GVEC Hines, Milton D - May 28, 1987
Interview with Milton D. Hines
Interviewer: Karen Yancy
Transcriber: Karen Yancy
Date of Interview: May 28, 1987
Location: Mr. Hines’s Office, Guadalupe Valley Electric Cooperative, Gonzales, TX
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Begin Tape 1, Side 1
Karen Yancy: This is Karen Yancy. Today is May 28, 1987, and I am conducting an oral interview with Mr. Milton D. Hines, general manager of Guadalupe Valley Electric Cooperative [GVEC] at Gonzales, Texas.
What year did you begin working for GVEC and in what position?
Milton D. Hines: In 1958, as [a] power use advisor.
Yancy: What promotions did you receive and what additional responsibilities came with the promotions?
Hines: About 1960—I became member service manager, and that included member and public relations as well as sells, and in 1972, I became general manager, which included responsibility of the whole Cooperative.
Yancy: What experience did you bring to GVEC?
Hines: Very little, basically, though I had three years of experience at another cooperative and worked with members in the areas of sales, installations, and those types of things; so, being twenty-eight years old when I got here, I didn’t have a lot of experience.
Yancy: What organizational changes have taken place since you’ve been with GVEC? New divisions, etcetera—
Hines: Well, this is just an entirely different set up at this point in time. We’ve changed over the period of time with the needs of the members. We were not set up at all like we are at the present. As I came into GVEC, we were essentially—departmentalized, with all of the departments answering to the assistant manager or the general manager. Now, the departments answer to a division manager, and they, in turn, answer to the general manager. So, it’s, I guess, one tier of management has been inserted into the organization of GVEC.
Yancy: What awards has GVEC received while you have been general manager?
Hines: Of course, the most cherished awards are our safety commendations, and we have received several of those for our record in employee safety, member safety, those type of things. Then there have been numerous awards for community support and area developments and member service programs—recognition has been given to our people in the business division for their efforts. So, there have been those; the NEMA [National Electrical Manufacturers Association] award for farm electrification, that’s from our residential sales. That’s a real plus for us because of all the cooperatives in the United States, we have won the top national award three years in a row—for three consecutive years. We’re the only cooperative to win the Silver Switch Award [given by the Farm Electrification Council] two years in a row. We did it back in the sixties.
Yancy: What innovations in member services and consumer relations have occurred since you’ve been manager? New programs, business procedures, community services—
Hines: Well, since I’ve been manager—most of the programs that are there now were, in one way or another, there when I left member services—and they came from member services. But the most active program we have is the effort to work with the membership in greater efficiency programs. Higher efficiency of power use, and that’s been in recent years since I became general manager, and they’ve [the employees] been very successful at it. I’m very proud of them. We have one of the highest, if not the highest, thermal standards in our homes and work businesses in the United States, and it is because of the work of the member services people have done with the membership over some thirty years—particularly in the last fifteen years. In fact, we’re more efficient this past fifteen years because of special programs.
Yancy: What new programs in other areas have been developed?
Hines: Well, our line operations have had several programs to be instituted in my tenure of management. Pole inspection—it was not a glamorous thing, but it is essential for reliable service to have poles in good shape so they won’t break down during bad weather, and that’s been proved in Bexar County during storm time. In the right of way efforts, we have to clear our system of brush—of trees—at this point to upgrade our system and to reduce line loss. We are very fortunate in a low line loss—we have one of the lowest in the state. This is very economically, and we also provide better service. Those are our major programs—and I guess the other thing is our user safety program and the quality of our line crew. I mean that we have very fine people who have been trained well.
Yancy: How has the Public Utility Commission [PUC] affected GVEC?
Hines: Basically—not at all, from a standpoint. In essence, PUC is nothing but a buffer between the consumer and the utility. It gives the consumer an opportunity to go somewhere else to get some matters cleared up, but being consumer-owned and consumer-regulated as far as rates and taxes, that’s been no benefit whatsoever. From the standpoint of comfort to the public, being the same job base, a higher quota of users can’t outbid us; that’s something that we have come to depend on. Now, PUC has assisted us in designating our service area. That’s the area that has been designated for GVEC to serve with other utilities serving other areas. That has been a benefit. PUC has been a disappointment to us—it has a good form for some nice things to happen in the state, but it hasn’t developed [to the deserved level] in the state.
Yancy: Have there been any changes in regards to the size of the GVEC service area since you’ve been manager? If so, what were they?
