Frequently asked questions about the pricing process

The approved changes will result in an overall net revenue change of 2.4%. This reflects an increase of $169 million in base revenue to support upgrades to the electric system and meet the cost of customer programs, among other things. This is partially offset by a decrease of $68.7 million in fuel and purchased power revenues, which are recovered through the Fuel and Purchased Power Adjustment Mechanism (FPPAM) rate.

Effective with the November 2025 billing cycle, the average residential customer using 1,117 kilowatt-hours (kWh) a month will see a monthly bill increase of 3.5%, or $5.61. Actual bill impacts will vary based on customer usage and price plan.

Your monthly service charge (MSC) is currently $20 (or perhaps $32.44 or $45.44 if you're a solar customer). Starting with the November 2025 billing cycle, your MSC will be based on which MSC tier you are in.

SRP will increase the Economy Price Plan bill credit for customers between 0%-150% of the Federal Poverty Level (FPL) from a $23 to $35 a month bill credit and expand eligibility for customers at 151%-200% of FPL, who will receive a $10 a month bill credit. These changes go into effect during the November 2025 billing cycle. SRP will also provide $5 million a year to support its bill assistance program, which is administered through Wildfire (Opens in a new tab) .

All existing plans will see a base rate increase effective with the November 2025 billing cycle. General Service plans will increase 2.7% and Large General Service plans will increase 4.4%. Additionally, plans will see a Fuel and Purchased Power Adjustment Mechanism (FPPAM) decrease of 1.4% for General Service Plans and 3.1% for Large General Service plans.

Rider changes

• Buyback Service Rider and Renewable Net Metering Rider: Index change and minor updates.
• Energy Attribute Certificate Rider: Make the "Renewable Energy Credit Pilot Rider" permanent and expand it to include other energy attribute certificates.
• Carbon Reduction Rider (New): Allow customers to participate in programs developed by SRP with respect to the purchase or retirement of offsets, allowances or credits associated with the reduction, removal, avoidance, capture or sequestration of carbon dioxide emissions.
• Standby Rider: Updates to be consistent with E-60s price plans pricing changes.

Your monthly service charge (MSC) helps cover the costs of customer service, billing and your connection to the grid. If you are a residential customer, your MSC is currently $20 (or perhaps $32.44 or $45.44 if you're a solar customer). Starting with the November 2025 billing cycle, your MSC will be based on which MSC tier you are in.

MSC Tiers

• Tier 1: If you're in a multifamily home (apartment, condominium, townhome), your MSC will be $20.
• Tier 2: If you're in a typical single-family home, your MSC will be $30.
• Tier 3: If you're in a home with a large electric service entrance, your MSC will be $40. About 3% of SRP residential customers fall into this category.

To learn which tier you might be in, view the MSC factsheet.

The MSC for commercial customers will not be changed regardless of the plan.

Customers with limited incomes can receive a monthly discount on their SRP electric bills through the Economy Price Plan. SRP will increase the Economy Price Plan bill credit for customers between 0%-150% of the Federal Poverty Level (FPL) from a $23 to $35 a month bill credit and expand eligibility for customers at 151%-200% of FPL, who will receive a $10 a month bill credit. These changes go into effect during the November 2025 billing cycle. This results in nearly 93% of customers on the Economy Price Plan receiving a bill decrease. When system capability allows, the bill credit will be a percentage of the customer's bill, based on the customer's household income. SRP will also provide $5 million a year to support its bill assistance program, which is administered through Wildfire (Opens in a new tab) .

For reference, see current plan.

Residential solar price plans (listed below) will remain open until the November 2029 billing cycle:

• E-13 Time-Use-Export Price Plan
• E-14 Electric Vehicle Export Price Plan
• E-15 Average Demand Price Plan
• E-27 Customer Generation Price Plan

For reference, please see current plans.

This proposal increases average residential bills by 3.5% ($5.61 per month), though actual impacts will vary by price plan and usage.

• 3.4% average increase ($5.51 per month) for residential customers without solar
• 5.5% average increase ($7.39 per month) for residential customers with solar

This proposal introduces two new time-of-use (TOU) plans, available to all residential customers, with 8 AM – 3 PM super off-peak prices that are more than 50% lower than basic plan prices, and designed to offer savings to customers who can shift energy usage:

Your monthly service charge (MSC), which helps cover costs of customer service, billing, and your connection to the grid, is $20.00 today (or perhaps $32.44 or $45.44 if you're a solar customer). This proposal includes a tiered MSC for all price plans:

• If you're in a multi-family home (apartment, condo, townhome), it stays at $20.00
• If you're in a typical single-family home, it is $30.00
• If you're in a home with a very large electric service entrance, it is $40.00. About 3% of SRP residential customers fall into this category.

This proposed change to the MSC is factored into the average residential bill increase of $5.61.

This proposal also includes an expansion to, and increase of, our limited income discount, making an estimated 100,000 + more customers eligible for a $25 a month credit through the Economy Price Plan. Learn more about the MSC and determine which Tier you are in, click here.

