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Arizona, Politics

SRP Board Approves $1 Million Dollar Super Bowl Donation

Posted: January 8, 2013 at 5:00 pm   /   by

Investment, donation or ratepayer funded giveaway? You decide.

In a 13 – 1 vote, with one member abstaining, the Salt River Project Board of Directors approved their preliminary recommendation to donate $1 million dollars in cash and services to the non-profit Super Bowl Host Committee for the 2015 Super Bowl right here in the Valley.

In total, SRP will supply $225,000 in cash, $575,000 of in-kind services and another $200,000 in solar electricity for the game.

According to SRP, the in-kind contributions will include services such as printing, which will be conducted at their own printing shop.

It’s hard to refute the fact that the Super Bowl generates major dollars for the host state and local communities.  In fact, according to a study cited by the Super Bowl Host Committee, the 2008 Super Bowl in Glendale generated an estimated $500 million economic benefit for the state.

However, it should also be noted that the City of Glendale (which hosted the 2008 Super Bowl), actually lost money.  The city spent $3.4 million on city expenses related to the game, but only collected $1.2 million in sales taxes.  Additional costs such as police overtime and cleanup can often mitigate much of the economic impact for the local economy.

Whether the Super Bowl is an economic generator is not the issue at the heart of the problem for many.  For some, the concern is that SRP, like APS, is a public utility company that has a monopoly over a good portion of the state.  Still fresh in the back of many customers’ minds is the fact that SRP raised customers rates back in September 2012.

Beginning in November of last year, SRP raised rates 3.9%, an average additional cost of $6 per customer.  SRP claimed the increase was necessary to “pay for power-plant maintenance that has been deferred amid the economic slowdown, and a major $500 million effort to add pollution controls to the Coronado Generating Station in St. Johns.”  SRP had previously sought a higher increase of 4.8%.

In March 2010, SRP raised customer rates 4.9%.  And back in October 2008, SRP approved a 5.9% rate increase.

This isn’t the first time that APS and SRP, the state’s only two utility companies, have come under fire for spending ratepayer money on questionable promotions.  A FOX10 investigation found that in 2012,  SRP spent $4.2 million and APS spent $3.4 million dollars on advertising in the state.  The same investigation found that SRP spent another $1.8 million on sponsorships on items such as the SRP flag at Arizona Cardinals games.

Both SRP and APS have defended these types of expenditures, arguing that these campaigns are part of larger educational efforts that actually save ratepayers money:

“When we advertise about energy efficiency we’re not asking them to use more electricity, we’re asking them to use less electricity,” says Jim McDonald, APS spokesperson.

Some question the motivations behind these sponsorships, including House Democratic Leader Chad Campbell:

“I think its concerning when you have a company like APS or SRP that has a captive audience, no competition and they’re coming down to elected officials asking for a rate hike, then they turn around and use that money to self-promote themselves, I don’t understand what the end game is here and I think consumers should be very concerned about this.”

Others however, are even more pessimistic.  Diane Brown of PIRG, a public interest advocate group, speculates that  public utility companies look to public sponsorships in order to improve their image and community profile as they look to rate increases:

“Oftentimes the utilities want to make sure the public has a good feeling of them, particularly when they’re asking to increase rates, they want the decision makers to follow suit and if they hear from a lot of customers the decision makers may be less inclined to do so.”

But in the end, SRP stands by their decision.  Mark Bonsall, SRP’s General Manager and Chief Executive Officer, called it a smart business move.  According to Bonsall:

“It is not only the right thing to do, I think this proposal is a good business proposition for SRP and its customers as well.”

In the following video link, Bonsall went as far as to argue that SRP’s bottom line would be enhanced to the incremental tune of $300,000 as a result of all of the additional electricity consumed by out of town guests and festivities surrounding the Super Bowl.

Let’s hope both he and the SRP board are held to that assurance.  In the end, SRP ratepayers could be left holding the tab for a expense they didn’t order.

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SRP Board Approves $1 Million Dollar Super Bowl Donation