Hines: Basically—no changes in the size. It’s just about the same as it was. We may have actually decreased very slightly from areas built up. So, it’s basically the same as it’s been for years.
Yancy: What brought back the decision—what brought about, excuse me, the decision to buy out GVEC’s REA loans? And how will this affect the future?
Hines: The latter decision to buy—the reason for buying the REA [Rural Electrification Association] mortgages was the fact that there was a continual cloud over the availability of funds for capital improvements and as to whether or not we were going to get the funds and have them available to us because this is a—[The REA] is a lending program that has been born in the political realm, and it has stayed there, and so the major reason was to insure that we have funds available to us to meet our needs, and with the REA being so greatly dominated by bi-partisan politics, it continued to be a cloud that existed. The other compelling situation was to move away from the federal regulations that accompanied the funds available to us from [the] REA, and those were continuous—they just annoyed us; they were not contributing to the welfare of the people or to the welfare of the organization. It was just bothersome, and I guess the third reason would be to allow GVEC to move into other non-electric utility services, if [we] chose to, without all of the federal regulations and working towards the future. Those are the long-range reasons, but I have to say that the primary reason for that was to have available funds without having such a hassle of federal guidelines, and the future is certainly uncharted, but water supply, satellite TV is just over the hill, and there could be, in some instances, an area where the Cooperative will be in the sewage business, even garbage pick-up. We feel, as the area grows from San Antonio and along the interstate that runs through the service area, we will find ourselves with developments that justifiably need all the utilities provided for them by somebody, and if we’re going to maintain our service area, we’re going to have to be in a position to either provide the third party [supplier] or, through the organization itself, have those services provided, so those are the future possibilities.
Yancy: What was the purpose behind establishing a load management program? How has the program grown over the years, and how effective has it been?
Hines: Well, that’s a very long-range question. We have had load management for—through our thermal program, thermal standard programs in our homes here for almost thirty years.
Yancy: What exactly is a thermal standard?
Hines: Well, it’s the insulation level of the building itself—be it a home, be it a commercial business. Insulation allows for greater diversity of cooling and heating equipment, so as to not have the equipment all peak at the same time or use it. We had felt that—we had gotten to the degree where we could not progress beyond because there comes a point where it’s not practical to go beyond a certain level of insulation, and [even though] the load factor or efficiency factor of the system was high, but we needed to get it higher; we needed to make it happen. We had to have some external level of cycling equipment that was out there. The only way you can do that is [by] linking together the occasional system with some type of control, and so that was, in essence, the reason for load management. Now, a driver of this, this external force—that was there was economics. An incentive to move away from some of the costs associated with generator equipment, and load management and thermal standards do that, and it—it is a program that allows GVEC to contribute a [lower] load to generating facilities that is more efficient. I know it’s hard to understand, but it’s like—let me just describe it this way: if you have a truck and you were going to haul something from San Marcos to Gonzales every day, then you were going to—that was your business, but at certain times of the year, that load was—that you’re going to haul was double in whatever quantity it may have been, well, either you had to have a bigger truck, which you would only use for, say, 1 hour out of 8,760 hours a year or however long it takes you to get from San Marcos to Gonzales, and then you have to maintain that truck and you have to operate that truck for the other 8,759 hours at a greater expense. But, if you had been able to take that same peak load and spread it out over other periods of time, maybe four or five days, the description of—hauling freight, you may have been able to haul it on a half-size truck. So, consequently, you would’ve had a more efficient truck, more efficient expense with that freight hauler, and under those circumstances, that’s exactly what we’re trying to do here at GVEC.
And the something that the public does not understand, and that is that there is an enormous expense associated with a generating plant. Just absolutely absorbent expense and it has to be paid for, whether or not it’s used. And so, we’ve attempted through our load management program to create a more efficient environment that GVEC contributes to the generators. It allows the generator loads not to be so high. Then there is an inherent benefit to the GVEC system itself by doing that because the system doesn’t have the peak loads, and, consequently, we don’t have the losses. It doesn’t have the stress so it makes the investment in the GVEC system more efficient as well. Generally, it’s a program that has to be, at some point in time, recognized as an operating condition of the United Sates, utilized to a greater degree, or we’re going to price ourselves into a very [difficult position]—because we’ve never paid any attention. We’re proud of our program, and it is doing exactly what it was intended to do. I think it allows us to run one of the more efficient utilities in the country, and I would invite everybody to join us.
