Salt River Project is proposing a 4.8 percent increase in its electricity rates this fall, which would raise the average residential bill $7.14 per month.
The power and water utility last upped its prices in 2010 as it pledged to hold off on any increases for at least two years because of the recession’s impact on customers.
SRP is seeking the increase now because revenues aren’t keeping pace with growing expenses. Also, the utility can’t wait any longer to begin deferred maintenance projects at power generating facilities, said Aidan McSheffrey, SRP’s chief financial officer.
“These are sophisticated machines,” McSheffrey said. “Reliability is extremely important and we have to do the maintenance as needed.”
The power and water utility is seeking the increase to offset a projected $17 million loss. The rate hike would allow SRP to make $50 million in repairs to ensure reliability, invest $40 million in renewable resources and continue with $500 million of required environmental upgrades at the Coronado Station in St. Johns.
One factor that’s working in SRP’s favor is natural gas. Prices are down 2.4 percent, which helped the utility offset other rising costs.
The new rates would kick in Nov. 1 if approved by SRP’s board of directors. The utility has scheduled public hearings in August, and will collect comments by mail and feedback through www.srpnet.com. The utility’s board is scheduled to vote on the rate Sept. 27.
SRP is a not-for-profit utility, so any revenue in excess of expenses is reinvested.
As SRP seeks the rate increase, it is promoting efficiency programs and its two alternate pricing plans. About one-third of customers have enrolled in the plans, which are the third-largest programs in the nation. Customers who haven’t signed up so far could likely offset the projected rate increase, McSheffrey said.
“Our experience of a typical customer is they save up to 7 percent annually on time-of-use programs,” he said.
SRP’s rates are lower than most Southwestern utilities. Prices are lower than in southern California, New Mexico, the rest of Arizona and Nevada. If the increase goes into effect, the rate would move slightly higher than Nevada.
SRP is the Valley’s largest electric provider. It serves all of the East Valley except for the downtowns of Tempe, Chandler and Gilbert. Central Mesa is served by a city-owned utility.
Contact writer: (480) 898-6548 or ggroff@evtrib.com
American Socialist posted at 12:19 pm on Thu, Jul 12, 2012.
Do you actually expect us to belive this SRP??
Heres an article from last year when you tried this....
An activist group is asking Salt River Project to return $47.5 million in profits to customers and to review its rates to determine if a decrease is in order, considering the municipal utility's earnings in the past fiscal year.
SRP officials said they have considered the request but will not provide customers a rebate now because it could make the next rate increase at the utility larger. They said managers strive for "gradualism" in rate increases to minimize the shock to customers.
SRP reported that in the past May-to-April fiscal year, it earned a profit of $203.3 million
So let me get this straight...you somehow went from a 203 million dollor profit one year to a "projected" 17 million dollor loss the next??
This is a perfect example of a company backing consumers into a corner when they have no other alternitave.
Typical for this country, untill be refuse to accept this BS as "normal business practice"
Hotcopone posted at 1:03 pm on Thu, Jul 12, 2012.
American Socialist ... You hit the nail on the head.. beat me to it !! How do these utilities get away with such increases ??
I guess being an employee for this utility is wonderful. You can always bet you'll get a raise each and every year no matter what the economy is doing.
I still can't figure out why a utility needs to advertise and become sponsors at our expense? We don't have a choice in selecting utilities but yet they spend millions of our money advertising and wonder how many boxes they own for sports leagues?
kcdelmoe posted at 5:00 pm on Thu, Jul 12, 2012.
SRP SUCKS REAL PATHETICALLY!!!
If I had a choice who to get power from, it wouldn't be srp. Greedy blood-sucking corporation that they are.
mikefromaz posted at 6:55 pm on Thu, Jul 12, 2012.
The utility companies including SRP have been instructing consumers again and again on how to cut their electric bills through conservation. So lets say just for the sake of this discussion that consumers have followed their lead and brought their electric bills down..... Does that entitle the electric companies a rate increase? Whether nuclear or conventional fueled, l lower demand means LESS expense to the electric companies. They aren't willing to do as they preach, and assume that somehow because their plans worked that justifies a rate hike? Really? How about I turn on every light and appliance in my home 24 hours a day and then pay less for the product because I used more? Rediculous? Of course , but that is exactly what SRP wants to deliver less product and charge more? thiis not supply and demand folks, this is theivery in plain sight if they get away with it.
azguy99 posted at 8:34 pm on Thu, Jul 12, 2012.
Here is the nasty truth they will not say publicly. The more people conserve the higher your rates will be. Reason - their construction costs, maintenance, labor, financing, etc. are all fixed costs. They need a certain amount of cash flow to cover these costs and if you use less power they will eventually just charge you more for it to make up the difference. (kind of like property taxes - if values go down, somehow tax rates go up).
So while conserving is great for the environment...it will do your pocketbook no real good (unless you really commit to solar or something). Don't get me wrong - I am all for conservation for the very long term benefits. Just sick listening to these jerks who think they are pulling one over on everybody..
az2008 posted at 1:46 am on Mon, Jul 16, 2012.
I wish the Corporation Commission would exercise more due diligence with public utilities like SRP. It's a monopoly, and they use public easements and rights of way.
What I mean is, if this were truly a "free market," SRP would have had to negotiate property rights with every property owner ("willing seller") along the way. Instead, they negotiated with cities/counties for the use of public property (alleys, etc.) and covenants placed on privately-owned property. This was the right way to do it because it serves the public's interest. But, it wasn't intended to create a monopoly serving a captive market.
Decades ago, corporation commissions were much more aggressive auditing utility operations. After 30 years of deregulatory politics, all we've ended up with is a state-created monopoly conducting itself like a "free market" business meeting the needs of "willing buyers."
I'm old enough to remember when employees of public utilities were encouraged to drive an old beater to work. The utility was cognizant of the "optics" of a nice BMW, or loaded SUV parked in their parking lot. There were *real* repercussions to photos of cars like that parked in the employee parking lot. Utilities lived with that kind of caution. They next rate increase could depend upon something like that. The mere suggestion that they lived well (off a captive market) could have led the commission to squeeze them for more efficiency.
It's quite a contrast to today when SRP tosses money around on various self-ingratiating projects like advertising, or sponsoring charities.
The key here is for the Corporation Commission to return to its original charter and require utilities to conduct themselves prudently, in the public interest, as a humble steward of public resources which the utility has been given crucial access to (even ownership of, in the case of SRP and the water resources it owns).
After 30 years of deregulatory politics, everyone's afraid to suggest such regulation. All this talk about "public this," and "public that" sounds like "socialism." But, what can be more socialistic than to use government to give property rights to another, saving them from the expense of truly negotiating with a private-property owner as a "willing seller within a free market?"