Time of Use Rates are Coming
Xcel plans a permanent Time of Use rate for both residential and small commercial customers. As advanced meters are installed over the next couple of years, they will become the default rate. With meters that measure energy use every 15 minutes, both customers and Xcel will have more ability to know and control their energy use.
The higher on-peak rate will be in effect from 3 to 7 P.M. each weekday (except holidays). Off-peak rates on weekdays (7 P.M. to 1 P.M. the next day), plus all day weekends and holidays will charge the least. “Shoulder’’ rates would offer rates in-between. The rate case will make a final decision on whether rates will be different in summer and winter.
Xcel is not proposing Time of Use rates for larger customers, but many renewable advocates want them included.
Making Demand Charges Less Onerous
A key disincentive for larger commercial and public building owners to install solar energy is that so much of the bill consists of a “demand charge’’ based on the highest energy use in a short period.
The City and County of Denver wrote in the rate case: “The perception begins to emerge that demand charges are the only cost that matters….Despite reducing demand due to changes in energy use patterns, solar deployment, or otherwise, the City’s facilities are still subject to billed demand charges that may be higher than the actual demand used on several months of the year.’’
Some of those involved in the rate case are asking for a pilot of Time of Use rates for large customers. For example, a solar expert wrote that such a rate ``provides more accurate price signals that has the potential to smooth out peak demands and create cost savings for all customers in the form of reduced future capacity needs.'' If you are a commercial customer hurt by demand charges, it is very important you participate in the Thursday hearing.
Currently, these “demand charges’’ don’t apply to residential customers of Xcel. But some are worried that unless the use threshold is raised, customers who charge an electric car or two may well hit the level at which these fees can wipe out their savings. Thus, many EV proponents want to raise the level at which demand charges would kick in.