State PUC Approves Xcel’s Two-Tier
Rate Structure
Effective June lst, utility bills will increase for consumers who exceed 500 kilowatt-hours per month of electrical usage
Reported by Art Mass
The Public Utilities Commission on Wednesday gave approval to Xcel’s two-tired rate system, which was part of the utility’s previously approved $128.3 million rate increase. Details of the commission’s written order, including final rates, will not be issued for a few weeks.
The plan essentially means the more electricity consumers use, the more they would pay. From June through September, Xcel’s 1.1 million residential customers will be charged a lower rate for the first 500 kilowatt-hours per month and a higher rate for all electricity above that amount.
In a statement, PUC Chairman Ron Binz said “For years, consumers have advocated ‘the more you use, the more you pay’ for electricity, and today, we’re making that slogan a reality.”
It is estimated that the higher block rate will add roughly $5.60 to their bill for those whose consumption exceeds the 500-kilowatt-hours/month threshold. The typical residential customer uses about 687 kilowatt-hours a month during the four-month summer period, so it appears the majority of residents in Xcel’s service area will be paying more.
The new rates go into effect the first of June, and Xcel Energy’s Tom Henley said his company is waiting the written order from the PUC before trying to calculate the impact on average bills. For its part, the utilities commission estimates residential customers with average usage will pay about 2 percent more in summer and about 5 percent less during the rest of the year.
The Boulder-based <I>Southwest Energy Efficiency Project</I> greeted the news of the block rates with a thumbs up, saying the tier approach is a step in the right direction.
The tiered rates should “both encourage efficient use of electricity and be relatively easy for customers to understand, ” said Karen Hyde, Xcel vice president for rates and regulatory affairs.
In another key decision, the COPUC rejected an an argument by the Office of Consumer Counsel that too much of the original $128.3 million rate increase brought by Xcel would be borne by residential and business users. The majority rate increase approved last December was to pay for the cost of the $1 billion Comanche 3 power plant. Colorado’s largest power provider argued in its filings that division of rates among its customer classes — residential, commercial, industrial — should be based on the costs they impose on the system.
The commission did agree to reduce by $3 million the amount residential customers will pay because of anticipated savings from the tiered rates, according to Levis. Large-scale commercial and industrial power users are billed on a different system.
Filed Under: ARCHIVES • Feature Articles • Utilities
Tags: Colorado Public Utilities Commission • Xcel Energy rates
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Comment by James Hall on 25 March 2010:
I certainly hope the PUC will take another look at this fixed tier level to make it more fair for everyone. It appears to me that the tier level is based on a per household or per meter basis without regard to the number of persons living in the house. To be fair the tier level should vary depending on the number of people living at a residence. For example: my neighbor who lives alone will have no trouble keeping her electric usage below the tier threshold but I have six people living in my home and will be penalized for the higher usage even though my per person usage is about 1/2 what my neighbor uses by herself. This inequity is totally unfair and should be addressed by the PUC before this rate hike tier is implemented. This should also apply to the tier level on water usage which is directly related to the number of people on a given meter. The fixed tier level does not take this issue into consideration and is therefore unfair to larger households.
Comment by R Hais on 14 May 2010:
This is nothing more than an Xcel scam to raise revenue. The Colorado PUC have shown us once again that it is owned by Xcel Energy!
I hate to imagine what their next bit of scullduggery / chicanery will be!
Comment by James Hall on 20 May 2010:
Why can’t anyone see how unfair this fixed tier level is to larger housholds? Larger housholds are being penalized because they have more people using power from the same meter. If the tier level cannot be based on a per person usage then it should be abandoned altogether.
Comment by cogeo on 21 May 2010:
Just another example of how our government has failed to think out the consequences of their knee-jerk actions. I can see this getting worked out in court, but only after several more million dollars of the taxpayer’s money is spent.
Comment by R Hais on 26 May 2010:
Xcel is now running an ad where the spokesman sneeringly touts that “Xcel is doing us a favor” by charging us more with their “tiered” electric billing structure (read, RATE INCREASE). I find it quite coincidental that the KWH tier rate increase break point is about 165 KWH below the “average” summer residential usage level. This equates to an automatic rate increase for every “average” user.
I guess Xcel and their subsiderary Colo. PUC think they are quite clever in trying to make us believe they are doing this to”protect the environment.”
WE THANK YOU XCEL FOR LOOKING AFTER OUR “WELFARE!”
Comment by Jenni on 29 July 2010:
Did I miss something? If you have more people, you need to buy more food, more clothes, more tickets to Broncos Games, don’t you? Why should energy be any different?
Here’s some advice for you folks with the bigger families: CONSERVE MORE. Something I learned in the 70s that seems to have been lost in the last few years: Stop letting the water run, turn off the lights when you’re not in the room, unplug your appliances when you’re not using them.
Why should I pay the same rate for my three energy consumers as you do because you choose to have a big family?
And how do you propose charging per person? Hooking eeryone up their own meter?
Perhaps being charged more will make us more conscious of how we use energy and we can change our wasteful habits.