Capital Credits

Sharing the Benefits of Membership

What are capital credits?

The revenues from the sale of electricity are used to purchase wholesale power, pay operating expenses, make payments on outstanding loans, and provide a financial reserve as a condition of lenders. Any remaining funds are called positive margins. Capital credits are the accumulation of the Cooperative’s margins and MEC establishes a capital credits account for each member. Each year, the margins, if any, are allocated as capital credits to all members who purchased electricity during that year.

How are capital credits paid to members?

Once a year, the Board of Directors can vote to retire, or pay out, a portion of capital credits for a specific year or years, when doing so will not harm the Cooperative financially. Members who purchased electricity from MEC during those years are eligible to receive a prorated share of the retired capital credits. A question asked is, “Why can’t MEC pay all my capital credits at once?” MEC’s bylaws set forth a legal procedure for issuing capital credits. This procedure allows only a portion of capital credits to be retired so as not to harm the Cooperative financially. MEC may retain capital credits for a period of time in order to reduce the need for borrowed funds and the payment of interest expense.

How much do I get?

When the Board of Directors declares a retirement of capital credits, members may get a capital credits check or a credit on their monthly bill if they have active service with Mohave Electric. The amount returned to each member is based on a formula involving their capital credits balance, the amount available for retirement for the specific year or years, and the amount of revenue the Cooperative received from electricity they purchased that year. Former members are encouraged to notify MEC of their mailing address changes. By law, the Cooperative must mail out capital credit retirement payments to the last known address of the former member.

How long will I receive payments?

Capital credit funds accumulated in your capital credits account could be paid out to you for many years — even if you move away and no longer have active service with Mohave Electric. It is important that former members keep MEC informed of their current address in order to promptly receive capital credit checks when a retirement is authorized, and checks are mailed out. Capital credits can also be paid to estates of deceased members with proper documentation. The Board of Directors can approve payments to estates under conditions of early retirement.


2022 Capital Credits

Mohave Electric Cooperative’s board of directors has authorized a capital credits return of $802,440.55 to members in 2022. MEC members who had electric service in 2000 or 2021 will receive their share as a check if their share is $10.00 or more. If the share is less than $10.00, active service accounts will receive a bill credit on their August or early September bill cycle. The checks were mailed out during the second week of August.

“One of the benefits of being a member of Mohave Electric Cooperative is that members share in any margins earned,” said Ardie Lauxman, chief financial officer of MEC. “If MEC has a positive margin and meets our lenders’ requirements, the board of directors may vote, once a year, to retire, or pay out a portion of available capital credits to members.”

MEC CEO Tyler Carlson said, “This is the 76th year that MEC has been serving our community, and our decision to retire capital credits again this year aligns with the Cooperative objectives we’ve upheld since 1946.”

Since 2015, MEC has returned $10.9 million in capital credits to members. Lauxman explains, “MEC operates as a not-for-profit corporation. Revenues from the sale of electricity are used to purchase wholesale power, pay operating expenses, make payment on outstanding loans, and provide a financial reserve as a condition of lenders. Any remaining funds are called positive margins and are allocated to members as capital credits. Additional information on capital credits is available at MEC’s website mohaveelectric.com, click on member services, and capital credits.”

Abandoned Capital Credits

Mohave Electric Cooperative’s board of directors has authorized a capital credits return of $1,667,557.52 to members in 2021. MEC members who had electric service in 1989, 2000 or 2020 will receive their share as a check if their share is $10.00 or more. If the share is less than $10.00, active service accounts will receive a bill credit on their August or early September bill cycle. The checks will be mailed out during the second week of August.

“One of the benefits of being a member of Mohave Electric Cooperative is that members share in any margins earned,” said Ardie Lauxman, chief financial officer of MEC. “If MEC has a positive margin and meets our lenders’ requirements, the board of directors may vote, once a year, to retire, or pay out a portion of available capital credits to members.

MEC CEO Tyler Carlson said, “This is the 75th year that MEC has been serving our community, and our decision to retire capital credits again this year aligns with the Cooperative objectives we’ve upheld since 1946.”

Since 2015, MEC has returned $10.1 million in capital credits to members. Lauxman explained that MEC operates as a not-for-profit corporation. Revenues from the sale of electricity are used to purchase wholesale power, pay operating expenses, make payment on outstanding loans, and provide a financial reserve as a condition of lenders. Any remaining funds are called margins and are allocated to members as capital credits.

MEC’s board of directors has authorized a capital credits return of $1.3 million to members. MEC members who had electric service in 1988 or 2019 will receive their share as a check, or as a bill credit on active service accounts for amounts less than $10.00.

“One of the benefits of being a member of Mohave Electric Cooperative is that members share in any margins earned,” said Ardie Lauxman, chief financial officer of MEC. “If MEC has a positive margin and meets our lender’s requirements, the board of directors may vote, once a year, to retire, or pay out a portion of available capital credits to members.

Lauxman said checks will be mailed in June.

MEC CEO Tyler Carlson said, “We recognize the importance of retiring as much as we could afford to this year, as we try to help our members cope with the COVID-19 financial impacts.”

Since 2015, MEC has returned $8.5 million in capital credits to members.

