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Xcel Energy plans to demand more electricity later this evening

Millions of Coloradans could soon pay more to use electricity later this evening under a proposal from provider Xcel Energy.

The state’s largest utility requested a change to time-of-use rates in early September. If state regulators approve the proposal, customers will pay the most for electricity on non-holiday business days, from 3 p.m. to 9 p.m. in the summer and from 5 p.m. to 9 p.m. in the winter.

The current “peak times” currently range from 3:00 p.m. to 7:00 p.m. all 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 make a final decision in February 2025, and the company could begin implementing the updated tariff plan as early as May 2025.

The Colorado Public Utilities Commission recently asked residents to attend a public hearing on the proposal on Dec. 17. Xcel Energy customers may also provide written feedback to the Commission using an online form.

Xcel Energy began transitioning its Colorado customers to time-of-use rates in 2022. The pricing plans are designed to encourage customers to use energy during times of lower demand and higher renewable energy production. For example, wind energy is often lost 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 just easier to understand. By setting higher rates for customers in the evening, the utility hopes to curb energy consumption at a time of day when solar energy production – along with the sun – tends to decline.

“We have found that after sunset, when solar generation is low, we use most of our fossil fuels, but customer usage remains relatively high,” said Tyler Bryant, a spokesman for Xcel Energy.

However, customers are already rejecting the proposal. In written comments submitted to supervisors, residents and business owners said it was inconvenient to cook or use a dishwasher after 9 p.m. If using energy at cheaper times does not make practical sense, several customers said the proposed time-use rates amount to a “money grab” in the face of rising energy prices.

Bryant told CPR News that the proposed changes would not allow the company to collect more revenue from energy consumers. However, it would reduce the cost of running the power grid.

Meanwhile, ratepayer advocates agree that Xcel’s proposal does not offer residents a reasonable way to save money.

“You can’t expect a customer to put off cooking on their electric stove until after 9 p.m. Maybe do dishes or do laundry, but it all becomes highly inconvenient,” said Joe Pereira, deputy director of the Office of the Utility Consumer Advocate.

Pereira’s office has also proposed an alternative tariff plan. To incentivize customers to use excess renewable energy, the plan would maintain the current usage schedule but add a “super off-peak” period of discounted electricity rates from 6 a.m. to 1 p.m. in the summer and from 6 a.m. to 3 p.m Rest of the year at 8:00 p.m. “Customers prefer cheap energy to expensive sticks,” Pereira said.

Western Resource Advocates, a climate change group, has presented a similar alternative plan to regulators. While the nonprofit reached an agreement with the company to move rush hour from 6 p.m. to 9 p.m., it would implement a “super off-peak hour” from 8 a.m. to 2 p.m

In written testimony provided to regulators, Clare Valentine, a senior policy adviser at the WRA, said the proposal would help reduce costs and greenhouse gas emissions. An Xcel Energy study found that by 2031, the utility will generate the greatest surplus energy in the morning and early afternoon. The “super off-peak” time would be around the same time of day.

“This period would indicate customers’ preferred time to use energy – when it is cheapest and cleanest,” Valentine said.

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