by Hollie Velasquez Horvath
Colorado leads the nation in building a clean energy future, and Xcel Energy is doing its part. We are dramatically expanding our use of wind and solar and, by 2030, will reduce carbon emissions associated with the electricity we provide customers by 87% compared to 2005. We are already halfway to our long-term 2050 goal of a carbon-free electric system.
But our renewable energy leadership is just part of the equation. How and when our customers use electricity also plays a major role in making our clean energy transition a success.
Many homes and businesses have already helped advance clean energy in Colorado, by saving energy through our conservation and energy efficiency programs, subscribing to community solar gardens, or placing solar on the roofs of their homes. Now, we’re launching a new opportunity for everyone to save money while playing a part in reducing our carbon footprint.
Over the next three years, Xcel Energy’s Colorado electric customers will transition to a “Time of Use” rate. Instead of a flat rate for electricity throughout the day, the price will vary on weekdays, with the peak price between 3 p.m. and 7 p.m. and lower prices at other times of day and on weekends. By reducing energy use during that peak period, you will be able to save on your bills and help build a cleaner energy future for Colorado.
Why make this change? First, the Time of Use rate gives you more control over your electric bill. By shifting some of your use to off-peak times, you can take advantage of lower rates. Making a few changes, like heating or cooling your home ahead or after peak hours or doing laundry on weekends or later in the evening, can help you save money.
Second, the Time of Use rate will allow us to avoid adding extra energy sources to meet peak demand each day, while still ensuring reliability. By lowering peak electricity use on the grid, we reduce the need to build or buy energy from new power plants. That helps keep costs low for everyone.
Third, the Time of Use rate will help reduce carbon emissions. That’s because at peak times, later in the afternoon, and early evening on weekdays, we draw from more of our available electric generating plants to meet the demand for electricity, often relying more on fossil fuel-fired plants. By lowering electric use on the grid during peak times, we can reduce natural gas generation during the peak hours — and reduce carbon emissions as a result.
Finally, since wind energy is usually at its strongest at nighttime, the Time of Use rate shifts energy use to later in the evening and helps make the most of the state’s clean energy sources. Colorado already ranks sixth in the nation in renewable energy use and seventh in renewable energy production, and these new rates will help us continue our momentum.
While the Time of Use rate is new to our Colorado customers, it is used in many other places around the country, helping customers save money and drive the clean energy transition forward. Our customers’ bills in Colorado are among the lowest 10% in the nation, and the Time of Use rate is one step we’re taking to keep them that way while delivering on our commitment to a cleaner energy future.
Xcel Energy is already more than halfway to our vision of providing carbon-free electricity by 2050. This new rate plan provides a way for everyone to play a role in reducing carbon emissions and save money along the way. It’s an important step toward the cleaner energy future, with Colorado leading the way.