Yancy: What led to the organization of the member information committees, and how successful have they been in fulfilling their goal of promoting a better understanding of the problems, objectives, and accomplishments of GVEC?
Hines: The reason for that was that—it has been recognized at GVEC for many years that communication with the membership can be done in many medias, but the most effective is one-on-one. It is not the most productive in that there are certain limits—very definite limitations on the volume of people that you can contact, but the one-on-one has to be the best for the people to have exchange [opportunities] to better understand. Within the early seventies, it was felt that even though we had attempted to have the communication, there was a void that probably could be filled with greater people having a more in-depth understanding of the circumstances that were influencing the cost of the operations. And so the recommendation was made to the board, after having researched it thoroughly, the conditions of the communication process, the recommendation was made to the board that we expand our one-on-one concept of communicating as best we could to the membership through this committee and bring [these] individuals into sessions that would allow them, in a controlled environment, to get the information that they needed about the cooperative and that there was nothing being covered up. In fact, there was an inference that many of them [the members] did not understand [what was] causing the operation to do what it was doing. So, it was organized, [allowing these] member couples to be brought together and just be given facts. Some of the facts were not bits of information that they enjoyed hearing, but it was the truth; sometimes the truth bites, and—but they [were] respon[sive] to, as I have made presentations to them and described their roles, I think they [the committee members] have accepted those roles of being extensions of the board, extensions of our member services organization [and] form the intermediary, if you will, between the community gatherings out there and their conversation about the Cooperative, not that they’re supposed to argue points, but if there is a question that comes up that someone has about details in services, high costs, or something that is being done with capital profits, then they are listening posts—they can respond or call us, and we will respond to that person, we will include them in our program, and both of those people will sit down with them or write them a letter, however communications are being done, and [that] allows for responsibility. The reward of that is that—yes, coupled with lower costs, it has been basically our membership—through the survey, I’m sure you have seen, it stated that their contact with the Cooperative had been successful. In all the surveys that this AHP takes, they said that this [96 percent] was the highest in the nation.
So, something has worked—I believe that people want to be part of something they feel that is providing service and is reflective of a good attitude and is reflective of the truth, and so the membership that serves on this committee, you don’t ever give up being on the committee, and, as you know, we keep them on mailing lists, and as I’m in the community, I see these people in restaurants, stores, and businesses; they come up, and they talk about the Cooperative, and I just really believe the big success is that it’s kindled a greater involvement in the Cooperative. Karen, something many people don’t realize is that for a cooperative to be successful over a long period of time, fifty, seventy-five years, has to have member support. It has to provide a service that is needed, and it has to have understanding and user-member involvement, or it will fail because it’s limited as to its operating area. It cannot go into other areas, and so this is something that I have been so insistent on, that the members be always foremost in the minds of the operators, their needs are to be taken care of, and success of the member information committee, I think, is reflected in the letter I had after—just a few weeks ago, where I was not able to respond to a question that had been written on the survey—the survey asked if there were any questions, and [I] responded to everyone, but there was a question that I did not understand and acknowledge as we were attempting to go through the various inquiries. And I said, But I’ll get with that member, because I knew who it was. The next morning I wrote that person to thank him for the question but could he expand on the question he posed, and I wished you would find that letter while you’re here. The letter said something like this: “The question has been answered through just a general conversation, but the thing that impresses us as new members is the detail of the response by the management of GVEC to any inquiry on the part of the membership.” It went on to say other very nice things about the Cooperative in our attempt to be responsive.
Yancy: Even in my observations, you don’t have any apathy between members and employees as seen in other cooperatives, like PEC [Pedernales Electric Cooperative], for instance.
Hines: Well, there has to be a reason for that, and I think you see it in the Review, you see it in the contact of the membership with the employees.
Yancy: Um-huh.
