COLORADO NEWS

Colorado residents face new reality: Paying more for energy during peak hours

Jun 26, 2024, 7:23 PM | Updated: Jun 27, 2024, 12:55 pm

With the recent heatwave in Colorado, are you running your air conditioning on the ‘morgue’ setting? Well, if you do, you’ll pay more during peak times.

Xcel Energy has implemented a new program that will adjust rates for Colorado residential customers based on the time of day they consume energy. The company is introducing “Time of Use” rates, which will vary rates during three different time periods throughout the day.

Customers who use major electric appliances during peak hours, from mid-afternoon to evening, will face higher rates. This program is specific to electricity rates and does not affect natural gas rates. It is applicable only to Xcel’s residential customers, not commercial ones. Xcel’s Regional Vice President of State Affairs and Community Relations, Hollie Velasquez Horvath, mentioned that the peak hour for electricity usage is around 6 pm when customers return home and start consuming electricity.

Xcel is anticipating changes in energy use and infrastructure as more customers switch to electric vehicles, heat pumps, and stoves. The company aims to encourage customers to modify their electricity usage patterns to avoid the need for additional generation capacity during peak hours.

Xcel plans to transition all customers to the new rate plan by 2025, starting with 310,000 customers in March. Customers will be informed about the changes and will receive a new electric meter from Xcel, either a smart meter or a non-communicating meter.

“We all get home, we all start using electricity, and our peak hour is around 6 at night,” said Horvath.

Credit: Xcel Energy

Xcel outlined the “Time of Use” rates and hours as:

  • On-Peak Hours: Weekdays between 3 p.m. and 7 p.m., excluding holidays.
  • Mid-Peak Hours: Weekdays between 1 p.m. and 3 p.m., excluding holidays.
  • Off-Peak Hours: Daily before 1 p.m. and after 7 p.m. plus weekends and holidays.

Rates are calculated by ckWh, or “cents per kilowatt hour.” Depending on the season, rates during On-Peak hours cost about 1.5 to 3 times more than Off-Peak rates. Rates are highest during the summer.

Xcel suggests customers, when possible, run their dishwasher overnight and laundry on the weekend. Velasquez Horvath says the biggest difference maker for customers under this plan will be their air conditioning use in the summer.

Credit: Xcel Energy

Customers could choose to use the opt-out option here, as well, meaning a flat-rate charge for energy throughout the day, but Xcel said this means customers won’t have the opportunity to save money by shifting energy usage to off-peak hours.

So, it you’re able to conserve energy during peak hours of the day you will pay less. If not, you’ll pay more.

 

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Colorado residents face new reality: Paying more for energy during peak hours