Salt River Project - Company Profile, Information, Business Description, History, Background Information on Salt River Project

SRP Corporate Offices
1521 North Project Drive
Tempe, Arizona 85281-1206

Company Perspectives:

The mission of the Salt River Project is to be the best water and power organization, dedicated to improving service, lowering costs, resource stewardship, and market focus through involved, change-oriented employees.

History of Salt River Project

The Salt River Project (SRP) calls itself a "major multipurpose reclamation project serving electric customers and water shareholders in the Phoenix area." More simply, it can be described as a water and electric utility. It consists of two organizations: the Salt River Project Agricultural Improvement and Power District, a political subdivision of the state of Arizona, providing electricity to the Phoenix area; and the Salt River Valley Water Users' Association, a private, nonprofit corporation, which stores and delivers water in a 240,000-acre service area in central Arizona. In 1996 SRP supplied 625,000 electric customers in the Phoenix area from its combined facilities, which included six hydroelectric plants and several smaller facilities on various canals throughout the area.

The Salt River Valley until 1900

The Salt River Valley, a half million acres of semidesert land, is located in Central Arizona. Around 200 B.C. the Hohokam built an elaborate system of canals to irrigate their corn and cotton fields from the waters of the valley's Salt and Verde rivers. Their efforts, however, were stymied by either periods of drought, which dried out the rivers, or times when heavy rains flooded their canals and washed away their desert homes. The Hohokam, along with other native Americans of the Southwest, vanished before the arrival of Columbus and left only vestiges of their culture, which was based on their canal-building technology. Their system of canals, however, was virtually the same system that the Salt River Project later developed in the region.

The first European settlements in the Salt River Valley began in the 1860s. In 1868 the first canal was built and was called the Salt River Canal. The site of this canal was in what is now the downtown area of Phoenix. By the spring of 1868 irrigation from this canal produced the first successful crops in the valley. As more settlers moved to the valley, more canals were built.

By 1888 more than 100,000 acres were being farmed. Problems with water rights, however, soon followed in the wake of this canal-building activity. Some canals were washed away by heavy rains since there were no storage sheds for excess water, and litigation took place over disputed water rights. Sometimes these disputes led to armed conflict. By the turn of the century, many began to leave the valley because of the water problems.

To stem the tide of people leaving and to resolve the issues raised by conflicts over water rights, a committee was formed at the turn of the century to report to the citizens of Phoenix on the feasibility of a reservoir for the rivers feeding the valley. They suggested that the reservoir be placed where Tonto Creek flowed into the Salt River (about 80 miles from Phoenix). Their recommendations required the raising of $2 million to $5 million in capital, but since Arizona was still a territory, it was not entitled to assume such a large debt from the United States government, and there were no private companies ready to offer the money.

The Formation of SRP: 1903 to 1917

In order to meet the rising demand for water development in the West, President Theodore Roosevelt enacted a Federal Reclamation Program on June 17, 1902. Under the act, money was raised by the sale of western lands and then loaned to a territory to help build a reservoir. The money would then be repaid by the revenues from the water and from power provided by the projects. Before the money was loaned, it was stipulated that all disputes would be resolved by a 25-man committee. Judge Joseph H. Kibbey led the way to the formation of the Salt River Valley Water User's Association--incorporated under the laws of the Arizona territory on February 7, 1903--and to building a dam that was first called the Tonto Reservoir and then the Theodore Roosevelt Dam (1961), which was completed and dedicated on March 18, 1911. The members of the association were area farmers.

All members of the association had equal rights to the water from the dam, and the costs of construction were also equally divided among the members. Assessments were equally divided regardless of the use or nonuse of the water. The Roosevelt Dam fed the system of canals that had been developed beginning with the Arizona Canal in 1883 and culminating with the development of the Western Canal in 1912 and 1913. Over the years improvements to the canal system were undertaken.

