A History of Looking Forward - Salt River Project

MANAGEMENT’S FINANCIALAND OPERATIONAL SUMMARY A History of Looking ForwardOverview of BusinessThe Salt River Project Agricultural Improvement and PowerDistrict (the District) owns and operates an electric systemthat generates, purchases, transmits, and distributes electricpower and energy, and provides electric service to residential,commercial, industrial and agricultural power users in a2,900-square-mile service territory spanning portions ofMaricopa, Gila and Pinal counties, plus mining loads in anadjacent 2,400-square-mile area in Gila and Pinal counties.The District remains a vertically integrated organization. It isdeveloping additional generation, transmission and distributionresources to keep pace with load growth. The District buildsand acquires generation resources as needed and makesshort- and long-term purchases of wholesale power. Forexample, during the past fiscal year, a double-circuit 230- and500-kilovolt transmission line was energized. The 43-mileline, which stretches from north to south in the East Valley,will address future demand and system reliability. In terms ofgeneration, the District will purchase 20 megawatts of energyfrom the Copper Crossing Solar Ranch facility, which wasconstructed by Iberdrola Renewables.Indian Community and supplements the Gila County and SRPwater supply.The District’s subsidiaries include Papago Park Center Inc., whichmanages a mixed-use commercial development known as PapagoPark Center on land owned by the District and adjacent to theDistrict’s administrative offices; SRP Captive Risk Solutions Ltd.,which is a domestic captive insurer incorporated in January 2004to primarily access property/boiler and machinery insurancecoverage under the Federal Terrorism Risk Insurance Act of 2002TOTAL OPERATING REVENUE(in $millions)$2,767$2,762$2,739$2,702$2,630SRP manages a system of dams and reservoirs, and hasresponsibility for the construction, maintenance and operationof a supply system to deliver raw water for irrigation andmunicipal treatment purposes. It provides the water supply foran area of approximately 248,200 acres within the majorportions of the cities of Phoenix, Avondale, Glendale, Mesa,Tempe, Chandler, Peoria, Scottsdale and Tolleson, and theTown of Gilbert. C.C. Cragin Dam and Reservoir near Paysonis back in the water delivery business as a result of a four-year,$13.3 million renovation to pipelines and other infrastructure.The revitalized reservoir satisfies obligations to the Gila RiverFY07 FY08 FY09 FY10 FY11for certified acts of terrorism; and New West Energy Corp., whichwas used to market, at retail, energy available to the District thatwas surplus to the needs of its retail customers and energy thatmight have been rendered surplus in Arizona by retail competitionin the supply of generation but is now largely inactive.16SRP 2011 ANNUAL REPORT