Lauxman explained that MEC operates as a not-for-profit corporation. Revenues from the sale of electricity are used to purchase wholesale power, pay operating expenses, make payment on outstanding loans, and provide a financial reserve as a condition of lenders. Any remaining funds are called margins and are allocated to members as capital credits.

Additional information on capital credits is available at MEC’s member service office located at 928 Hancock Rd in Bullhead City, Az.

One of the benefits of being a member of Mohave Electric Cooperative is that you share in any margins that the Cooperative earns. We call your share of the margins “capital credits” because margins originate with what you pay, also called “capital,” to MEC when you buy electricity.

MEC’s member-elected Board of Directors authorized a capital credits retirement of approximately $1,722,313.15. This amount includes all capital credits remaining for 1987, and a portion of 2018, as well as Arizona G&T Cooperative capital credits for a portion of 2000.

The check enclosed represents your share of this capital credits retirement. You are receiving a capital credits check only for those years during which you had active MEC service. For example, if you had active service during any part of 1987, 2000 or 2018, you are receiving your share of retired capital credits for each of those years as one total amount; if you were a member in 2018, but not the other years, your check will include your share of capital credits for that year.

Mohave Electric Cooperative operates as a not-for-profit corporation and our rates are set to cover the cost of doing business, not to generate a profit. Money received from the sale of electricity to members is used to pay operating expenses, make payments on loans, and provide an emergency reserve. Any amount remaining is called margins, which is allocated to a capital credit account for every member based on the amount of electricity purchased. Capital credits reduce the need for borrowed funds and the payment of interest expense.

If MEC has a positive margin and meets our lenders’ requirements, the Board of Directors may vote, once a year, to retire, or pay out, a portion of available capital credits to members, but only if doing so will not harm MEC financially.

More information about capital credits is available at the Member Service Office at 928 Hancock Road in Bullhead City. Or call (928) 763-4115 and select option 4.

The Board of Directors, management, and staff put members first, every day. We are pleased to be sending this capital credits check to you, a demonstration of the advantage and power of your Cooperative membership.

One of the benefits of being a member of Mohave Electric Cooperative (MEC) is that you share in any margins that the Cooperative earns. We call your share of the margins “capital credits” because margins originate with what you pay, also called “capital,” to MEC when you buy electricity.

MEC’s member-elected Board of Directors authorized a capital credits retirement of approximately $1,462,825.08. This amount includes all capital credits for the remainder of 1985 and 1986, and a portion of 2017, as well as Arizona G&T Cooperative capital credits for a portion of 2000.

The check enclosed represents your share of this capital credits retirement. You are receiving a capital credits check only for those years during which you had active MEC service. For example, if you had active service during any part of 1985, 1986, 2000 or 2017, you are receiving your share of retired capital credits for each of those years as one total amount; if you were a member in 2017, but not the other three years, your check will include your share of capital credits for that one year.

Mohave Electric Cooperative operates as a not-for-profit corporation and our rates are set to cover the cost of doing business, not to generate a profit. Money received from the sale of electricity to members is used to pay operating expenses, make payments on any loans, and provide an emergency reserve. Any amount remaining is called margins, which is allocated to a capital credit account for every member based on the amount of electricity purchased. Capital credits reduce the need for borrowed funds and the payment of interest expense.

If MEC has a positive margin and meets our lenders’ requirements, the Board of Directors may vote, once a year, to retire, or pay out, a portion of available capital credits to members, but only if doing so will not harm MEC financially.

More information about capital credits is available at the Member Services Office at 928 Hancock Road in Bullhead City. Or call (928) 763-4115 and select option 4.

The Board of Directors, management, and staff put members first, every day. We are pleased to be sending this capital credits check to you, a demonstration of the advantage and power of your Cooperative membership.

One of the benefits of being a member of Mohave Electric Cooperative is that you share in any margins that the Cooperative earns. We call your share of the margins “capital credits” because margins originate with what you pay, also called “capital,” to the Cooperative when you buy electricity.

Mohave’s member-elected Board of Directors authorized a capital credits retirement of approximately $1,539,589. This amount includes all capital credits for 1984 and a portion of 1985 and 2016, as well as Arizona G&T Cooperative capital credits for a portion of 2000.

The check enclosed represents your share of this capital credits retirement. You are receiving a capital credits refund only for those years during which you had active Mohave Electric service. For example, if you had active service during any part of 1984, 1985, 2000 or 2016, you are receiving your share of retired capital credits for each of those years as one total amount; if you were a member in 2016, but not the other three years, your check will include your share of capital credits for that one year.

Mohave Electric operates as a not-for-profit corporation and our rates are set to cover the cost of doing business, not to generate a profit. Money received from the sale of electricity to members is used to pay operating expenses, make payments on any loans, and provide an emergency reserve. Any amount remaining is called margins, which is allocated to a capital credit account for every member based on the amount of electricity purchased. Capital credits reduce the need for borrowed funds and the payment of interest expense.

If the Co-op has a positive margin and meets our lenders’ requirements, the Board of Directors may vote, once a year, to retire, or pay out, a portion of available capital credits to members, but only if doing so will not harm the Cooperative financially.

Mohave Electric’s Board of Directors, management, and staff put members first, every day. We are pleased to be sending this capital credits refund check to you…a demonstration of the advantage and power of your Co-op membership.