Salt River Project enjoyed a "solid" year financially, reporting $112.2 million in net revenue, or profit, in the fiscal year ended April 30.
That was a 140 percent increase over net revenue of $46.6 million in the previous fiscal year.
The financial results were included in an annual report released this week by the water and electric utility.
As a quasi-government entity, Salt River Project technically does not make a profit, but its net revenue — the difference between revenue and expenses — is often positive. Surpluses are reinvested in the enterprise, reducing the need to borrow, SRP spokesman Jeff Lane said.
The water side of the business, a relatively small sector compared with the electricity business, reported a slight decline in revenue in fiscal 2004 because of the continuing drought.
The improvement in SRP’s financial condition was caused primarily by continued customer growth in the project’s electric service territory and a relatively hot summer in 2003, which increased demand for electricity to run air conditioners, said Mark Bonsal, associate general manager of commercial and customer services.
The total number of customers increased 3.5 percent from the previous year, mostly in the residential sector, he said.
"What has been of interest is commercial and industrial growth that normally would go along with residential growth has been lagging," he said. "You would normally see them move in lockstep."
The commercial sector began to accelerate late in the fiscal year and has continued to grow this year as the Valley economy has turned around, he said.
The utility did not greatly benefit from low interest rates during the past year because SRP had already refinanced most of its debt before the fiscal year began, he said. But a rising stock market did improve the project’s ability to cover future pension obligations, which were underfunded prior to last year, he said.
Bonsal said fiscal 2005 so far has continued to be strong despite conservation by customers following a July 4 transformer fire that disrupted the ability of utilities to deliver electricity to their customers. SRP has been able to make up the difference by selling surplus power on the wholesale electric market at relatively high prices, he said.
A 1.5 percent electric rate increase scheduled to go into effect Nov. 1 is expected to generate about $25 million in additional revenue during the current fiscal year, he said.