Colorado regulators allow tiered electricity rates
March 4, 2010
DENVER (AP) – Colorado’s largest power supplier is going to charge more this summer for customers who use the most electricity.
XCel Energy Inc. won approval from state utility regulators Wednesday to institute tiered electric rates during summertime. That means residential customers will pay higher rates for each kilowatt-hour once they exceed a monthly threshold.
Utilities in California and elsewhere already use tiered billing so that big electricity consumers pay more. XCel’s plan would give the utility’s 1.1 million Colorado customers a lower rate for the first 500 kwh per month and a higher rate for all electricity above that amount.
Regulators say the typical residential customer uses about 687 kwh a month from June to September.
The tiered system was approved as part of utility’s previously approved $128.3 million rate increase.
Details on the rates will not be final for a few weeks. Bill Levis, director of the Colorado Office of Consumer Counsel, said the change would be about 3 cents per kilowatt-hour.
XCel spokesman Tom Henley wouldn’t speculate on the change for average electricity customers. The rate change won’t apply to commercial electricity users, who are billed on a separate system.
The Denver Post reported Thursday that regulators estimate residential customers with average usage will pay about 2 percent more in summer and about 5 percent less during the rest of the year.
Some conservationists applauded the tiered system, saying consumers who use more power should pay more.
“The block rates adopted by the PUC are a step in the right direction toward giving consumers a better price signal to conserve electricity,” Howard Geller, director of the Boulder-based Southwest Energy Efficiency Project, told The Post.
The overall rate increase was approved to help XCel pay for the $1 billion Comanche 3 power plant, a coal-fired plant in Pueblo.