If you live in Phoenix and don’t pay Arizona Public Service (APS) for electricity, chances are you’re an electricity customer of Salt River Project (SRP): this public utility company, which also supplies water, delivers electricity to more than 1 million customers in the region.
Many electricity customers throughout the country receive their electric bill every month and pay it without really diving into the details of what they’re actually paying for…and we’re here to help break it down. In this article, we’ll review the most important parts of your APS bill, and how that changes once you install solar panels.
- Your SRP bill includes charges for electricity supply, transmission/distribution, and miscellaneous charges
- SRP offers a variety of rate plans, including fixed-rate, EV, and time-of-use (TOU) plans
- Compare quotes on the EnergySage Marketplace to see how much you can save on your SRP bills with solar
How SRP calculates your monthly electricity bill
There are two important factors in determining how much you’ll owe on your electricity bill: your electricity usage and your rate plan/schedule.
How much electricity you use in a given month is calculated in kilowatt-hours (kWh). This number may change significantly from season to season based on your consumption habits – many people use more electricity during summer months when they run their air conditioning units, and will see lower electricity bills during colder months. It’s important to keep track of how your monthly electricity usage changes over time, rather than just looking at the overall cost of your bill. Seeing that your electricity bill is increasing because of an uptick in consumption (which you can control), rather than due to a change to utility rates, gives you the opportunity to change your electricity usage habits and save money.
Next up, rate plans: you may or may not know which rate plan you’re on (or even that you have the opportunity to change it). Many utility companies have default rate options for their customers that remain in place unless you proactively request to be on a different rate.
SRP offers plans that not only vary in pricing, but in structure: two of the most common types are a fixed-rate plan and a time-of-use plan.
If you’re on a fixed-rate plan (e.g., Basic, E-23), you’re charged a fixed rate for each kWh of electricity you use. However, your rate can increase in the summer if your usage exceeds certain levels.
SRP’s time-of-use (TOU) plans (e.g., TOU, E-26), on the other hand, charge a different rate for electricity depending on the day, time, and season. This type of rate structure is called a “time varying rate”, since the cost of electricity varies based upon the time that you use it. You can benefit from lower rates during times when demand for electricity is lower (morning and late at night), but pay more during “peak hours” when demand for electricity is high (evening hours).
Lastly, if you own an electric vehicle, SRP offers an EV rate plan (e.g. E-29). These plans encourage EV owners to charge their vehicles overnight when the overall demand for electricity is low. You can save a lot of money by charging your car during these off-peak hours, as opposed to during the day or immediately after work when rates are at their highest.
For more information on SRP’s current plan offerings, visit their website.
Types of electricity bill charges
Electricity bills often have a lot of confusing terms and line-items, making it difficult to identify the all-in rate you’re paying for electricity. However, SRP’s bill is relatively simple to breakdown, with fewer line item charges than many utility companies – you can find all of your electricity charges in the “Account Summary” section of your bill. In general, what you pay for electricity can be categorized into three separate buckets: supply, distribution/transmission, and miscellaneous. These rates cover the electricity you use, getting the electricity to your home or business and any other charges and fees related to the maintenance of the grid.
It’s easiest to think of supply charges as paying for the actual electricity you use. SRP includes these charges in any of their line items with an “Energy Charge” label. Utilities across the state of Arizona and the country charge different amounts for electricity supply depending on the power plant it comes from and the cost of the fuel (i.e., coal or natural gas). Supply charges also vary by season, with higher rates typically occurring in the hot summer months when demand for electricity is higher.
Distribution and transmission
Distribution and transmission charges, sometimes referred to as delivery charges, are the fees from SRP to send you the electricity. The utility company uses these charges to build and maintain the poles and electrical wires that deliver electricity from power plants to your property. You can think of the delivery charge as effectively the same as paying for shipping and handling for any product you buy online.
Like with SRP’s supply charges, distribution and transmission charges are rolled into your generic “Energy Charges.”
In addition to paying charges for electricity supply and demand, utility companies often include a number of miscellaneous charges included on their bills. Sometimes, these charges are a fixed amount unrelated to how much electricity you use, while other times they’re presented as a volumetric rate, where you pay more each month based on how much you use. Some examples of this on an SRP bill are the “Monthly Service Charge,” which is a fixed monthly charge that all residential SRP customers need to pay.
What will my SRP bill look like after going solar?
After you install solar panels, you will continue to receive your monthly electricity bills from SRP. Each monthly bill will include a summary of the amount of electricity you purchased (i.e., how much electricity SRP delivered to you from the grid) and the amount of electricity you delivered (i.e., how much solar electricity you exported to the grid).
Importantly, SRP bills for solar customers can vary greatly depending on the rate plan you opt-into. Below, we’ll dive into the details of SRP’s solar rate plans: export price plans (TOU and EV), average demand, and customer generation.
Export price plans (TOU & EV)
After going solar, many SRP customers switch to an export price plan. Export price plans, unlike other options from SRP, do not offer net metering: instead of tracking your net energy usage from the grid, SRP will separately track how much electricity you send to the grid, and credit you for exports (rather than crediting or charging you based on your “net” usage).
If you choose SRP’s export plan, your bill will include a summary of the electricity you purchased in separate TOU buckets: on-peak, off-peak, and for EV-plan customers, super off-peak. This is the amount of electricity you purchased during each time period over the course of a month. Below each of these, you’ll notice a separate “Export kWh” line item, which details how many kWh you send–or “export”–to the grid.
You will receive a bill credit for your exported kWhs, which SRP will subtract from your electricity bill. SRP credits each kWh at the same fixed rate: as of July 2020, the fixed export rate is 2.81 cents per kWh.
Average Demand & Customer Generation
Unlike SRP’s export rate plans, the utility’s Average Demand and Customer Generation plans allow for net metering, meaning you’ll receive either charges or credits based on your net usage from the grid. If you use more electricity than your solar panel system generates, you’ll owe SRP for that electricity. Alternatively, you’ll receive electricity credits if your solar panel system generates more electricity than you used. Importantly, your bill credits will be separated and tracked by peak period, meaning net metering credits that you earn during off-peak periods can only be credited towards kWhs you use during off-peak times.
Outside of net metering, another major differentiator between these plans and export offerings is that you’ll need to pay demand charges. This means that SRP will charge you a fee each month based on the maximum amount of grid electricity you used at a given point in time.
Between these two options, the Customer Generation Plan offers lower rates for the electricity you buy from SRP. The biggest difference between the two is the demand charge you will be subject to: those on Customer Generation Plans have a demand charge based on their maximum demand over the course of a billing period, while customers on Average Demand pay a per kilowatt (kW) demand charge based on their average demand over the billing period.
A note about your Monthly Service Charge
Once you go solar, you’ll notice your Monthly Service Charge change – SRP charges a different monthly service charge depending on which solar rate plan you choose. Keep this in mind as you compare one plan versus another.
Save on your SRP bill with solar
Want to see how much you can save on your SRP bill with solar? On the EnergySage Marketplace, you can receive up to seven quotes from local Arizona installers to compare. These quotes provide custom savings estimates based on your electricity usage, the rate you pay, and the solar potential of your property. If you’d like to start out with a rough estimate of solar costs and savings, try our Solar Calculator.