Hines: It’s, as you can see, my cooperative—and that’s not quickly created, it’s long-term. Now, equal votes in the church or whether it’s the chamber of commerce, cooperatives like to be—they like to be asked to be [involved, and] we’ve done that. I’ve been accused of having a dog and pony show every year, and, basically, that’s so. As you can see, we constantly look for ways to involve the memberships. Louis the Lightening Bug, safety bug—children, first of all, are being taught safety, and secondly, behind those children, parents and grandparents. Awards programs, various awards programs, and you can bet that the grandchild is going to be given the award, for her or his coloring book is going to be displayed by Grandma and Grandpa in front of all those people, and when you line those youngsters up and put the GVEC cap on, GVEC shirt, and you give a wristwatch, and they march across the state. I’m talking about six- and seven-year-old, seven- and eight-year-old kids, all the sudden the attitude toward GVEC for a big group of people is different. It’s much easier to find all if you have community success, and some of the other cooperatives haven’t chosen to, for whatever reasons, to have their membership involved. I have never forgotten that the members own GVEC. That’s equation of being member services was that being involved. Even if a little lady had a water heater problem on Saturday, Sunday, it didn’t matter; they called, [and] we fixed it because they depend on us and—so, there’ve been some real good, successful developments through the various years.
Another thing you need to understand—anyone needs to understand [is] that 62 percent of our membership has only been here ten years, so we’re not an old, tenure member group, but the beautiful part of it, and I think this is the same as the new member—when you talk about low membership, you need, maybe if you haven’t researched this or if you are not aware of it, then you should, is that when we mailed out our invitations to participate by substation—in Schertz substation, which serves the northern part of our service area up there on I-35 [Interstate 35], made up of people from all over the world, it’s a mixed bag of careers, lots of retirees—for ten days after that invitation had been mailed out, 52 percent responded back, were willing to participate in the program. Now, those people who could survey them followed up five years—no, ten years—and so what made them respond to that old, ugly utility company was their neighbors or someone in the community relayed to them what the Cooperative covered. It wasn’t necessarily mailing—
Yancy: Um-huh.
Hines: It was a whole attitude of the area, and those are the pluses. REA, CFC [National Rural Utilities Cooperative Finance Corporation], PUC, all of us [asked], How do you know that you’re going to get the people to participate when your little neighbor does? I don’t know, but let me share with you that in the last twenty-five years of my experience with the membership, they’ve never failed to respond to a program which we’ve implemented. I don’t know what they’re going to do in the next twenty-five years, but I can only rely on my past twenty-five years’ experience, and they have always responded. Now, I say that, I don’t know—that there is no reason to contact them unless I got a system to do something with them, and what the people done, they’ve just overwhelmed use—people wanted to be involved. They want to support the football team, and if you lock the door and they can’t get in the stadium, how can they be involved? Hmm? But if you open the door and say, “We need your help, will you help us?” We do that. We haven’t even given them an incentive; there’s no incentive. They’re told, You’re not going to get anything—now—but let us gain experience and we will give you the full benefit of what you’ve contributed. We promised them—I have not had one person say, “I won’t mind that,” not one. Let us get experience so we know what we’re doing; we don’t know what we’re doing, we spent $3 million of your money, but we don’t know what we’re doing—but if you’ll be patient with us, we’ll find out what we’re doing, and we’ll come through. And there has not been one piece of paper or one phone call contrary to [that request]. I’m proud of it and of how the employees have responded. We’ve had individuals that have had their problems, one way or another. Let us take our load management program, or let us do this or do that, we’ll go, we don’t use deception, not with us—and the folks. That just doesn’t allow for good relations. Let us leave. We’ve had very few, but we’ve some of those instances [where] people didn’t understand, people wanted to be reactive. We don’t want to be a problem, but if I were running a service station or if I were running an automobile agency, I would run it the same way because I would want to be back there in the service center, I would want to look over the sales, or I would want to drive away, and cleaning out the car—
Yancy: Um-huh.
Hines: —or talking to that dealer or talking to the trucker because, as I talk to them, I would ask them, “How do you do that?” People come up with their own ideas?
Yancy: Um-huh.
Hines: Think about your own—
Yancy: Oh yeah, they’ve done it.
Hines: Think about—
Yancy: When they’ve asked me to—
Hines: I got to admit something. I wasn’t prepared for this meeting. One gentleman chose to send me, I was eighteen years old, through the old Humble Oil [and Refining] School, and it was to prepare an individual to take over a service station.
Yancy: Um-huh.
