The Salt River Project, a central Arizona public power utility serving almost a million consumers, already charges it’s customers higher rates in the summer, but they are proposing to increase their summer rates even more. The Arizona Republic reports:
Salt River Project wants to prompt more people to conserve during the hottest hours of summer by making it much more expensive to waste electricity when the mercury spikes.
The utility is proposing a rate increase that could have residential customers paying on average $18.43, or 9.3 percent, more on their July and August bills.
SRP wants to raise rates the most in the sweltering months that utilities are forced to import expensive electricity from as far away as the Pacific Northwest to keep the state powered.
SRP also proposes a new, optional, time-of-day plan that dramatically raises the price of electricity from 3 p.m. to 6 p.m. when demand spikes, as does the utility’s price for power bought on the open market.
Mark Bonsall, SRP chief financial executive, said, “We are trying to better align our prices with our costs of service so customers make the best economic choices they can make.” The newspaper noted that the other Phoenix-area utility, Arizona Public Service Co. also initiated rate increases this week.
The East Valley Tribune, a newspaper serving suburbs on the east side of Phoenix, added a few details:
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.
An increasingly sensible rate structure is step in the right direction, even if still far from the necessary “prices to devices” paradigm shift. At least SRP has time-of-use meters in place for some customers, which puts it ahead of many of the utilities in the country.
(SRP also provides a pre-pay option that tends to encourage consumer awareness of consumption and greater conservation. See Lynne’s post from last June for more information on the topic: Electricity Retail Choice: Pay-As-You-Go Service.)