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Abstract

The Pedernales Electric Cooperative (PEC) is the largest rural electric cooperative in the US. In this case, readers learn about various principal-agent problems that occurred at PEC and the steps taken to correct such problems. Electric cooperatives are a vital part of the US electrical grid. Providing electricity to 40 million people in 47 states, these cooperatives serve 85% of the nation’s land mass. This case follows the experience of PEC’s former General Manager Juan Garza. Also, benchmark financial and operating information are provided. At the conclusion, readers are asked questions about the selection method for a new general manager and also about how this cooperative might improve its efficiency.

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