Xcel electric settlement opening doors to more consumer choices
Both are part of a pending settlement between Xcel Energy and the Colorado Public Utilities Commission — an agreement that could ripple into other providers, such as Black Hills Energy.
Xcel, which sells both electricity and natural gas in Colorado, has more than 1.3 million electric customers in the state — as compared to Black Hills’ 94,000 electric customers in the Pueblo area.
The pending Xcel settlement is far-reaching and touches on many consumer issues — such as better metering for people who produce solar power and actually put electricity into the grid.
But the “time-of-use” rate plan and the ability for consumers to request that their power come from renewable sources are two important new pieces, according to Western Resource Advocates, a Front Range conservation group that helped draft the Xcel agreement.
“For residential customers, this will provide options they haven’t had before,” said Gwen Farnsworth, a Western Resource analyst.
She said the organization is also working with Black Hills.
The time-of-use rate is important because most residential electric customers are billed according to a flat rate based on an average cost of the electricity they use during the day.
Utilities generate electricity as needed so that during peak demand hours — say 2 p.m. on a blistering hot day — a utility is using all of its resources to provide power to air conditioners, and that surge in demand is the most expensive electricity it can generate.
During low-use periods, say after 9 p.m., the utility produces much less energy, and it costs less to do it.But for most utilities, the residential customer rate is that average that covers both extremes. The Xcel settlement will let customers take advantage of off-peak hours — after 9 p.m. and before 9 a.m. — and be billed at those lower prices.
“And it will be open to all (Xcel’s) residential users,” Farnsworth said.
Black Hills’ customers already have the more advanced meters that allow for time-of-use rates. Julie Rodriguez, a Black Hills spokeswoman, said large- and small-business customers in Pueblo already are offered a time-of-use rate.
The “renewable connection” plan is a dramatic step forward for Xcel residential customers who want to support renewable energy. Farnsworth said the pilot plan will allow as many as 10,000 Xcel customers select renewable energy for 100 percent of their electric power. Those customers will pay a higher rate for a period of time and have to commit to use that source for at least five years.
The goal is to guarantee there are customers as Xcel expands the amount of power it generates from wind turbines and solar arrays. State law requires that Xcel and Black Hills each provide 30 percent of their power from renewables by 2020.
“We believe that over time, those (renewable) customers will see a savings,” Farnsworth said. Xcel doesn’t begin to have the renewable capacity to allow all of its customers to switch to that program, but Farnsworth said the utility will invest in more if there is demand.
As for Black Hills, it has added wind farms and solar arrays to its energy portfolio and earlier this year offered a pilot program to let customers rent the power coming from a solar array east of the city.”