Hines: And I was, of course, in there with some very—with older people. I was eighteen years old and in my high school senior year, and the training that was provided at Humble Oil—which is not Exxon, in Houston, Texas—is basically what we’re doing here at GVEC: recognize the people, meet the people, serve the people, and they will respond. Brag on their cars, brag on their kids—and they will return to have their car serviced. If you’re cleaning out the car or you’re out doing things that they don’t have too much time for, clean the windshields, getting every bug off. Then open the hood is just like opening a trunk of opportunities for a car. Fan belts, filters, oil changes—open the door to pull the hood latch on the car, you look—the first thing you did was look at—the door—the sticker on the door, see if you needed oil. That’s the first thing you did, and it shows the car mileage—you say it’s time for an oil change. They’ll say, Oh, I forgot about that, when can you get to it. Service station attendants do one of the finest jobs. It is a good job; you assist people, you get to know people, and you get to see them respond. They come to value the work you do for them, and they come back to see you. Karen, it’s the old Humble Oil Refinery itself, that’s all. It’s not bad, and if I were president of Southwest Texas State University, I would use it.
Another parallel was Dr. Harmon [L. Lowman] at Sam Houston [State University] where I went to college. One thousand and seven hundred students were enrolled. He prided himself on knowing all 1,700 students. He said—I think he said—the first time I ever talked with him, saw him, was at college. I was walking up the sidewalk in front of the education building at Sam Houston. Never had talked with him, and he spoke to me. He always spoke a few minutes with every student; every student would get a pat on the back. He said, “Doyle, I haven’t met you since you came here. I hear you’re a good fisher. How about coming to visit me? I have a beautiful place. You will love it there. Don’t worry about breakfast. I’ll take care of it.” So the next morning, about 5:30 or 6:00, I went fishing with him. Something I learned from him when I was at the house, there were five or six boys and girls in his kitchen with Mrs. Harmon serving breakfast, and they were students who had gone to our college. They were living in his garage apartment or his spare bedroom. He was taking care of them, advising and training. We’ve attempted to extend that attitude to people here at GVEC, and, in some areas, we’ve been successful. Does this answer—
Yancy: Yeah, why did GVEC start offering vocational scholarships, and what are the qualifications for receiving them?
Hines: Karen, I could not speak specifically to the qualifications, but why we chose to do this was that there was that group of young people out there needing to be in vocations in the future, and we did not see any choosing vocations as a future. We saw them going more for academics. There’s nothing wrong with that, but everyone’s not academically inclined. We saw that we needed air conditioner people; we needed mechanics; we needed electricians or sheet metal people. In those areas, if we were going to have these services available to people in the future for the membership and public as a whole, and back in that time, the vocational courses were beginning to be started within the high school, and I came out of it. I enjoyed it, and so we put our heads together and tried to develop some type of encouragement for those youngsters to go to a vocational school. Of course, TSTI [Texas State Technical Institute] has just been a godsend for us. We have six or eight TSTI graduates here in the organization, helping out with the communities’ needs. We showed one after the other TSTI programs. They would come by to get their carpenters or their plumbers or their electricians. A community has to have service approval. It’s got to get rid of its waste; it’s got to have its cars fixed, got to have air conditioning installed and serviced. It’s got to have plumbers, or the community will die, and how are you going to get that unless you interest some of these youngsters into their programs. You can take them all out on the line and let them gain some experience by working, so we got involved and let them gain some experience. I go out and see these young people. The boy who comes to work on my house, still does my house, is a TSTI, GVEC scholarship student. He went into construction and works with his dad now, learning to run the business. I didn’t know that he was—he had been in the program, and I thought it was just fantastic, so he got some training that was beyond going out and just starting to work. He got two years of intensive training in ten–twelve months, and if we’re going to have cars, if we’re going to have homes, if we’re going to have sewer plants, if we want our water clean, we’ve got to have those crafts. So we’re interested in the community and having it [these trained people] available. I think you are probably aware of all the youngsters that we have here, who have come through here from the vocational distributive education program, work here and leave. They come back, they come back to visit. They come by after they get out of school and say they would like to go to work for us, and we have to turn some of those down. We can’t hire them all.
