2017 Annual Meeting
Mohave CEO Stresses “Call To Action” for Capital Credits
Locally earned funding should be returned to communities, Carlson says.
During the Mohave Electric Cooperative Annual Meeting held on Friday, June 9, CEO Tyler Carlson held a Call to Action card during a key part of his presentation to co-op members. Carlson explained that the assigned capital credits may be in jeopardy at the state level. The Call to Action will be a way for members to make their voices heard with lawmakers in 2018.
(to view the 2017 Annual Meeting Video, click here)
At the District Meetings, Members in attendance recommended that the Board consider incumbents Board Director District 1, John B. Nelssen; Director District 2, Carlos Tejeda; and Director District 3, Michael Bartelt, to serve another term by board appointment. As a not-for-profit rural electric cooperative, Mohave’s customers are its members, and they have a voice in voting for their elected representatives at the District Meetings. The Board of Directors consists of nine board members, with three directors representing each of the three districts in Mohave’s service territory. One Director from each district is elected annually for a three-year term. Member-elected directors are also members of the Cooperative, who live in the districts they represent, and look out for the best interests of the members in conducting the business of the Cooperative.
Lyn R. Opalka, Board President, conducted the order of business at the Annual Meeting. A quorum of 179 members was in attendance, plus their guests which totaled over 300, which was the largest in recent history for an MEC Annual Meeting.
Opalka introduced Mohave Electric Cooperative Chief Executive Officer Tyler Carlson, who updated members about the status of the Cooperative. Carlson first addressed the more than $12.8-million kept in the pockets of members during 2016, through the Purchase Power Adjustor credit on member bills.
“MEC manages our power resources to minimize our energy costs and take advantage of low market prices when we can, lowering our energy costs by way of the PPA, even if the low market is temporary,” Carlson said. He added the PPA is a mechanism approved by the Arizona Corporation Commission, which provides a way to adjust to changing wholesale power and transmission costs. The PPA helps to avoid frequent and costly rate change applications which cost hundreds of thousands of dollars. He noted the PPA has dropped from a high of 3.5 cents charge in 2008, to a current of 1.75 cents credit per kilowatt hour.
Carlson also explained the Cooperative’s Board of Directors and management are working very hard to manage controllable costs. In fact, he noted MEC ranks among the lowest two percent for controllable costs compared with 811 electric cooperatives nationwide.
Explaining a cooperative is a not-for-profit business model, Carlson noted rates cover the cost of doing business and are not marked up to make a profit as with investor-owned utilities. Net operating margins are returned to members as retired patronage capital credits rather than profits paid to shareholders. Earlier this year, the Board returned more than $1.5-million in patronage capital credits, and members received checks or billing credits in May.
Meanwhile, a highlight of the evening was Carlson’s “Call to Action” for Mohave Electric members. He told the story of the recently completed Arizona legislative session, where an effort was made by the state to escheat assigned capital credits from Arizona’s rural electric cooperatives.
If successful, the move would severely and negatively impact numerous community programs in Mohave Electric’s service territory, which include River Fund, Inc., the Veterans Resource Center, MEC’s Classroom Grants program and the Washington D.C. Youth Tour, among many others. Over the years, the latter has had over 650 students participate statewide, but would end if the state sweeps the funding, Carlson said.
At Carlson’s request, during his presentation many members completed “Call to Action” contact cards, to help stress the importance of keeping assigned capital credits local during the state’s next legislative session – rather than the money going to the state, or Maricopa County.
Holding the card, Carlson told MEC members, “We need your names. We need you to be contacting these folks. We need you to tell them to keep the money local. That’s what we need you to do.”
He especially urged members to be proactive and contact our Arizona state representatives – State Senator Sonny Borelli and State Representative Regina Cobb – during the 2018 legislative session.
“And we need you to remind Regina and remind Sonny, as well as our third state representative, that the money needs to stay local. It doesn't need to go back to the state.”
Cobb was among Friday’s invited guests, and touched on the advantages of Co-op membership prior to Carlson’s presentation. She also addressed the assigned capital credits legislation that will be an issue during next year’s session.
“We’re going to go and hit it hard next year again and hopefully get it across the finish line,” Cobb told the audience.
Commitment to Community, a cooperative value, is one way that electric cooperatives empower members and their communities. By investing time, money and expertise to build the local economy through economic development and education, as well as supporting charities and other community events, cooperative communities are a better place to live. Carlson pointed out that over 70-percent of Mohave’s 77 employees volunteer their time and support for many local organizations, to make a difference in our community.
While talking about Mohave’s investment in the community through numerous programs, Carlson also mentioned Touchstone Energy’s Co-op Connections Program. By using the Co-op Connections Card, members have saved over $1.8-million on prescriptions alone since 2011, as well as saving on offers from over 135 local businesses. In fact, he said the program is now “ranked in the top 7” among co-ops in the U.S., thanks to the use of the card for prescription savings by MEC members.
Carlson spoke about the Western Competitive Solutions check distribution, which totaled over $5.3-million returned to members, and had a community-wide economic impact of at least three times that number. In March of this year, MEC formed a committee of community leaders to disburse unclaimed funds from that distribution, which totaled approximately $188,000. The intent was to award and distribute funding to various community and non-profit organizations. Carlson said 28 organizations applied for funding, 18 received consideration for sustainable projects, while 11 applicants were awarded funding.
Other topics covered include the investment into system improvements, especially cable injection in areas served with underground wires. Carlson explained in several areas of MEC’s service territory, the underground cable has deteriorated over time. Some of that cable is suitable for cable injection, a rejuvenation process that restores the cable to near new insulation levels. Another topic was the replacement of wood poles with steel, a $4-million project which reinforces the co-op’s existing lines. Ninety-five steel poles are now strengthening lines in the Mohave Valley and Golden Shores area. The improvement project will continue in areas of Willow Valley, Fort Mohave, and Bullhead City.