick

URL: http://www.reporter-news.com/abil/nw_state/article/0,1874,ABIL_7974_3640505,00.html
Questions raised at Cap Rock Energy Corp.
By Associated Press
March 22, 2005
AUSTIN - A recent hearing has raised questions of poor management and improper executive perks at a West Texas energy utility.
According to testimony presented to a panel of three administrative judges last week in Austin, Midland-based Cap Rock Energy Corp. paid for trips to Bermuda, the Caribbean, Arizona and Colorado for its chief executive officer, David Pruitt and his wife, even though the company was suffering operating losses and looking to increase rates.
The company's service area includes parts of Fisher, Howard, Mitchell, Nolan and Scurry counties in the Big Country.
Cap Rock also paid for the use of a private jet for other executives and spent more than $16,000 on questionable hotel expenses.
The hearing was held last Wednesday as part of a 14 percent rate increase request by Cap Rock. The panel denied the increase, instead recommending a 7.5 percent decrease, or about $5 million per year.
Their recommendation now goes to the Texas Public Utility Commission, which is expected to make a final ruling in about two months.
According to evidence cited in the case, company officers and directors earned more than $1 million in bonuses between 1996 and 2001, despite operating losses during the same period.
Cap Rock officials maintain the trips were for legitimate business purposes and that its executive compensation is in line with comparable utilities.
''We feel that our rates and our requested small rate increase are justified and that our evidence supports that,'' said Pruitt, the chief executive.
Company officials say evidence against them is based on innuendo by a small group of West Texas detractors.
They said the extra money requested in the rate increase is needed to make a reasonable rate of return on investments.
Cap Rock converted from a rural electric cooperative to an investor-owned utility in late 1998.
Because of a little-known clause in the 1999 electric deregulation law, Cap Rock had free rein on setting its rates. The loophole was closed by lawmakers in 2003.
The company also made headlines in 2003, after revelations that it received exclusive, behind-the-scenes help from then-state Rep. Tom Craddick, before he became speaker of the Texas House.
Craddick, Republican-Midland, also accepted more than $10,000 in a deal with a Cap Rock subsidiary, and was offered a position on the company's board. Craddick declined the board position and has downplayed his involvement with the company.

note: If you listen to KXYL you will notice CapRock Advertisements running. Just another example that "all politics are local" ? Follow the money !