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Xcel's Colo. unit proposes default time-of-use residential rates

In a Dec. 2 filing with the Colorado Public Utilities Commission, Xcel Energy Inc. subsidiary Public Service Co. of Colorado proposed adding default time-of-use rates for residential customers that would apply only during the summer months starting Jan. 1, 2021. Residents would not be converted to that rate structure, however, until after advanced smart meters have been deployed to their area.

On-peak pricing would apply only to customer usage between the hours of 3:00 p.m. and 7:00 p.m. on weekdays in the summertime, impacting 6% of residential sales, according to a chart that accompanied written testimony from Steven Wishart, a pricing and planning manager with Xcel Energy Services Inc. The utility projected that in 2022, "critical system hours" will shift up one hour from their current 2:00 p.m. to 6:00 p.m. period.

Average energy rates for on-peak usage would be about 18 cents/kWh, while shoulder — defined as 11:00 a.m. to 3:00 p.m. and 7:00 p.m. to 10:00 p.m. on summer weekdays — and off-peak usage would notch in at 13 cents/kWh and 9 cents/kWh, respectively.

Wishart recommended limiting the implementation of the time-of-use rates to the summer months to "minimize the potential bill impacts associated with the change by leaving the eight winter months and summer weekends essentially unchanged."

But Xcel Energy believes the proposed time-of-use rates will serve as price signals that "will encourage residential customers to shift their summer usage away from periods when demand for electricity is greatest, which is also when system costs as well as fossil fuel generation and associated [carbon dioxide] emissions are at their highest," Wishart noted.

That would push Xcel Energy closer to its target of an 80% reduction in carbon dioxide emissions from 2005 levels by 2030 and a 100% reduction by 2050, a goal the utility set in December 2018. It also would help "avoid or reduce the need for investments in peaking plants or potentially energy storage facilities in the future," Wishart said.

In September, Xcel Energy signed an agreement with Itron Inc., a smart technology products and services company based in Washington, to secure and install smart meters across its system over the next five years. A representative with Xcel Energy did not immediately respond to a request for comment or questions related to the initial pilot program.