In the midst of rising summer temperatures, SRP’s Board of Directors has approved an overall average 3.7 percent decrease in electricity prices for the two hottest months of this year that will save the typical residential customer about $7.60 per month, or about a combined $15.20 for the July and August billing cycles.

SRP’s publicly elected board made the decision during a special meeting on June 23. The measure is possible because SRP has been able to reduce expenses in two components of its electric prices.

One of the price components – the Environmental Programs Cost Adjustment Factor, or EPCAF – tracks costs and revenues related to 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 cost to customers that was lower than expected. SRP also instituted a temporary reduction of 1.2 percent in the EPCAF that began with the November 2015 billing cycle and ended with the April 2016 billing cycle.

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.

The temporary reduction will take effect with the July 2016 billing cycle, and will decrease EPCAF and FPPAM revenue collection by about $27 million. Prices will return to the original summer season price approved in 2015 for the September 2016 billing cycle.

According to SRP Chief Executive Officer and General Manager Mark Bonsall, management elected to propose reducing prices during the July/August timeframe because a decrease in the two hottest months of the year could provide relief for residential customers when it is needed most.

SRP is a 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. SRP also is the metropolitan area’s largest supplier of water, delivering about 800,000 acre-feet annually to municipal, urban and agricultural water users.