BENSON — It’s time for a rate increase, said Sulphur Springs Valley Electric Cooperative’s CEO.

After 15 years since their rates last changed, rising material and power costs are driving their rate increase request this year, said Creden W. Huber.

SSVEC board of directors president Gene Manring, treasurer Pat English and Huber gave their annual reports to about 220 members at SSVEC’s 70th Annual Meeting on Thursday night at Benson High School.

SSVEC plans to file a rate case with a rate increase of 10 to 12 percent this summer. If the Arizona Corporation Commission approves the rate increase, it will likely take effect in late 2009 or early part of 2010.

To put the increase in perspective, Huber compared the cost of some goods in 1991, the test year for their last rate increase, to 2007.

“A new car went from almost $16,000 to over $23,000, or up 49 percent,” Huber said. “Ground beef is up 37 percent, bread up 70 percent and milk up 49 percent.”

Although SSVEC hasn’t increased its rates, rising costs of coal and natural gas have already been passed onto customers.

In the past three years, the Arizona Electric Power Cooperative Inc., which is SSVEC’s power provider, increased its rates by about 40 percent. Depending on usage, the average customer bill rose 24 percent as a result, Huber said.

SSVEC’s annual kilowatt sales have more than doubled since 1991 and the additional revenue supported their system growth. But material costs have risen significantly in recent years, largely due to increased global demand for concrete, steel, copper and electric equipment.

“In China, a new coal-fired plant with little or no environmental controls and large enough to serve the area of San Diego is built every seven to 10 days,” Huber said.

The costs of non-renewable energy equipment rose by 25 to 35 percent and the cost of a substation transformer has more than doubled since 2004, he said.

The SSVEC board has planned a $72.6 million work plan for the next two years to construct new infrastructure and replace outdated equipment, financed with a $70 million loan. The plan will depend on local growth.

“So if the economy continues to slow this work plan will stretch out into 2010 and beyond if needed,” Huber said.

But demand is expected to grow, Manring said.

“Over the next 20 years, electric utilities must increase generating capacity by 30 percent just to keep up with demand. The excess capacity we enjoyed for decades has been used up,” he said.

Last summer SSVEC reached its highest system peak at nearly 190 megawatts, almost double the 1998 peak.

“Our summer peak will continue to grow,” Huber said.

SSVEC will continue working to help consumers use less energy, with energy-efficient heating, ventilation and air conditioning equipment loans, rebates and other programs, Huber said.

Concerns about possible carbon tax legislation and revenue loss also were addressed at the meeting.

Last year SSVEC’s net profits were about $4.6 million. However, these gains did not come from its core business of electricity distribution, which had a net loss of about $900,000.

Manring encouraged members to advocate for balance as legislators consider a carbon fuel tax or carbon cap.

“Keeping electricity affordable and reliable is just as much in the public interest as mitigating climate change,” he said.

While the cooperative participates in renewable energy plans, Benson resident Marilyn Lawson said she wanted to know why wind energy wasn’t being pursued.

The possible rate increase wasn’t a surprise to her or Mary Anne Bernhardt of Sierra Vista.

“It’s like everything else, and we need the electricity,” she said.