We hire what we can, and [recently] as I went through the appliance service shop, here was this young lady who a year ago was our housekeeper, and she had been in and out of the building. She was sitting there working and stuffing or putting labels on security light mail-out. I walked past her, and she said hi. I walked past her, and she spoke again, so I turned around, and she said hi again, and I recognized her. I said, “I thought you were a student,” and she said, “I am, but I finished my first year.” She has a tremendous personality—she used to be shy—and, if I’m not mistaken, she wants to be a lawyer, but she was very comfortable, and I sat and talked with her one day, just fascinated. Why did she come back? She came back to say thanks to GVEC. Do you think in communities in the future that such a professional person can contribute? Or somebody back home at GVEC? She had a say, she had a friend one-to-one—and as TSTI tells us at GVEC, you train them; you send them back to these communities. You go in some community and see how it is, and you can’t get any electric wiring; you can’t get your air conditioner running; you can’t get your car worked on; and they don’t have enough money [for] anything else. There is a young man who went to Wyatt Earp Hydraulic School, went to work for Hope Machines of San Antonio at $11 an hour, guaranteed fifty hours a week. He could work as many hours as he wanted to. He was really qualified out here in Parksfield, a little community of about one hundred people. This kid was making $4 an hour. A shy, very shy person, super hydraulic person, but he could never have done well in academics because he couldn’t talk, couldn’t express himself. His brother went to A&M [Texas A&M University] with my son; they were classmates out of school here—went to A&M and became a veterinarian and opened up a shop right down the line, said I will never catch him financially, never because he’s in the crafts and said now he’s $16–18 an hour. He takes home $40–50,000 a year, and he’s working on tractors and other machines, carrying a set of tools—
Yancy: So it takes all kinds of people.
Hines: Sure, and just as he’s making money, he’s loving it. It does take all kinds of people. So veterinary business is okay. That’s great. You only spent seven years, didn’t you—
(Hines and Yancy laugh)
Yancy: That’s true. How did LCRA’s [Lower Colorado River Authority] Fayette Power Project affect GVEC, and what were some of the difficulties associated with it, and what was the purpose of establishing it?
Hines: The purpose was to have more capacity. We needed more capacity, required more capacity and the effectiveness—and it provided us a generated fuel mix that we had not had before, hard coal. We had never had hard coal. Initially, it was high, but as things happened, it became a little cheaper. It’s a beautiful plant, and so it’s stabilized the electrical requirements, supplying the electrical requirements of this area—it’s a good project, outstanding project, and if we can work out the freight price and the price of coal, things like that. I would love to see the Fayette Project expanded to include all of Texas because a fuel mix then would be expanded, and the fuel supply will be diversified, so if something goes up in one area, there’s others to go on. And the other part of it is it gives Texans employment, and it gives us a better handle on our destiny, and to dig in Texas coal mines is a better destiny, and there’s problems, but if it’s handled right environmentally, as it should be, I’m sure it can be good for us. There are those who do not want it to occur. You’ve heard that with rail companies and—but then there are those environmentalists who are saying gloom and doom things, I can assure you this: as you go up here and smell the carbon monoxide off of I-35 or I-10 [Interstate 10], it’s worse than what; we’re doing more to poison our environment [from automobiles] than those mines will. So the Fayette Project is a stabilizing influence on this part of the state, and I’m happy to say we were a part of making that decision.
Yancy: Could you tell me about the Coastal States [Gas Producing Company, also known as the Coastal Cooperation]–Lavaca suit and how it affected GVEC? I was reading about it, and I didn’t really understand it.
Hines: Well, again, generated fuel was being supplied to LCRA by Coastal, and they chose to break their contract and to start raising the price, and the railroad commission approved of them doing that in the public interest, but that was [a] very fraudulent, well, deceptive scheme, and it basically brought our economy in Texas and in the United States to the state we find it in today. We have inflation. We’re hit with financial ruin. Texas has fossil fuels. Now, the good side of it is that it made Texas wake up and get all the fossils, the ones we could get, so we stalled much higher costs as a result, and we saw a different operating condition—out of that came new member information committees. We became closer to our membership because we were pretty well-placated into the state of mind that we were so—so that was a plus, even though from time to time, [it was] traumatic, if you will. And I feel like GVEC has benefitted in the long run by being more cooperative in the use of fossil [fuels], and it diversifies our fuel, so that’s a plus. We increase our efficiency, that’s a plus, and we got more energy, and that’s a plus. So if you look at it in the short term, there’s a problem. Long term, it’s probably justified. I guess the right answer for the problem at this point and our government’s economy—
Yancy: What was the Texland project?
Hines: Well, they chose to—are you saying the problem of not being able to, or there wanting to leave us or why?
Yancy: Who is Texland, and what was their goal?
