MOHAVE ELECTRIC COOPERATIVE HOSTS TOWN HALL MEETINGS

Informational meetings are an opportunity for members to learn about the rate change process

Mohave Electric Cooperative has filed with the Arizona Corporation Commission (ACC) for a 3.79% change to base rate, MEC’s first rate change since 1991. During this time period, while members saw many years of rate stability, the number of meters grew by 36% and the miles of system infrastructure grew by 45%. The number of MEC employees taking care of the day-to-day operations of the Co-op decreased compared to 1991.

The non-profit rural electric cooperative’s rates cover the costs of doing business and are not marked up to make a profit. The most recent audited financials show MEC’s expenses at 103% compared to revenue, which indicates that rates need to change to keep the Co-op healthy.

The rate application includes a cost of service study conducted by a utility expert which is based on a test year of 2009. The objective of the rate making process is to establish rates that recover an appropriate and fair share of revenue requirement for each member.

Costs throughout the electric industry have skyrocketed in the past five years, especially the cost for wholesale purchased power which is the largest expense for the Cooperative.  Wholesale power costs typically range from 60%-80% of the revenue dollar for Arizona electric utilities, and are at 80% for MEC.

Other factors contributing to upward rate pressure are increases in transmission costs, regulatory mandates and requirements, and environmental requirements from state and federal agencies.

The cost of purchased power began its dramatic rise back in 2005. During the first three years of increases the Cooperative absorbed the higher cost by aggressive internal cost reductions.  As the wholesale power costs continued to rise, MEC began a pass through called the Purchased Power Adjustor (PPA) on member bills in 2008 to recover the expenditure for power costs. The proposed rate change transfers the 2009 rate year PPA into the new rate.

The rate design also encourages energy efficiency through an energy charge block rate that increases incrementally above 400 kWh and 1,000 kWh used. The average residential usage is 877 kWh at a cost of $107.96 based on the 2009 test year and $108.89 with the proposed rate changes.

Facing two decades of escalating costs ultimately means a rate change cannot be avoided; however, the Co-op’s Management works hard to fight rising costs and continually looks for ways to operate more efficiently and keep costs down.

Members can also help keep rates stable longer by taking steps to conserve energy. Every kWh the cooperative’s members avoid using is one the cooperative does not have to buy and deliver.

MEC’s website, monthly newsletters, and bill inserts provide many no cost/low cost ways for members to save on electricity and better manage their energy usage. Visit www.mohaveelectric.com and click on TogetherWeSave for interactive energy tips. Printed Energy Saving Guides are available at MEC’s Member Services Office, 928 Hancock Road, Bullhead City. MEC also offers a Budget Payment Plan to help members level out their payments over a 12-month billing cycle.

Mohave Electric will hold three Town Hall Meetings, one in each of three member districts:  August 16 at River Valley High School, August 18 at Mohave High School, and August 25 at Mohave Community College. All meetings begin at 6 pm. Information is included with all member bills in August and is available on the internet at www.mohaveelectric.com and www.azcc.gov  docket number E-01750A-11-0136.