Proposed Environmental Programs Cost Adjustment Factor Budget for fiscal year 2019

The Environmental Programs Cost Adjustment Factor (EPCAF), implemented by SRP in November 2009, is used to track revenues and recover expenses relating to:

  1. Energy efficiency and demand reduction programs adopted by SRP;
  2. Renewable energy resources obtained or developed by SRP; and
  3. Improvements and initiatives that are not otherwise recovered through base prices that specifically relate to carbon dioxide emissions reductions as directed by the SRP Board, including, without limitation, those undertaken as a result of legislation or by regulation.

The EPCAF is a component of all SRP retail price plans. The Board approved temporary reductions to the EPCAF price in June 2016 and December 2016. These temporary reductions were adopted to balance the collection in the EPCAF, consistent with the terms of SRP’s price plans.

In November 2017, the EPCAF price returned to $.0055/kWh, and the $/kW charge under the E-27 and E-27P price plans likewise returned to the levels in effect prior to the first temporary reduction implemented in 2016.

The Board establishes each fiscal year's EPCAF expenditure budget on an annual basis. On March 13, 2018, management will present the following draft of the proposed EPCAF expenditure budget for the fiscal year 2019, which begins on May 1, 2018, to the Board’s Finance and Budget Committee. The proposed budget reflects an overall increase to the EPCAF budget of about $14.2M or 8.9% over the fiscal year 2018 EPCAF budget.

Specifically, Energy Efficiency expenses are proposed to increase by about $1.7M or 3.7%, and Renewable expenses are proposed to increase by about $12.5M or 10.9%. The Renewable expense increase comes from the geothermal and the solar purchase categories.

On March 27, 2018, the Board is expected to consider final approval of the EPCAF expenditures budget as part of the overall budget approval process. At this time, management is not recommending any changes to the EPCAF price for fiscal year 2019.

The proposed EPCAF budget (subject to revision during the Board’s budget approval process) is as follows:

Environmental Programs Cost Adjustment Factor (EPCAF)
Proposed Budget for Fiscal Year 2019 (May 1, 2018 - April 30, 2019)

Sustainable Portfolio FY19 Budget ($000)

Renewables
ASU Solar Demonstration Project 150
Solar Water Heating and Solar Payment Obligations 4,160
Demonstration Projects 30
Small Hydro 318
Wind Purchases 27,918
Geothermal Purchases 51,075
Renewable Energy Credit (REC) Purchases 700
Solar Purchases 30,853
Biomass and Other 11,220
Renewable Capital-Related Costs 1,121
Total Renewables $127,275

Energy Efficiency Programs
Residential 24,725
Commercial 21,913
Total Energy Efficiency $46,638

Total

$173,913
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