Under this proposal, to simplify our pricing, current TOU price plans will stop being offered to new customers and will be eliminated by November 2029. If you are on one of those plans, you can stay on that plan until it's eliminated, or you can switch to one of our two new options starting in November 2025. We will continue to offer our Basic plan (E-23) and M-Power plan (E-24).

Price changes:

• Changes to the monthly service charge
• Base rate increase

Plan changes:

• Hours updates to Business Time-of-Use (E-32) and Industrial (E-61, E-63, E-65, E-66 and E-67) plans
• Freezing Business Time-of-Use (E-33)

With the proposed introduction of new Time-of-Use (TOU) hours, SRP management is proposing to freeze certain price plans from new participation effective with the November 2025 billing cycle. Those frozen price plans will sunset, and remaining customers will be moved to a price plan indicated in the frozen price plan, or a plan of their choice no later than November 2029 billing cycle.

• The price proposal reflects, among other things, an increase in base prices to address expenses related to replacing aging infrastructure, adapting to an evolving power grid, and enhancing customer programs and services, while maintaining reliability and safety.
• SRP is also dedicated to providing additional assistance to lower-income customers, expanding eligibility requirements to reach more customers.

• SRP last conducted a pricing process in 2019. On March 25, 2019, the SRP Board of Directors approved an overall average annual price decrease of 2.2% that took effect on the May 2019 billing cycle.
• Unrelated to a pricing process, SRP's publicly elected Board of Directors recently approved an adjustment to the FPPAM rate that resulted in an overall 3.9% increase, effective Nov. 1, 2024.
• Other pricing adjustments may be perceived because energy prices are seasonal and change throughout the year.
• SRP offers a variety of energy efficiency rebates and resources to help customers lower their energy use and save money on their bills. Information on bill assistance programs can be found at srp.net/heretohelp (Opens in a new tab) .

• SRP recovers the costs of fuel and purchased power (including natural gas; solar, wind, and storage purchase agreements; and market purchases used to help maintain energy reliability) through a separate component of a customer's monthly bill based on energy usage, allowing for a direct pass through of those costs. Because fuel and purchased power costs fluctuate often, the Fuel and Purchased Power Adjustment Mechanism (FPPAM) allows for periodic price adjustments to ensure timely recovery of those costs.
• The FPPAM Balance: As of September 2024, the FPPAM balance was at a $230 million deficit; well outside of the plus or minus $20 million deadband established by the Board for consideration of changes. During the COVID-19 pandemic, SRP allowed the FPPAM balance to incur a significant deficit to maintain price stability for customers. SRP also forwent collection of the FPPAM balance in the amounts of $82 million in 2021 and $124 million in 2022 to reduce impacts on customer prices. At its low point, in the fall of 2023, SRP's FPPAM deficit was more than $500 million.
• Management recommends amending the methodology for the FPPAM to allow for time-of-use cost allocation and recovery across customer classes and price plans. The current FPPAM pricing methodology has a single FPPAM rate by season for each price plan, though there are slight differences between customer classes.
• As the grid and energy markets evolve to reflect more differentiated and granular hourly pricing, a time-of-use FPPAM rate will allow SRP to recover fuel and purchased power expenses more equitably from customers. Having time-differentiated prices in the adjustment mechanism more closely aligns revenue collection with costs and sends more appropriate price signals to customers. FPPAM will continue to be tracked as a pass-through and will include the same purchased power and fuel expenses previously approved by the Board.
• Furthermore, management proposes increasing the FPPAM deadband from plus or minus $20 million to plus or minus $50 million. Given significant growth in fuel and purchased power expenses since the FPPAM's inception over 20 years ago, as well as further growth projected in the coming years, the larger threshold is appropriate and may help to reduce divergences from the deadband.
• As a result of the November 2024 FPPAM increase, the balance is projected to be within the existing $20 million deadband by the end of 2025, enabling the FPPAM adjustments that Management is proposing.

SRP's average rates are among the lowest in the Southwest. The graph below demonstrates how SRP compares with other utilities in Arizona and several other states.

• SRP provides more than electricity. It was formed more than 100 years ago in partnership with the United States Bureau of Reclamation to build Roosevelt Dam and the system of canals to provide a stable water supply to the Valley. Today SRP operates the entire system of dams on the Salt River and Verde Rivers and manages groundwater supplies, providing water for municipal, irrigation and agricultural uses. In operating one of the oldest multipurpose federal reclamation projects in the U.S., SRP follows long-standing reclamation law that revenue from electric power operations be used to reduce water costs to the reclamation lands. In our desert environment, a reliable and low-cost supply of water is critical to the Valley's economy and overall well-being. A portion of SRP electric revenues that are available after the payment of operating expenses and debt service is used to provide financial support for SRP's water and irrigation operations.
• Now in its second century of operation, SRP will continue to be instrumental in the growth of the Valley by managing water sources and providing reliable, affordable and sustainable electricity.

• Since May 2019, approximately $2.6 billion has been spent on maintenance improvements and replacements of transmission and distribution equipment.
• SRP's power generating assets also require maintenance and improvements. From May 2019 to April 2024, approximately $660 million was spent on updating and improving our power plants. This spending was driven by Palo Verde Generating Station ($181 million) and Gila River Generating Station ($125 million).
• SRP has spent approximately $211 million on new customer metering systems since May 2019. These include meters for customer growth including solar growth, transitioning Elster meters to L+G meters, maintaining the current prepay solution until Central Prepay is implemented, and replacements for non-functioning meters to support daily operations.