Hines: Texland is a cooperative, and they’re with the Pedernales Cooperative and the Bluebonnet Electric Cooperative, and they were organized. Texland Cooperative wanted to build generation plants and supply those distribution points and to do so as a cooperative. Their problem was that they were dissatisfied with LCRA. They chose not to attempt it. They made an effort toward trying to leave LCRA instead of trying to work with them—they were very determined to not be a part of the combined forces. They wanted to run their own show and not be a part of LCRA. That’s what happened. I would ask you if the membership out of Lampasas would agree—
Yancy: I had never heard of Texland to tell you the truth—
Hines: If I were to go into a community that GVEC stocks were sold to, I can assure you that everybody would know, every member would hear of the proceedings—
Yancy: That’s the difference in the people right there—
Hines: I think that’s a pretty good example of maybe not at that point in time communicating to the degree that they needed to. I’m not sure they believed that, and I’m not sure now, but it wasn’t bad. We still tell them that if they want to leave, fine. We spent money to support them, but the scheme was such that it was just not durable. The Texland scheme just simply would not work, and if you’ll scale it down to some practical areas, then it would have possibilities. They chose not to heed any of the comments of various wholesale customers. They are now apparently getting back into LCRA and are dealing with them. Their decision and, I guess, the irony of the whole thing [is] they spent $20 million, and we’re going to have to pay it. LCRA has chosen to pay them $20 million and assign GVEC part of it, so we’re going to pay to service that [debt] for the next thirty years.
Yancy: Have there ever been any problems between employees and management or between the board of directors and employees?
Hines: At GVEC?
Yancy: Uh-huh.
Hines: During my association, there have been no major problems. As always, there have been minor skirmishers. This is just because of different views. Prior to my coming here, there was some difficulties in the early fifties, and I, of course, wasn’t privy to the conservation, but there was difference of opinion among employees and management at that time, but I just never really dug into it.
Yancy: Mr. Davis told me about it. Have you had any problems in purchasing electricity from LCRA or GBRA [Guadalupe-Blanco River Authority], and when was the decision made to start purchasing electricity from GBRA? And why?
Hines: Problems? There’ve been no major problems. It’s just operating entity problems and coordinating those. We constantly have views about how to do things, but those are very solvable. The six dams that GBRA has are in our service area. At the time, we had the opportunity to acquire that power—the power company had basically good service, but they [GBRA] did not have sufficient monies to maintain things, so they were really on a low ebb. We expressed an interest prior to the [hydro power] when the contract was expiring at the end of 1979, and we always had had a good relationship with them. They did a good job, and so we told GBRA that we would like to be considered for acquiring that electricity within our service area. We wanted to work with them; we had worked with them in the development of water treatment facilities. They said fine. So, January first of 1980, we acquired that resource, which caused us to have to get LCRA to agree to allow us to blend that hydro into our systems because they have to give us an exception to all of our requirement contracts, and it’s been good relations. One thing you may or may not know was that we along with GBRA acknowledged that maintenance needed to be done, replacements needed to be done on a long-term program. We’re on a schedule. In fact, we’re ahead of schedule. We told our people, our members now, that we’ve got a maintenance program to undertake. We’re going to pay GBRA more for that production than what it’s worth to us, but we’re making an investment in the future. We told the PUC the same thing. Everybody knows everything, every fact was open—
Yancy: Uh-huh.
Hines: Now, they have no debt at GBRA. We’ve paid all of that off. [GBRA had completed] all of our major maintenance. We’ve got it paid for. What are we doing, Karen? We’re looking toward the future when LCRA’s cost goes higher and higher. We’ve got all this behind us over here, and we’ve got them at peak capacity, and we’re going to get the most hydro out of those dams that we possibly can at the most opportune time, which is going to lower our cost to the membership. We told our members that. Karen, we have not had any dissention, and so, again, I think it’s that trust.
Yancy: Uh-huh.
Hines: Trust that’s built up. We’re going to charge you more now. Well, your first reaction is, “I don’t want to be charged more.” But here’s what we’re going to do: we’re going to make an investment. If we make it more expensive now, it’ll pay bigger dividends later.
Yancy: Uh-huh.
Hines: In our judgment, it’s a good deal. The only way—and so it’s about 10 percent of our totals now, but see, we can bring that 10 percent capacity up at the peak times, which means we don’t have to buy the capacity over here at the generator, the big generator, which means we get real nice dollar savings. We’re looking five–ten years, where do we need to be, what can we do, and because with inflation, if you can do it now coupled with something else you’re doing, it doesn’t cost very much more. It increases the capacity, like the ability to really expand out here when you don’t have to do it later, so management made the right decision. It’s just a fact of our operation—
Yancy: What construction has taken place in your tenure as general manager? Rebuilding, renovation, expansion, or major upgrading of the distribution system?
