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Electricity costs are only going UP. Major Arizona Utilities Updates Here.

Guy Phillips

July 2012


How much are your friends still paying for electricity? For many people, it's the second largest expense right after their mortgage.


According to The Arizona Republic on April 6, 2012, Salt River Project is likely to increase rates in November 2012, as it projects a $17 million shortfall by May 2013 due to some repairs and maintenance needed at natural gas plants at Desert Basin, Kyrene and Santan. They're also planning to spend $25 on southeast Valley transmission projects this year.

SRP has hired a consultant to help them evaluate their electricity prices and options for a rate hike, according to CFO Aidan McSheffrey. McSheffrey said it was too early to project how much the increase will be. Technically the utility is "non-profit," so when its revenues are greater than its expenses, which has been the case for the last two years, SRP execs refer to it as "positive combined net revenues" rather than "profits."

In fiscal year 2011, the utility earned a $203.3 million profit, and an estimated $136 million in its most recent fiscal year which ended April , 2012.


May 16, 2012, The Arizona Republic reported that utility regulators had approved a "rate settlement" allowing Arizona Public Service Company to charge customers a fee to make up for lost profits when customers conserve energy. The rate hike on eco-conscious consumers will take effect July 1, and several small increases will follow.

The Arizona Corporation Commission voted 4 – 1 to allow what APS is calling a "lost-fixed-cost recovery mechanism" ("LFCR mechanism" for short) for maintaining transmission lines while receiving lower revenues from people who have adopted solar, upgraded appliances and made other energy-efficient changes to reduce their power usage. The ACC has mandated utilities to reduce energy sales by 22% by 2020, and APS feels it is suffering as a result.

The settlement will decrease rates by about 1% in July 2012 for base rates; however, increases will be seen after that, including a possible 3% rate hike they are asking for next year. APS had originally asked for a 6.6% rate increase across the board. Consumer groups including the AARP got involved and struck this deal. It is a "very constructive outcome," according to Jeff Guldner, APS VP of Regulation. The LFCR mechanism fee will be capped at a 1% rate hike per year, which is about $1.30 a month to the average residential customer. The fee will start April of 2013.


According to KGUN Channel 9 ABC affiliate in Tucson on May 7, 2012, TEP rate hikes just went into effect this summer in time for the heat. Joseph Barrios, TEPs media contact, said there was a surcharge approved about three years ago which had been offset up until now by a "purchase power and fuel adjustment credit," which has now expired.

Customers were paying about 8 cents per kWh (kilowatt hour) for their first 500 kWh of use. The new rate hike will add .08 cents per kWh.

Let us know how this is affecting your neighbors' actual electric bills, because according to TEP, the line item has been on your statements for three years, but because of the adjustment credit, has shown a $0 amount up until May.

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