Millions of Colorado residents could soon pay more to use electricity later in the evening under a proposal from provider Xcel Energy.
The state’s largest utility filed to change time-of-use rates in early September. If state regulators approve the proposal, customers will pay the most for power from 3 p.m. to 9 p.m. on non-holiday weekdays during the summer and from 5 p.m. to 9 p.m. during the winter.
The current “on-peak” hours currently stretch from 3 p.m. to 7 p.m. year-round. The company also charges slightly higher rates during “mid-peak” hours from 1 p.m. to 3 p.m., which would be eliminated under the new proposal.
State utility regulators expect to reach a final decision in February 2025, and the company could begin implementing the updated rate schedule as soon as May 2025.
The Colorado Public Utilities Commission recently encouraged residents to participate in a public hearing on the proposal on December 17. Xcel Energy customers can also provide written feedback to the commission through an online form.
Xcel Energy started moving its Colorado customers to time-of-use rates in 2022. The pricing plans are meant to nudge customers to use energy during periods of lower demand and higher renewable energy production. Wind energy, for example, often goes to waste at night, so a utility can operate more efficiently by encouraging customers to run dishwashers or charge electric cars later in the evening.
The company says the latest proposal isn’t only easier to understand. By setting higher rates for customers in the evening, the utility hopes to discourage energy usage at a time of day when solar energy production tends to drop — along with the sun.
“We found that we use the most fossil-fuel generation after the sun sets when solar generation is low, but customer usage remains relatively high,” said Tyler Bryant, an Xcel Energy spokesperson.
Customers, however, are already blasting the proposal. In written comments submitted to regulators, residents and business owners say it’s inconvenient to cook or run a dishwasher after 9 p.m. If using energy during cheaper periods doesn’t make practical sense, multiple customers said the proposed time-of-use rates amount to a “money grab” amid rising energy prices.
Bryant told CPR News the proposed changes would not allow the company to collect more revenue from energy users. It would, however, cut the cost of operating the electricity grid.
Meanwhile, ratepayer advocates agree Xcel’s proposal doesn’t offer residents a reasonable way to save money.
“You can’t expect a customer to hold off cooking on their electric stove until after 9 p.m. Maybe dishes or laundry, but it all becomes highly inconvenient,” said Joe Pereira, the deputy director for the Office of the Utility Consumer Advocate.
Pereira’s office has also proposed an alternative rate plan. To incentivize customers to use surplus renewable energy, the plan would maintain the current time-of-use schedule, but add a “super off-peak” period with discounted electricity rates from 6 a.m. to 1 p.m. in the summer and 6 a.m. to 3 p.m. during the rest of the year. “Customers prefer cheap energy over expensive sticks,” Pereira said.
Western Resource Advocates, a climate advocacy group, submitted a similar alternative schedule to regulators. While the nonprofit agrees with the company about shifting the on-peak period from 6 p.m. to 9 p.m., it would add a “super off-peak” period from 8 a.m. to 2 p.m.
In written testimony submitted to regulators, Clare Valentine, a senior policy advisor for WRA, said the proposal would help cut costs and greenhouse gas emissions. An Xcel Energy study found the utility will generate the most excess energy in the morning and early afternoon by 2031. The “super off-peak” period would align around the same time of day.
“This period would indicate the preferred time for customers to use energy — when it is cheapest and cleanest,” Valentine said.