Hines: Practically all of it. We’ve expanded all plants, all buildings two, three, or four times; all general plants have been expanded basically, all substations—notable, our plant was worth $12 million in 1972, and we’re worth $61, almost $62 [million] now, so in twelve or fifteen years we’ve grown about $50 million. We’ve basically renovated all of the transmission system; every substation has some increase in capacity. It’s been a tough time. High fuel costs, high inflation, high load, high capitalization, and trying to meet all that at the same time keeps you under a strain much of the time (laughs).
Yancy: What do you see as the future of GVEC?
Hines: Fantastic. It’s better today than we’ve ever had. I see us expanding over into other things, satellite TV, garbage, sewage. We have an opportunity now to provide every one of them, every service—and I believe that every one embarked upon has to be centered around the need for it. In your research, I’m sure you saw that over 60 percent is commercial and industrial-consuming, and that is only 7 percent of our membership.
Yancy: Um-huh.
Hines: So, 93 percent of our membership requirements is only consuming 40 percent of our load, so that’s not unusual for us. It’s very definitely not unusual for us, so I think with being close to the railroad and having water, I think we’re going to see a bunch of development—just really big development—I know it’s on the backburner of economics, economically better time will make it, and so I see GVEC as a very viable electric cooperative that is in a position to diversify and to gain itself from it. I think there is a great possibility you’ll see territorial growth as mergers occur, could occur—
Yancy: Uh-huh.
Hines: As you saw, we almost bought Kerrville, [I] guess you researched that, and that could have been a grand operation. I wish those people well up there, but I think they could have had better service and cheaper service had they been willing to go with GVEC, but they chose not to, and that their choice—and I think you’ll see GVEC, I don’t know the specifics, and who knows really, but that member out there is informed, and the specific amount is known. To get away from the increase in rates, stay with the member. The member’s needs, member services—
Yancy: That’s all the questions I have. Is there anything you would like to add?
Hines: Glad to have you doing this. I’m really looking forward to it, and I don’t know how we got in contact with you, but I’m proud it all worked out. And as you know, we’re intending to get this publication distributed and reprint the other one.
Yancy: Uh-huh.
Hines: —We’re going, at our fiftieth annual meeting, we’re going to give a set of those books to all who attend. I’d love to see us mail them to every member.
Yancy: Uh-huh.
Hines: —And I look forward to seeing the next twenty-five years written. Hope I’m here, around, but it’s a good project for you. I hope you’ve enjoyed it.
Yancy: I have. I’ve really enjoyed it. I’ve learned a lot.
Hines: I hope you—I don’t know what your future plans are, but whether you’re a journalist or whether you’re teaching school or whether you’re a professional, I really believe if you just aim toward providing a service, people will respond.
Yancy: Uh-huh.
Hines: I don’t know if you ever hear of Glen Blaine. He was a football player at Baylor [University] years ago, All-American, very successful. He is an insurance person up in Memphis, Tennessee, enormously successful. His book, his paper book, a paper book on success said in one part, it said that if a person could keep everything in order, you can’t fail; you just can’t fail. He said that if your individuals provide result—that success will come. Recognition will come through services, and, of course, that reward will too, but you see, you got the reward by producing results. So we’re trying to continually provide these results through service. I have, just as professors will do. I think that’s right, it’s important.
Yancy: Uh-huh, yeah.
Hines: For example, here is a man very involved with the church that—rich person, a doctor, and a mutual friend of ours told him about GVEC and how we were talking about expanding the services, doing things, different things for the community, and about a week later, I have to admit I’ve not read this, here my friend comes with a book by Glen Blaine. He said, “I would like for you to keep this book to see if it would help you.” One morning, about 7:30, when I normally get here, the phone rang, and I heard this long, southern, drawled-out voice say, “Doyle, I’ve never met you, this is Glen Blaine from Tennessee.” He said, “I’ve heard of you but never talked to you, so I thought you should know something: don’t ever forget the little man, the big man can take care of them. Don’t forget the little people.” So, Karen, that’s what I’ve done, and it’s ironic that you end up, when you get to the end of your career, that you see so much, so many that just about the time you get to where you can produce, you’re through. So therefore, you’re speaking; we’re developing, over time, a philosophy, so to speak. I hope we will have enough energy, at least what we’ve had for the last twenty years, so that we can increase services.
End of interview