Complaints register: SRP may modify rate plans

In response to protests from consumers, Salt River Project's managers are offering alternatives that would reduce their proposed 9.3 percent July and August electric rate increase.

Two alternatives announced Thursday would spread the rate increase over six warm-weather months rather than concentrating all of it during July and August - the two hottest months when demand for electricity is greatest.

The board, which requested the alternatives, is scheduled to consider the proposals on Monday. Any new rate plan approved by the board would go into effect May 1.

The new proposals, however, did not win the support AARP Arizona, which opposed the original plan.

"The alternatives are not significantly better and don't address our major concerns," said Janee Briesemeister, senior legislative representative for AARP Arizona.

"There are serious health consequences for people who can't afford adequate cooling in the summertime. We believe SRP can meet its need by spreading the increase throughout the year."

SRP managers originally proposed the 9.3 percent July/August increase because they said it would reflect the higher cost of providing electricity during the two hottest months, when more expensive generators have to be turned on to meet the higher demand.

That plan, which is still preferred by SRP's management, was defended as being the soundest business decision.

"There was public comment about the impact on the peak summer months but also ... they agreed with the philosophy of aligning revenue with the cost of service," said SRP spokesman Scott Harelson.

But the plan drew loud complaints during public hearings over the past two months that the rate shock would be too great during a time of year when electricity rates are already at their highest.

Under the initial proposal, the year would be divided into four rate periods, two more than the current winter-summer divide. During July and August, rates would be increased 9.3 percent over their current levels, which would add about $18.43 to the typical residential customer's monthly bill. During two "shoulder" seasons - May/June and September/October - rates would remain the same as current summer rates, and rates in the lower-priced winter season - November through April - would increase 2.3 percent.

The net result would be a 3.9 percent overall rate increase, which would produce an additional $91.1 million in the first year for SRP.

Under Alternative A, July and August prices would increase 8.2 percent, or about $16.28 each month, and the shoulder-season prices would increase .7 percent, or about 99 cents for each of those four months.

Under Alternative B, the July/August increase would be 6.7 percent, or about $13.36 per month, while the shoulder season rate would increase 1.7 percent - about $2.57 each month.

The 2.3 percent increase in the winter would remain the same in the two alternatives, as would the total annual revenue collected.

SRP managers also made proposals Thursday that would enhance programs to help low-income customers pay their utility bills.

The SRP board will consider the proposals at 9:30 a.m. Monday at the project's administrative offices, 1521 N. Project Drive, Tempe. The meeting is open to the public.