On June 25, 1904, the Salt River Project was recognized by the Department of Interior as the first reclamation project of the 1902 reclamation act. An agreement was signed with the association for a dam to be built at the mouth of Tonto Creek on the Salt River for an estimated cost of $2,700,000, which amounted to $15 an acre on the 180,000 acres that were covered at that time by the project.

In this early period of development, the landowners thought mainly of the need for water, but the U.S. Reclamation Service as early as 1902 realized the need for electric power as well. It recommended the construction of a 20-mile power canal installed with 300-kilowatt hydro generators. After it was constructed, most of the power from the generators was initially used for a cement mill built near the dam.

In 1917 the operation of the water system, called the Salt River Project, was turned over to the Water Users' Association. At the time the project consisted of the Roosevelt Dam, the Granite Reef Diversion Dam, irrigations canals, laterals, and ditches. One of the association's first steps was to obtain a hydroelectric generating plant in the eastern part of the Salt River Valley region. This unit helped the association pump more water and sell electrical power, in the process increasing its revenues.

Rapid Growth in the 1920s and 1930s

There was a greater need for both water and electricity as the valley's population increased and as the area's major businesses--copper, cattle, citrus, and cotton--began to grow. SRP responded to those needs. During the 1920s the company built a number of new dams. Mormon Flat Dam was built between 1923 and 1925. It was located downstream of Roosevelt Dam and formed Canyon Lake, where a generating station was installed. In 1924 the Horse Mesa Dam was built between the two existing dams. It formed Apache Lake. This third dam supplied power for copper mining operations in Miami and Globe, Arizona.

Stewart Mountain Dam was built between 1928 and 1930 to increase water storage capacity and improve electrical power generation. While the problem of sufficient water for agricultural uses was relieved during this period, the 1929 stock market crash and the banking crisis in 1933 caused a sharp drop in crop prices. After several difficult years, the farmers who made up the Water Users' Association were able to convince the federal government in 1935 to construct a dam to store the flood waters of the Verde River; by 1939 the project, Bartlett Dam, was completed. Although the federal government built the dam, SRP ultimately paid 80 percent of the total cost.

Financing for the next project, the Horseshoe Dam, was provided by the copper mining company Phelps Dodge. As an amenity for its role in building Horseshoe Dam, Phelps Dodge earned water credit to use in its Morenci mining operation. Horseshoe Dam was completed in 1946. Phelps Dodge later also financed the building of the Show Low Dam and the Blue Ridge Dam. Similarly, spillway gates built in 1949 resulted in a water credit arrangement with the city of Phoenix, which paid for the gates. These financial arrangements with industry and government enabled SRP to grow and serve its users.

In 1937, in order to provide electric power to thousands of customers, the Salt River Project Agricultural Improvement and Power District was formed as a political subdivision of the state of Arizona. The establishment of the district helped valley farmers after the Depression meet their financial obligations because they were then eligible through the district to refinance outstanding bonds at lower rates with tax-exempt, municipal bonds. That year the association transferred its rights, title, and interest in the Salt River Project to the district. The legal relationship between the two organizations would be redefined in 1949, when the district assumed responsibility for the construction, operation, and maintenance of both the electric and irrigation systems. The district then appointed the association to operate and maintain the project's irrigation and water supply. The Salt River Project thus became "one organization with two compatible business units."

Postwar Developments

The population in the Salt River Valley began to grow rapidly after the Second World War, and water distribution patterns began to change from agricultural uses to urban ones. Moreover, after the war the area experienced a drought that drained its stored water supply. Expecting that 90 percent of the valley would become urbanized by the year 2000, SRP sought new ways to manage water storage. One step was the development of underground water sources, which SRP began in 1948. In 1952 SRP entered into an agreement with the city of Phoenix to supply the city with its domestic water needs. The surrounding cities of Tempe, Glendale, Mesa, Scottsdale, Chandler, Peoria, and Gilbert entered into similar domestic supply contracts with SRP.

