The Salt River Project Board today approved a price decrease that will result in lowering customer bills by an overall average of 1.1% beginning in May.
The pricing plan reduces two components of SRP’s electric prices and will be in effect for the six summer billing months in 2013, saving a typical residential customer about $1.72 per month.
One of the price components covers program costs related to meeting renewable-energy and energy-efficiency standards, and complying with environmental mandates. The second component recovers fuel costs incurred to generate electricity as well as power purchases to serve customer needs.
The costs of these two components to SRP are directly passed to the customer and are not marked up. They are included in the energy charge amount on the monthly bill.
The lower-than-expected costs, totaling $20.5 million, resulted from:
· higher-than-expected, year-to-date electricity sales to customers,
· cost savings from a short-term sale of energy from a geothermal plant,
· lower-than-anticipated program costs, and
· lower-than-planned natural gas costs.
The temporary price reduction also reflects SRP’s effort to achieve its Sustainable Portfolio goals at a lower-than-anticipated cost to customers. The SRP 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 10 percent of retail energy needs with sustainable resources, which include renewable energy, hydro power, conservation, efficiency and pricing measures.
SRP budgets for environmental and fuel/purchased power costs based on current and projected market conditions. Under a mechanism approved by the Board, SRP staff regularly reviews actual costs and may adjust the associated price components if funds are significantly over-collected or under-collected for the expenses.
SRP is the third-largest public power utility in the country, serving about 970,000 electric customers.