Salt River Project, Arizona’s second-largest utility, has some big decisions to make later this week that could raise costs for its nearly one million customers, especially for those with solar.
On Thursday, SRP’s elected board of directors will vote on whether to impose a rate increase — its first such hike in 2.5 years — of 3.9 percent for all customers. SRP estimates the move would add about $4.60 to the average customer’s monthly utility bill.
That also includes raising the monthly service charge, which is a base-level fixed fee for each customer, from $17 to $20.
SRP representatives say the goal is to raise roughly $109 million in additional revenue each year, which would help cover the investments it has made in things such as improvements to the grid and acquiring a natural gas power plant.
During a meeting last Thursday, board member Keith Woods called the move “overly aggressive.”
“This is what’s going through my mind, is that we’re not just looking at a 3.9 percent increase but the additional $3 that we’re adding to the fixed cost, I’ve got issues with,” Woods said. “It’s a higher cost, especially impact, on the low-income user and people on fixed income like retirees.”
But the most controversial proposal would target only solar customers with an additional $50 fee.
For the roughly 15,000 existing solar customers in SRP territory, they could be grandfathered into their existing rates for 10 years or 20 years, depending on the board's decision this week.
SRP’s proposed solar fee is similar to the so-called "net-metering" debate in 2013, when the solar industry was in a bitter fight against Arizona Public Service Co.’s proposal for a similar fee of $50 to $100 on its solar customers.
The controversy drew attention from utilities nationwide where similar debates were taking place, and ultimately, the Arizona Corporation Commission allowed APS to impose a substantially smaller fee than requested: $5 on average.
But the solar industry’s fight this time around with SRP has been particularly challenging.
Unlike APS, the state’s largest utility, SRP is not regulated by the Corporation Commission, which means it doesn’t need the state’s permission to impose or change its fees and rates as it plans to do on Thursday.
