Mohave Electric’s 68th Annual Meeting Updates and Informs Members
Mohave Electric’s Annual Meeting held at River Valley High School Friday, June 13, concluded a week of District Meetings held throughout the week. The meetings allowed members to interact with Cooperative management and staff and receive updates on Cooperative business and important government and EPA proposed regulations.
The Cooperative’s Board of Directors consists of nine board members. Three directors, one representing each district, are elected annually for three year terms. As a not-for-profit rural electric cooperative, Mohave’s customers are its members who vote on their elected representatives during District Meetings. While an attendance quorum was not met at any of the district meetings, members in attendance recommended the three incumbent board directors District 1, John Nelssen (Vice-President); District 2, Carlos Tejeda (Treasurer) and District 3, Michael Bartelt, to serve another term by board appointment.
The focal point of the evening was Mohave Electric Chief Executive Officer, Tyler Carlson’s presentation about Environmental Protection Agency (EPA) challenges that are facing the future of electricity with regards to Carbon Dioxide (CO2) emissions. Carlson pointed out that the President’s Climate Plan directs EPA to enforce limits on CO2 emissions from coal plants and one of the fundamental elements of the proposed rule is state specific; for Arizona, the goal is the 2nd highest CO2 reduction goal in the country.
“There are 25 states that produce more CO2 than Arizona but none of them have to reduce carbon emissions in terms of percentage at the same level as Arizona,” said Carlson. “The EPA plan for Arizona also includes elimination of 100% of coal-generated electricity. By comparison, Kentucky and West Virginia produce three times the carbon emissions of Arizona but Kentucky’s goal is only a 1% reduction and West Virginia’s is a 0% reduction.”
Carlson emphasized the proposed EPA rules will result in significant rate increases due to the closure of coal generation facilities and the replacement of this major source of affordable electricity with other more costly resources. In addition to the impact of higher energy costs for residential members, Arizona will lose the ability to provide an attractive and competitive business environment because of the lack of affordable energy.
“Cooperatives support using a diverse fuel mix with renewable, natural gas, nuclear and coal, along with encouraging members to use energy efficiently,” said Carlson. “The cheapest kilowatt hour is one you don’t use.” He said we need a reasonable approach to our national energy policy that is phased in and affordable. Carlson encouraged members to tell EPA and Congress to reconsider its approach and to work with electric cooperatives to find a common sense solution that balances energy needs and environmental concerns. “Tell them we can’t afford higher electric bills,” Carlson said.
Carlson talked about the Cooperative’s financial highlights and explained the capital credits recently returned to members are an example of the difference between a cooperative and investor-owned utility. As a not-for-profit business model, net operating margins are returned to members as retired capital credits rather than profits paid to shareholders. Carlson said Mohave focuses on managing costs and keeping controllable expenses down. He explained the cooperative has gone from negative margins in 2009 to a positive in 2013. Carlson commended Mohave for being ranked the second highest out of 813 cooperatives in the nation for managing costs. He added that a rate decrease by our major power supplier, Arizona Electric Power Cooperative (AEPCO) was passed on to members as approved by the board of directors.
Carlson explained the Purchase Power Adjustor (PPA), required by the Arizona Corporation Commission (ACC), is designed to recover changing wholesale power and transmission costs and is only applied to energy costs. He noted the PPA dropped from a high of $0.0350 in 2009 to a credit of $0.005 in 2014.
For more information on Mohave Electric’s 2014 Annual Meeting and EPA regulations, click on the links to the left.