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Xcel changes electricity prices for 310,000 Colorado residents, urging off-peak nighttime use

The company's "time-of-use" pricing system has three tiers depending on the time of day electricity is used

Xcel Energy’s Comanche Generating Station, a coal-fired power plant, produces electricity on Jan. 07, 2020.
Xcel Energy’s Comanche Generating Station, a coal-fired power plant, produces electricity on Jan. 07, 2020.

Colorado’s electric utility Xcel Energy has shifted 310,000 residents to a new “time-of-use” pricing system that pushes them to change their lifestyles — incentivizing electricity use at night instead of during peak daytime hours.

This is required for a collective shift off fossil fuel-generated electricity from coal-fired power plants — which worsens climate warming that leads to severe weather, fires and flooding — in favor of renewable wind and solar energy. Xcel relies increasingly on wind power that reaches transmission grids at night.

Xcel officials this week urged the following behavioral changes to contain bills:

  • Run dishwashers at night
  • Wash and dry clothing during the weekend
  • Bake major meals in ovens during the weekend, then during the week reheat food or make quick meals
  • Reduce air conditioning use during summer months by setting thermostats higher.

By 2025, all 1.5 million Xcel customers in Colorado will be billed using the new pricing system, utility officials said Tuesday.

“This is about planning for the future as we integrate more renewables into our systems. Wind blows at night. And the sun shines during the day,” publicly traded Minnesota-based Xcel’s regional vice president for community affairs and state relations Hollie Velasquez Horvath said.

“We have got to think about how we can partner with our customers,” she said. And so far “we have not seen a significant type of resistance.”

How have rates changed during the day?

Xcel will charge residents 17 to 28 cents per kilowatt hour of electricity during the peak period on weekdays between 3 p.m. and 7 p.m., according to company rate tables.

Electricity use after 7 p.m. and before 1 p.m. the next day will cost 10 cents per kilowatt hour.

A middle category for using electricity between 1 p.m. and 3 p.m. costs 14 cents to 19 cents per kilowatt-hour.

The current system charges flat rates of 12.5 cents per kilowatt-hour during winter and 13.6 cents during summer.

Consumer advocates in the past have raised concerns about economic impacts on low-income households where residents may have less ability to shift when they use electricity.

Why is this happening now?

Xcel officials say they’re trying to prevent overloads as they modernize their energy system toward a goal of carbon-free electricity in Colorado by 2050. They’ve committed to an 80% reduction in carbon emissions before 2030. They’re planning to close their Comanche power plant east of Pueblo, the largest coal-fired plant in Colorado, in 2034 with ramped-down operations in 2025.

At stake, officials said this week, is the amount of electricity Xcel would have to generate using natural gas, also a fossil fuel, as a bridge to cleaner sources. They’ve more-less ruled out nuclear energy, relatively clean, officials said, based on perceived U.S. public opposition.

For years, Xcel has been developing pricing incentives, and officials said that in pilot tests 18 months ago residents were able to save roughly $10 a month on their bills under the new system. Colorado’s Public Utilities Commission has approved the new pricing.

Which appliances use the most power?

Xcel teams have focused on major appliances that use the most electricity during the 3 p.m. to 7 p.m. peak hours. These include dishwashers, ovens, dryers, washing machines, and air-cooling systems.

Shifting from peak period to nighttime use of other electrical appliances — such as computers, lamps, fans and TVs – probably wouldn’t affect bills significantly, officials said. And reducing use of gas-powered appliances won’t make a difference.

Here are additional ways Xcel officials said customers could contain electricity expenses:

  • Install a programmable thermostat that automatically controls AC and heat
  • End AC use before 3 p.m.
  • Use small pans when cooking, ideally copper-bottom pans that heat faster
  • Defrost frozen foods before cooking
  • Grill meat outside using gas
  • Re-charge electrical vehicle batteries at night
  • Turn off computers and other electrical devices when not in use
  • During summer, close curtains and blinds to reduce heat in home
  • During winter, open curtains and blinds to increase heat during daytime and close them at night to contain heat.

Who is on the “time-of-use” pricing system?

The 310,000 residents shifted to the new pricing have had special meters installed — so-called “smart meters” — which directly convey how much electricity a household uses every 15 minutes. For residents who oppose having these meters installed, Xcel also offers a meter that requires utility crews to visit a home to measure use over the same 15-minute increments.

How do I know if I have a smart meter?

Xcel officials said residents are notified before their meters are upgraded.

When will my bill change?

They’re launching the new pricing gradually. Residents who had new meters installed in recent months won’t be billed under the new system until October. Others will shift next year. The first bills based on the new pricing are expected to reach customers after April 1.

Can I opt out of “time-of-use” pricing?

Opting out of time-of-use pricing is possible. Xcel rate schedules show that Colorado residents who reject the new system would be charged 12 cents per kilowatt hour during winter and 14 cents per kilowatt hour during summer.