Sep. 1--The Salt River Project board of directors voted Tuesday to defer any electricity rate increase to at least May after hearing complaints from customers about the project's proposed 8.8 percent increase to be effective Nov. 1.

At a special meeting Tuesday, the board voted unanimously to approve a series of recommendations from SRP's management that will have the effect of keeping rates steady until next year, if the various parts are given final approval in October.

"We will be looking at things that are positive for customers," said Fred Ash, an at-large member of the board.

The drive to re-examine the proposed rate hike was spearheaded by Bill Arnett, another at-large board member, who expressed reservations last week about increasing rates so much in the midst of a weak economy.

In July, SRP's management had proposed the 8.8 percent increase, saying the hike was needed to cover the construction of a new coal-fired power plant in Springerville and other operating expenses.

But at a series of public meetings in August and in letters and e-mail messages, SRP representatives heard an earful from irate customers unhappy about the increase.

At a subcommittee meeting of the board of directors last week, Arnett and other board members asked SRP's managers to present an alternative plan to the full board.

Under the rate schedule approved Tuesday, SRP would go ahead with a 2.1 percent increase for renewable energy and other mandated programs on Nov. 1. But Chief Financial Officer Mark Bonsall said that increase will be offset by a decrease in the price of natural gas used to run the project's fossil-fuel power plants. "The impact will be just about a net null," he said.

The third and largest portion of the rate proposal -- an 11.4 percent increase in the base rate -- would be deferred for further study under a separate rate-making process next year.

In an interview after the meeting, Bonsall said the size of that increase will probably be reduced, and further cuts in fossil fuel prices are expected next year as well.

"Clearly they (the board members) are looking to moderate the proposal," he said.

Meanwhile, SRP's managers will look for more ways to cut costs to reduce the size of any future increase, said spokesman Scott Harelson.

Tom Hogan, attorney for the Phoenix-based Center for Law in the Public Interest, who vocally opposed the proposed increase, called the board's action "encouraging."

"We knew from the beginning this proposal was troubled," he said.

Hogan added that "we're wasting time" if SRP doesn't reduce the size of its base rate increase next year. "But in the meantime rate payers are saving money. I can't complain about that," he said.

-----

To see more of The Tribune, or to subscribe to the newspaper, go to http://www.eastvalleytribune.com.

Copyright (c) 2009, The Tribune, Mesa, Ariz.

Distributed by McClatchy-Tribune Information Services.

For reprints, email tmsreprints@permissionsgroup.com, call 800-374-7985 or 847-635-6550, send a fax to 847-635-6968, or write to The Permissions Group Inc., 1247 Milwaukee Ave., Suite 303, Glenview, IL 60025, USA.

A service of YellowBrix, Inc.