The Salt River Project’s Board of Directors has approved a decrease in electricity prices for its more than 1 million customers. The Board decided to return the surplus monies to customers rather than spend the money on more environmental programs.
The temporary decrease is possible because the Salt River Project has been able to reduce expenses in two components of its electric prices.
The 10–month temporary decrease, effective with the January 2017 billing cycle, averages an overall 1.6 percent.
The decrease, the second decrease in less than a year, will save the typical residential customer just under a dollar per month during the winter billing months and around $2.50 to $3.50 per month when the summer billing season begins in May. Prices will return to original winter season prices approved in 2015 with the November 2017 billing cycle.
One of the price components – the Environmental Programs Cost Adjustment Factor, or EPCAF – tracks costs and revenues related to Salt River Project’s (SRP)’s renewable energy and energy-efficiency programs adopted to comply with SRP’s sustainable portfolio standard. The temporary reduction reflects SRP’s ability to meet its sustainable goals at a lower cost to customers.
SRP’s Board has set a goal to meet 20 percent of SRP’s retail electricity requirements through sustainable resources by the year 2020. Currently, SRP is ahead of schedule – providing more than 14 percent of retail energy needs with sustainable resources, which include solar, wind and geothermal energy, hydro power and energy-efficiency programs. The latest addition to SRP’s sustainable energy portfolio is an agreement to purchase the energy produced from Apple’s new 50-megawatt photovoltaic solar power plant located in Pinal County. SRP currently has 746 megawatts of renewable energy owned or under contract in its system.
The second component – the Fuel and Purchased Power Adjustment Mechanism, or FPPAM – recovers fuel costs incurred to generate electricity as well as power purchases to serve customer needs. Savings in this area are primarily because of lower-than-anticipated natural gas costs.
The costs of these two components to SRP are directly passed through to customers without any markup. SRP previously instituted a temporary reduction of 3.7 percent in the EPCAF and FPPAM for the 2016 July and August billing cycles.
The latest temporary reduction will decrease EPCAF and FPPAM revenue collection by about $40 million.