Aug. 30--An 8.8 percent electric rate increase proposed by the management of Salt River Project could turn into a 2.6 percent decrease after management's proposal came under fire from a member of SRP's board of directors.

At a meeting of the board's Power Committee on Thursday, director Bill Arnett said the 8.8 percent hike may not be justified in a weak economy when many customers are struggling with their personal finances. He also said SRP could do more to cut its costs.

Following his comments, the committee asked SRP managers to present new options to the full board on Tuesday for eliminating or delaying the increase.

"When I went to the public meetings about this, everyone was expressing the idea that this might be something that SRP needs, but why are you doing it now?" Arnett said. "Everyone knows someone who is out of work. I thought, 'couldn't we save enough to postpone it to sometime in the future when the economy is a little better?'"

The current management proposal on the table contains three parts: an 11.4 percent base-rate increase to cover SRP's basic costs of doing business, a 2.1 percent increase to cover the cost of more renewable energy and other mandates and a 4.7 percent fuel-price decrease to reflect the lower cost of natural gas to run some of SRP's power plants.

The net result was the proposed 8.8 percent increase, which would take effect Nov 1.

SRP spokesman Scott Harelson said management will probably retain the renewable energy and fuel-price components in its new proposal but might eliminate or defer the base-price portion "if that is the board's wishes."

That would result in a net decrease of 2.6 percent, he said.

Arnett said he would like to postpone the increase forever, but he added, "we all know we can't do that. ... I just hope it would be a consensus of the board not to do this until we've had a chance to look at it more closely."

Arnett is uncertain if the majority of SRP board members agree with his position, adding that the members of the Power Committee "weren't anxious to say 'we agree.' But they did say 'let's do this (study deferring the increase)' ... I hope the full board will agree."

SRP is controlled by 15 directors elected by landowners who have the authority to raise and lower electric rates within SRP's territory. The Power Committee is composed of seven members of the board.

Because of its semi-governmental status, SRP's rates are not subject to control by the Arizona Corporation Commission.

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