SRP’s publicly elected Board of Directors approved an increase to the Fuel and Purchased Power Adjustment Mechanism (FPPAM) rate that will result in an overall 3.9 percent increase, effective Nov. 1, 2024. While bill impacts will depend on actual per kWh usage, residential customers will experience an average increase of 3.2 percent.
FPPAM is the rate that SRP charges to recover the costs of fuel, including natural gas; purchased power agreements, including those for solar, wind and storage; and market purchases used to help maintain energy reliability. These costs are passed through to customers without any markup.
SRP’s goal is to keep the FPPAM balance at zero, meaning it is not intended to over-collect or under-collect for its anticipated fuel and purchased power costs. However, during the COVID-19 pandemic, SRP allowed the FPPAM balance to be significantly under-collected to maintain price stability during that time. SRP also forwent collection of $82 million in 2021 and $124 million in 2022 of the FPPAM balance to reduce impacts on customer prices.
While the company increased the FPPAM rate last year, as of July of 2024, the under-collected fuel and purchased power balance was more than $300 million. This latest FPPAM rate change is expected to allow SRP to fully recover this amount in 18 months.
The change will go into effect in November after the summer season. The average residential customer using 1,169 kWh/month will experience a bill increase of $4.93 a month.
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 other bill assistance programs can be found at srpnet.com/heretohelp.
