DEMCO, Louisiana's largest electrical cooperative with 108,000 customers in the Baton Rouge region, is looking for a new top executive for the first time in nearly a decade, board officials said Wednesday.
John Vranic, CEO and general manager of Dixie Electric Membership Corp. since 2009, announced his plans to retire late last week in a letter to employees.
"There are no words that can express the sincere gratification of working with you during calm times or turbulent events, which are so much a part of our environment," Vranic said in the letter. "The DEMCO team has been my second home and family during my 39 years of service."
In the letter, Vranic said he planned to stay on until the DEMCO board of directors selects his replacement, a process that could extend into August or early September.
A special, four-man committee of DEMCO's board of directors kicked off their search for Vranic's replacement during an hour-and-15-minute, closed-door session Wednesday. The board's search committee agreed in an open session to advertise a notice for the opening with applications due at 4 p.m. July 16.
"John's done a fine job as the CEO of this co-op. He has been with the company for 39 years and change, and he has done a fine job. We look forward to continuing the reforms that John has implemented," Steve Irving, a board vice president and search committee member, said after the committee met Wednesday.
Irving said the search committee will meet at 6 p.m. July 18 to look at applications. The committee is expected to recommend finalists to the full board for interviews and a final selection, a process that mirrors what members used in previous CEO searches, committee members said.
DEMCO is a nonprofit rural electrical cooperative that provides power to parts of seven parishes: East Baton Rouge, Livingston, Ascension, East Feliciana, West Feliciana, St. Helena and Tangipahoa parishes.
The operation has about 220 employees. In 2016, DEMCO had revenues of $208 million with an operating margin after operating expenses, long-term debt and interest of nearly $2.3 million, the most recently available audit says. The co-op is regulated by the state Public Service Commission as far as its electrical rates and has a fiduciary duty to its ratepayers, who are members of the co-op.
Vranic's departure comes as an outside accounting firm has been hired to look at whether contractors who do work for DEMCO’s operations have improper relationships with board members.
The board voted in mid-February to open the audit after a terminated employee and an anonymous written complaint, purportedly from unnamed DEMCO employees, alleged wrongdoing by some board members and by Vranic and raised concerns about the co-op's level of debt.
Board and company officials have since said the audit is looking more toward the board members' and vendors' activities and contended DEMCO’s debt picture is at a reasonable level and decreasing.
A month ago, a majority of the 13-member board of directors voted to set new performance goals for Vranic and grant him a standard one-year extension of his two-year contract and a raise.
At the time, with the audit pending, board officials portrayed the extension as an endorsement of Vranic’s tenure. Vranic had said then he wanted to "let the audit run and look at it when it is finished." Board officials have said previously that the audit is expected to be completed in July.
But, in an interview earlier Wednesday before the search committee met, Irving said that Vranic’s retirement was expected.
Vranic had been telling members for at least a year that he had planned to retire in 2019. When asked why the board majority would agree to grant Vranic the contract extension, Irving said it was in hopes of encouraging Vranic to remain CEO.
"We wanted him to stay," Irving said.
He said Vranic is leaving on good terms with the co-op, adding "the vast majority of the board has been totally supportive of John."
President Richard "Dickie" Sitman and Vice President Irving are the only two board members allowed to speak on behalf of the board, according to a recent policy change that bars other members from commenting. Other members declined to comment Wednesday, citing that policy.
In his letter, Vranic wrote that DEMCO has accomplished goals “of improved financial stability, reliability gains, and being part of innovating groundbreaking operational systems, which paved the way for other co-ops and investor owned companies, as well as the successful expansion into other parishes.”
“I have effectively achieved all that I have set out to do for DEMCO,” Vranic wrote.
Under the search committee’s process, the prior job description for CEO will be updated. The job notice will be advertised in The Advocate and the official journals of the parishes that DEMCO serves and will be given to the Association of Louisiana Electric Cooperatives.