Jeff Lane
SRP Media Relations
(602) 236-2500
Dec. 28, 2009
MEDIA ADVISORY
SRP Begins 2010 pricing process
Price increase proposal that was delayed being revised downward
Earlier this year, SRP delayed a price increase that was to begin this past November. Since the delay, SRP reviewed new economic and energy-use forecasts and made additional cuts to its expenses - cuts that now total more than $1 billion over the next two and a half years. This has reduced the proposed increase as well.
As a result, as proposed, a typical SRP residential customer on the Basic Price Plan using 1,216 kilowatt-hours per month could expect an average annual increase of about $5.95 per month. The proposal impacts all of SRP's standard price plans and adjusts various components of prices including the Environmental Programs Cost Adjustment Factor and the Fuel and Purchased Power Adjustment Mechanism, and would be effective with the May 2010 billing cycle, which for most customers begins during April. Management's proposal is an overall average price increase of 4.9 percent.
The proposed price increase is primarily related to the construction and operation of the new $1 billion Springerville Unit 4 power plant in northeastern Arizona, which began operating earlier in December. This baseload plant will serve SRP customers and replace the energy from a power plant in Nevada that was closed by its owners. Baseload power plants are designed to operate around the clock, 365 days a year.
Additionally, the increase is needed to pay for more than $500 million in additional emissions-control technology for the Coronado Generating Station (CGS) in St. Johns. The new environmental controls for CGS became necessary when SRP and the U.S. Environmental Protection Agency reached a negotiated settlement in 2008 to further improve emissions from the 773-megawatt plant.
According to SRP General Manager Richard Silverman, the lingering recession has allowed SRP to delay spending on new power infrastructure longer than originally predicted. Combined with efforts to trim operations, maintenance and capital expenditures, Silverman said SRP will save more than $1 billion over the next two and a half years. This includes replacing four customer offices with self-serve PayCenters, eliminating fleet vehicle replacement for two years and delaying employee pay raises. Silverman emphasized that cuts that would jeopardize SRP's reliability and award-winning customer service are not being made.
"Another priority is to help customers manage their energy bills in an era of rising energy costs," said SRP Chief Financial Executive Mark Bonsall. "SRP has expanded pricing options and energy-efficiency programs designed to save customers money and help meet their needs and lifestyles."
The optional SRP Time-of-Use (TOU) pricing plan is the third-largest in the country, and rewards customers if they can reduce or shift their energy use for up to eight hours on weekdays. A typical customer on this plan saves about 7 percent annually by shifting to off-peak energy use, Bonsall said.
For customers unable to use the TOU plan, an alternative pricing plan called EZ-3 will be available to all residential customers in January. Bonsall said EZ-3 requires reduced consumption between 3 to 6 p.m. on weekdays and is ideal for those who can significantly reduce electric use during the on-peak period in exchange for lower prices during the off-peak hours. Based on results of an earlier pilot, customers on the EZ-3 plan saved about 5 percent. Customers on the EZ-3 plan also will be assured of receiving a smart meter that provides detailed online information on how to manage their energy costs.
Bonsall said SRP customers may save even more by taking advantage of numerous energy-saving rebates and other offers. The SRP energy-efficiency program budget funds over 20 different residential and business customer programs. SRP's new 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.
The pricing process started today with the opening of the SRP Information Center, which will be open to the public on weekdays until May 3 from 8:30 a.m. to 5 p.m. at SRP's main administrative offices, 1521 N. Project Drive, Tempe. Information pertinent to the price proposal will be made available for inspection during those hours. The complete price proposal also is available for viewing at www.srpnet.com/priceinfo.
Comments can be submitted and more information will also be available at the January informational meetings.
The pricing process will include a series of public open houses in January and two special public comment sessions on Jan. 20 and 21. The dates and locations of the public open houses are:
Tuesday, Jan. 12
5 to 7:30 p.m.
Glendale Administrative Center
7650 N. 43rd Ave., Glendale
Wednesday, Jan. 13
5 to 7:30 p.m.
Southeast Regional Library
775 N. Greenfield Road, Gilbert
Thursday, Jan. 14
5 to 7:30 p.m.
Supai Middle School
6720 E. Continental Drive, Scottsdale
Tuesday, Jan. 19
5 to 7:30 p.m.
SRP Pinal Call Center
3735 E. Combs Road, Queen Creek
The public can directly address representatives of the SRP Board with comments and questions about the price proposal at the following open microphone meetings:
Wednesday, Jan. 20
6:30 p.m.
Sierra Vista Academy
7501 E. Oak St., Scottsdale
Thursday, Jan. 21
6:30 p.m.
Glendale High School
6216 W. Glendale Ave., Glendale
SRP's Board will meet to consider management's recommendation, input from the Board's consultant and afford the public the opportunity to comment at 9:30 a.m., on Feb. 11, at SRP's administrative offices, located at 1521 N. Project Drive, in Tempe. A final vote by the Board will be conducted at 9:30 a.m. on March 11 at the same location.
SRP is the largest provider of electricity to the greater Phoenix metropolitan area, serving about 935,000 electric customers in Pinal and Maricopa counties.
