Following an extensive three-month public process, Salt River Project’s publicly elected Board of Directors today approved changes in price plans effective with the April 2015 billing cycle that reduce a proposed 3.9 percent increase to 3.3 percent for the first full year it is in effect. The full 3.9 percent increase will take effect beginning April 2016.
Beginning with the April 2015 billing cycle, the monthly bill for a typical residential customer will increase by about $3.85 until April 2016, when that figure will then average $4.60. Even with the approved increase, SRP’s electric prices remain among the lowest in the Southwest.
The Board also approved a new price plan for residential customers who, after Dec. 8, 2014, add solar or other technologies to generate some of their energy requirements. The new price plan is intended and was designed that these rooftop solar customers – who choose to purchase less energy from SRP but still use and rely on the electric grid around the clock – pay their share of costs to maintain and improve the grid.
Management had proposed that existing solar customers be “grandfathered” from moving to the new price plan for a period of 10 years, but the Board today extended that by up to 20 years for SRP customers who installed rooftop solar units to run from the time the system was installed. The Board also voted to allow unlimited transfer of the grandfathering with the sale of the home for all rooftop solar customers. during that 20 year period.
“SRP will continue to support solar energy by seeking low-cost alternatives that provide maximum financial and reliability benefits for all of our nearly 1 million customers,” said Mark Bonsall, SRP’s general manager and chief executive officer. “Grandfathering continues this support for our existing solar customers, but the new price plan ensures that the cost shift to our 985,000 non-solar customers will not grow.”
The new self-generation price plan includes increased charges to better recover fixed costs related to the solar customer’s service facilities and their use of the grid, but also reduces the price the customer pays per kilowatt hour for energy.
According to Chief Financial Executive Aidan McSheffrey, a demand charge included in the plan is intended to provide the customers with the ability to manage their energy use so as to maximize their opportunity to save money.
“Rather than solve this cost shift with an additional fixed charge – which does not provide flexibility to save money – our new plan sends a price signal that incents more efficient installations by the solar industry and behavior by the customer that maximizes the value of their solar systems,” said McSheffrey.
SRP was able to minimize the approved price increase with more than $45 million in cost cuts by trimming operations, maintenance and capital expenditures.
As a community-based, non-profit public power utility, SRP’s revenues are reinvested back into the electric grid for the benefit of all customers. The last price increase was more than two years ago and since that time, SRP has invested more than $1 billion in its electrical system. However, revenues are not keeping pace with several higher-than-anticipated costs, McSheffrey said. The price increase will help:
• Maintain reliable electric service. SRP continues to modernize its electric grid (the system of power lines, generating stations and high-tech equipment) to safely and reliably deliver energy. This work includes replacing infrastructure, such as older power poles and underground power lines, and adding new technology to incorporate more renewable energy sources into the grid.
• Power a growing economy. Arizona’s economy is starting to improve, as evidenced by SRP customers setting two records for energy use this past summer. To meet increased power demand resulting from growth, SRP must invest in and build new infrastructure.
• Environmental initiatives. SRP has invested approximately $73 million during the past two years to add new environmental controls at key Arizona power plants. These upgrades are important, but they add significant expense to existing operations without creating additional power resources.
“Reliability is our most important product,” said McSheffrey. “To retain the level of service our customers have come to expect from SRP, we must continue to invest in modernizing our energy grid to adapt to new technologies – and that will improve reliability and allow for more customer choice.”
Also approved by the Board today is an option for SRP residential customers who own an electric vehicle that will allow them to choose a Time-of-Use price plan that will include a super off-peak period that encourages the charging of electric vehicles overnight when energy is available for a lower cost.
In addition, the Board approved a $3 increase to the monthly credit for low-income customers on the Economy Price Plan (EPP) from $17 to $20 during the winter months. EPP customers would continue to receive a $21 discount on their summer bills.
In light of the price increase, McSheffrey said SRP is committed to continuing its efforts to offer ways to help customers manage their energy use.
“SRP has 20 different residential and business customer energy-saving programs our customers can select from to help reduce energy use and save money on their monthly electric bill,” said McSheffrey. “Our optional Time-of-Use pricing plan is one of the largest in the country.”
SRP’s energy-saving website, www.savewithsrp.com, contains information about rebates and discounts, tips for saving energy and water, how to determine the right price plan, how to install programmable thermostats and reduce cooling costs by shading windows, and how to perform a home energy audit.
SRP is community-based, not-for-profit public power utility and the largest provider of electricity in the greater Phoenix metropolitan area, serving more than 1 million customers.
