Xcel will implement the new “Time of Use” program
The company said customers can save money if they run large electrical appliances like air conditioners, dishwashers and washing machines during off-peak hours.
DENVER — Xcel Energy is rolling out a new program this spring that will charge residential customers in Colorado different rates depending on the time of day they use energy.
The company is transitioning to “Time of Use” pricing, which adjusts fares throughout the day between three different time slots. Customers using large electrical appliances during “peak” hours, from mid-afternoon to evening, will be charged the higher rates.
This only applies to electricity rates, not natural gas. The program only applies to residential Xcel customers, not commercial customers.
“We all come home, we all start using the electricity, and our peak time is around 6 p.m.,” said Hollie Velasquez Horvath, regional vice president of state affairs and community relations. from Xcel.
“As customers start to switch to electric vehicles and plug in their cars, if they switch to electric heat pumps, if they are going to switch from a gas stove to an electric stove, that really adds more to our system. .”
She said Xcel is thinking about how energy consumption and infrastructure will evolve in the future.
“As we grow, we hope our customers will help us reduce this consumption and perhaps start using their electricity differently. So we’re not building more generation to hit that peak, but maybe we’ve just stabilized usage, which then saves us from adding more generation to the system over time.
Xcel plans to switch all customers to the new rate plan by 2025, with the first batch of 310,000 customers starting in March. Customers will be notified of the change and will first receive a new electricity meter from Xcel – either a smart meter or a non-communicating meter.
Xcel outlined pricing and “time of use” hours on his website:
- Peak hours: Weekdays between 3 p.m. and 7 p.m., excluding public holidays.
- Mid-Peak Hours: Weekdays between 1 p.m. and 3 p.m., excluding public holidays.
- Off-peak hours: Every day before 1 p.m. and after 7 p.m. as well as weekends and public holidays.
Rates are calculated in ckWh, or “cents per kilowatt hour.” Depending on the season, fares during peak hours cost about 1.5 to 3 times more than off-peak fares. Rates are highest during the summer.
Xcel suggests that customers, whenever possible, run their dishwashers overnight and wash them on weekends. Velasquez Horvath says the biggest difference maker for customers under this plan will be their use of air conditioning in the summer.
“Our air conditioning in the summer is the biggest use of our electricity,” she explained. “So if we can encourage customers to cool their homes until around 1 p.m., then maybe [adjust] their degrees…a little, save a little bit on that AC use, until about 7-8pm in the evening, then maybe turn the AC back on – that’s the biggest savings for guests.
Xcel says it ran a “Time of Use” pilot program in Colorado before switching all customers to the plan. During this pilot, Xcel says most customers say their electricity bills stayed the same or even went down slightly.
Xcel will also offer an “Opt Out” program for customers who prefer to stay on a seasonal flat rate plan. But they encourage customers to consider trying the new system.
“I would say give it a try,” Velasquez Horvath said. “Try for a few months. When you get to “Time of Use”, see how you are using your energy. Try it for a few months. If that doesn’t work, that’s okay too. It’s really about giving customers choice.
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