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Rock Energy Cooperative files suit against village

JANESVILLE — Rock Energy Cooperative has filed suit arguing that the village of Rockton, Ill., can't acquire electric and natural gas distribution systems owned and operated by Rock Energy.

The Janesville-based Rock Energy began serving Rockton in 2007 after acquiring the service area from Alliant Energy. It has 6,300 natural gas and electric meters in Rockton.

Village officials claim that an April 2005 referendum authorizes them to acquire and operate those systems and to issue bonds to finance the transaction.

Rock Energy filed suit in the federal court contending that the referendum was flawed and the village of Rockton does not have legal authority to acquire Rock's electric and natural gas distribution systems.

In its court filing, the cooperative cites two flaws with the 2005 referendum:

-- A $13 million difference between the amount shown on the referendum published to voters before the election ($35 million), and the dollar amount shown on the ballot voters got on Election Day ($48 million).

-- The measure specifically authorized the village to purchase or take by eminent domain the assets of the South Beloit Water, Gas & Electric Co., an indirect subsidiary of Alliant Energy that was dissolved following the acquisition of the assets by Rock Energy. Neither the referendum nor the ballot made reference to acquiring assets from Rock Energy, the cooperative argues.

"This lawsuit argues that either of these problems would be enough to invalidate the referendum," said Brad Koch, a Rock Energy attorney. "When taken together, they make an even more compelling case that the ballot measure was fatally flawed."

Shane Larson, Rock Energy's CEO, said the cooperative has expressed its concerns over the ballot for four years.

He said Rock Energy is concerned that safety, reliability and price would suffer if Rockton assumed electric and natural gas distribution.

"Rock Energy has been providing safe and reliable utility service for more than 70 years," he said. "We have seen no evidence that the village could come close to matching the rates our cooperative—a not-for-profit, cost-of-service provider—is able to offer its members."

Village President Dale Adams said the village can successfully distribute gas and electric utilities and help residents through reliable services.

"I think it's kind of a joke, their rationale," Adams told the Rockford Register Star. "At the time the referendum was passed, we didn't know who the owners would be, we wanted the voters to give us approval to purchase it from whoever, and at that time it was South Beloit Gas & Electric. I think it's pretty weak arguments, but who knows what the judge will say?"

Established in 1937, Rock Energy Cooperative distributes electricity and natural gas to about 26,000 meters across its nine-county service area in northern Illinois and southern Wisconsin. Most of its service area is rural Rock County.