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.
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