SRP continues to focus on controlling costs in the areas of financing, operations and maintenance, and new capital expenditures while planning to meet future customer needs and while meeting our ambitious carbon reduction goals.

SRP management continually leads efforts to operate the business in the most cost-effective and efficient manner while meeting or exceeding annual objectives. These efforts have saved millions of dollars and include:

• Performing ongoing Investment Recovery activities including selling scrap metal, materials, and assets that are no longer needed for business activities. These efforts brought in over $14 million in revenue.
• Information Technology Services (ITS) has implemented cost controlling practices focusing on optimizing the management of IT assets and technology vendors. Since 2021, these efforts have resulted in over $30 million in cost savings or cost avoidance.
• Ongoing tracking and renegotiation of contracts related to meters has resulted in lower prices for two projects since 2021.
• 11 of 12 combined cycle gas units have been upgraded with enhanced turbine hardware, which has enabled improved emissions, increased unit capacity, and reduced heat rate/fuel cost.
• Developed, and utilized, asset optimization risk assessments to identify additional, low-risk, 69kV breaker preventative maintenance intervals that could be safely extended from 4 years to 6 years.

• In addition to optional pricing plans, which help customers manage their electricity bills, SRP offers a variety of energy efficiency rebates and resources to help customers customize their account, lower their energy use and save money on their bills.
• In fiscal year 2024, our Residential & Commercial Energy Efficiency programs provided customers with 603,751 MWh of energy savings.
• SRP also offers a variety of bill assistance programs and resources that can be found at srp.net/heretohelp. (Opens in a new tab)

• SRP offers rebates and discounts for residential and commercial customers on the purchase of energy-efficient appliances and home/building upgrades, including lighting, HVAC, insulation, duct test and repair, shade screens, new windows and heat pump water heaters, as well as offering instant rebates at srpmarketplace.com (Opens in a new tab) for products like smart thermostats and EV chargers.
• Savings advice and rebate information are available at savewithsrp.com (Opens in a new tab) for homeowners and savewithsrpbiz.com (Opens in a new tab) for businesses.

• SRP is currently experiencing changes driven by rapid economic growth, supply chain challenges, regulatory changes, climate change and the increasing momentum behind decarbonization and electrification.
• Given the rapid pace of change in the power industry, minimizing risk and meeting our customers' needs over the next decade will require a complete transformation of the SRP power system, including:
  • How, when and where we generate and store electricity
  • How we deliver electricity over transmission and distribution systems
  • How we engage with our customers through rate design and customer programs
• SRP is pursuing all options to ensure our customers have reliable, affordable and sustainable power in the coming years.

Responsible decarbonization is at the core of SRP's approach as we begin to realize the benefits of our industry-leading battery investments, new solar additions and more while ensuring a reliable and affordable power system.

• SRP's customers are currently being served by a diverse mix of renewable energy, including more than 1,400 megawatts (MW) of solar, nearly 300 MW of wind and 200 MW of hydro resources. SRP also has significantly more solar energy and storage capacity currently under development.
• SRP also has 1,300 MW of battery and pumped hydro storage supporting its grid.

• Originally approved in 2019, SRP's Sustainability Goals are designed to address the water and power needs of both today's customers and future generations. These goals are evaluated every five years to ensure they meet the evolving needs of the Valley.
• In March 2024, we established new, more ambitious targets, including a goal to reach net-zero carbon emissions by 2050. These goals include the following five focus areas:
  • Carbon Emissions Reductions
  • Water Resiliency
  • Supply Chain and Waste Reduction
  • Customer and Grid Enablement
  • Customer and Community Engagement

View SRP's Sustainability Goals in detail at srp.net/sustainability. (Opens in a new tab)

SRP is a political subdivision of the State of Arizona. SRP's publicly elected Board of Directors has the authority to establish electric prices. The Board reviews and decides upon any proposed changes to SRP's price plans after providing notice to customers and other interested parties and affording them the opportunity to provide comments to the Board.

No, SRP is a political subdivision of the State of Arizona, and therefore its prices are not regulated by the Arizona Corporation Commission (ACC).

SRP's Board uses the following principles when making pricing decisions:

• Cost Relation: Prices need to reflect the cost of service.
• Sufficiency: Prices are needed to maintain SRP's financial health.
• Gradualism: Changes should be evolutionary, not revolutionary (avoid large price adjustments).
• Equity: Have customers pay their share of the costs we incur on their behalf.
• Choice: Promote pricing options that help customers manage their energy costs.

SRP does not have stockholders or pay dividends. SRP is a community-based, not-for-profit utility. Revenues are reinvested back into our electric grid for the benefit of all customers.

As a community-based, nonprofit utility, SRP's communications, including paid media, are designed to educate and inform customers about a variety of topics, including ways to save energy; discounts and rebates; billing and payment programs; electric and water safety; water conservation; investments to improve reliability; and customer service enhancements.