The management of Salt River Project is proposing a 3.9 percent electric rate increase, which, if approved by SRP’s board of directors, would raise the average homeowner’s monthly bill by $3.99.
The plan calls for the increase to go into effect May 1.
SRP officials said the hike is needed to pay for higher fuel costs and for building new transmission lines and power plants to meet increased demand for electricity.
“We have seen a little backing off recently, but not much,” said chief financial officer Mark Bonsall, referring to the utility’s growth rate. “Arizona doesn’t slow down a lot.”
SRP’s last rate increase was 2.9 percent in November 2005.
SRP has been adding between 25,000 and 30,000 customers annually in its service territory and expects to have more than 1 million customers by 2010, said Aiden McSheffrey, manager of corporate pricing. Electricity usage is growing about 3.5 percent a year, he said.
SRP plans to spend $7 billion during the next six years on new generating plants and transmission lines to serve new customers and replace old facilities, Bonsall said. Also, natural gas, a clean burning but relatively expensive fuel, is becoming a larger part of SRP’s fuel mix, causing the utility’s overall fuel costs to rise, he said.
The expansion in electricity usage is coming despite SRP programs to encourage conservation.
As part of the new rate plan, SRP’s managers are proposing new seasonal rates that will feature higher prices in the hottest months of July and August to encourage conservation then and lower rates in May and June, September and October. Also they are proposing a new time-of-use program that would have the highest rates from 3 p.m. to 6 p.m.
Rate increase hearings
Feb. 5: Residential and small business customer meeting. Held from 6 p.m. to 9 p.m. at Supai Elementary School, 6720 E. Continental Drive in Scottsdale.
Feb. 13: Residential and small business customer meeting. Held from 6 p.m. to 9 p.m. at Southeast Regional Public Library, 775 N. Greenfield Road in Gilbert.
Feb. 13: Commercial customer and stakeholder meeting. Held from 9 a.m. to 4 p.m. at SRP Project Administration Building Mohave Room, 1521 N. Project Drive in Tempe.
Feb. 13: Residential and small business customer meeting. Held from 6 p.m. to 9 p.m. at Copper Basin YMCA, 28300 N. Main St. in Queen Creek.