While SRP supplied only 12,400 customers with electricity in 1947, by 1988 there would be about a half million users. During the early 1940s SRP gained additional electric capacity by completing transmission lines from Parker Dam on the Colorado River to Phoenix. In 1952 the Kyrene Generating Station was built south of Tempe; it had a capacity to produce 300,000 kilowatts of electricity. In 1957 the Agua Fria Generating Station was built west of Glendale, and by 1984 it would generate nearly 600,000 kilowatts. These two stations met the needs of the eastern and western parts of the valley.

Population growth eventually made it necessary for SRP to look for sources outside the state for electricity. In 1961 it signed an agreement with the Colorado-Ute Electric Association to buy power from a generating station to be built in Hayden, Colorado. Power from this source began in 1965. SRP also entered into a partnership with five Southwest utilities to construct a generating station at Farmington, New Mexico, and participated in a consortium that developed the Mohave Generating Station, located in southern Nevada along the Colorado River across from Bullhead City. For the Navajo Generating Station in northern Arizona, built by a consortium in the early 1970s, SRP served as the project manager. In 1979 and 1980 SRP built four generating units at the Santan Generating Station near Gilbert in the southeastern section of the valley. It also opened two units at St. Johns during the same period.

Population pressures made it necessary to modernize the canal system. A program begun in 1950 and completed in 1974 allowed remote operation and monitoring of the canal gates and automatic gauging of water levels anywhere on the canals. In order to supplement its water sources in Arizona, SRP participated in the Central Arizona Project to deliver water from the Colorado River to the valley.

As population growth continued to accelerate in Phoenix and in the surrounding cities during the 1980s, SRP contributed to the Electric Power Research Institute (EPRI) to investigate ways to improve the production, transmission, distribution, and use of electric power. This institute, with 498 utility members nationwide, enabled members like SRP to benefit by sharing the costs of research that were beyond the means of individual local governments.

Besides its cooperation with other utilities in the United States, SRP, through its Office of International Affairs (established in 1984), held seminars and workshops for water officials from foreign countries. In 1982 it helped the Egyptian government rehabilitate their irrigation system. SRP also had an employee exchange program that was rated the top program in 1983 by the United States Agency for International Development.

The 1990s: The Roosevelt Dam Upgrade and Community Involvement

SRP was not given a specific role for flood control when it was established. Its water storage dams did not contain the structures needed for flood control and were able to release only small amounts of water from their bases. In order for large amounts of water to be released in a water storage dam, the spillways at the top of the dam had to be full. Even with these limitations, the dams of SRP helped curtail some major floods by carefully using the dams' runoff capabilities. In a project started in 1988 and completed in 1996, Roosevelt Dam was upgraded to store 1.6 million acre feet of water&mdash-ough to provide water for one million more residents in the Phoenix metropolitan area--and the new construction added to this early structure dedicated flood-control and dam-safety space. In addition, by this time SRP was receiving power from the Palo Verde Nuclear Generating Station, of which it shared ownership with several other utilities, including Arizona Public Service, which was another major Arizona electric utility.

SRP in the 1990s was also involved in community service, including a program to help combat hunger in the valley. Along with other organizations, SRP sponsored the Arizona Family Holiday Food Drive in 1995 and helped collect more than twice the goal it had established for the drive. Through its employee volunteer program, SRP participated in water-quality education for students, cooperated with several government agencies to help protect wildlife and the environment, initiated an exchange program for valley residents to change from gas lawn mowers to electric ones, and helped the arts by supporting local cultural organizations.

Principal Subsidiaries: Papago Park Center, Inc.

Additional Details

Further Reference

Ceniceros, Roberto, "Salt River Project Reviewing Risks as Utility Readies for Deregulation," Business Insurance, April 14, 1997, p. 128.Estes, Mark, "Adversaries Find Common Ground," Workforce, March 1997, p. 97.Loge, Peter, "PacificCorp Challenges APS, SRP," The Business Journal (Phoenix), March 10, 1995, p. 19."SRP Tapped as a Top Workplace," Business Journal, September 20, 1992, p. 2.A Valley Reborn: The Story of the Salt River Project, Phoenix, Arizona: Salt River Project, n.d.

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