SRP board approves rate hike
Raise of 3.7% for residents will fund new facilities

East Valley Tribune
FROM STAFF REPORTS
October 4, 2005

Salt River Project’s board of directors approved a rate increase Monday that will raise prices for residential customers by 3.7 percent effective Nov. 1.

SRP officials said the increase is needed to pay for capital investments in new and replacement facilities — power plants and transmission lines — needed to meet growing customer demand for electricity.

The action came even though SRP reported record net revenue in the fiscal year that ended April 30.

Rates for business customers will increase 1.9 percent, and the combination of residential and business rates increase will create an average price increase of 2.9 percent.

The residential increase is higher in an attempt to balance the project’s rate of return among various classes of customers, SRP spokesman Scott Harelson said. Despite the change, residential customers will still contribute a lower rate of return than business customers, he said.

With the price increase, the monthly bill for a typical residential homeowner using 1,155 kilowatt-hours of electricity a month will increase by $3.96, he said. But a scheduled decrease in the adjustment for fuel and purchased-power costs next month will offset some of the rate increase during the winter months, he said.

When adjusted for inflation, the new rates will be about 1 percent lower than they were in 2000, SRP officials say.

SRP is planning about $4.1 billion in capital expenditures in the next few years to meet customer power demands.

Among the projects are a coal-fired generating unit in Springerville, a natural-gas fired unit in Gilbert and a transmission line from the Palo Verde nuclear plant west of Phoenix through Pinal County to a substation in east Mesa.