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Explaining the increase: MEC customers to see higher bills starting in January

November 30, 2018

BULLHEAD CITY — Starting in January, there will be a $7 increase on the average electric residential bill for Mohave Electric Cooperative members.

During a town hall meeting Tyler Carlson, chief executive officer at Mohave Electric Cooperation, said there were three events that led to the increase.

“The first event was when California announced that they were going to have an energy shortage and the market reacted to that,” Carlson said at a town hall meeting called by MEC at the Bullhead Area Chamber of Commerce. “The companies who sell electricity increased the price per megawatt from June to August in order to capitalize on the situation.”

Carlson said that MEC felt like it didn’t need to buy the higher-priced megawatts.

“We expected the market to settle back down since California has done these announcements before but the market came back down eventually,” said Carlson.

Carlson said the second event was when an issue in the as turbine peaking unit was discovered.

“If we connected the unit it would have caused a catastrophic failure,” said Carlson. “That specific unit we use only during the summer months

(during peak electricity usage) and we were out 35 megawatts. We had already financially secured the natural gas for the unit but we couldn’t use it.”

Carlson said the third event was one of the largest generators experienced a cooling leak which took it offline for about 48 hours.

“That’s when we asked all of our customers to lower their usage because we were going to experience a high-price event,” said Carlson. “Our customers came through to the tune of about 5 to 8 megawatts which helped us a lot because we didn’t have to buy those extra megawatts.”

Carlson said that the bottom line was that MEC had additional costs of $3 million to $4 million in the summer months.

In a prepared statement, MEC stated that the purchase power adjustor, required by the Arizona Cooperation Commission as a way to adjust for purchased power variances not included in the energy rate, has been at 1.5 cents credit per kilowatt-hour. The result of the increased cost will mean the credit will be reduced to 0.75 cents per kWh beginning in January, leading to an average increase of about $7 a month for residential customers.

“We don’t try to change that purchase power adjustor often,” said Carlson. “We try to set a glide path so we can keep the prices steady instead of going up and down every month. We are going to see this $7 increase for the next two years but if we get a lot of savings we might see it go back down.

“We still have the credit, it’s just a lot less,” he added.

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