Running central air conditioning or pool pumps could lead to bigger Xcel Energy bills under new tiered rates that will charge big residential electricity consumers more during the summer.
The Public Utilities Commission on Wednesday approved a two-tiered rate system as part of Xcel’s previously approved $128.3 million rate increase.
“For years, consumers have advocated ‘the more you use, the more you pay’ for electricity,” PUC Chairman Ron Binz said in a statement. “Today, we’re making that slogan a reality.”
Under the plan, from June through September, Xcel’s 1.1 million residential customers in the state will be charged a lower rate for the first 500 kilowatt-hours per month and a higher rate for all electricity above that amount.
The commission’s written order, with the details of the rates, will not be issued for a few weeks.
It appears that the difference between the blocks will be about 3 cents a kilowatt-hour, according to Bill Levis, director of the Colorado Office of Consumer Counsel.
The typical residential customer uses about 687 kilowatt-hours a month during the four-month summer period, according to the utilities commission. So the higher block rate might add about $5.60 to a bill.
Xcel is awaiting the written order before trying to calculate the impact on average bills, said company spokesman Tom Henley.
The new rates are effective June 1.
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 block rates adopted by the PUC are a step in the right direction toward giving consumers a better price signal to conserve electricity,” said Howard Geller, director of the Boulder-based Southwest Energy Efficiency Project.
Geller’s organization advocated a four-block schedule with steep charges in the top blocks.
The commission, however, decided that since this was the first use of tiered rates for Xcel bills, they would keep it simple, Levis said.
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.
Another issue decided Wednesday by the PUC was related to how much of the $128.3 million rate increase would be borne by residential customers, commercial users and industrial users. The majority rate increase, approved Dec. 3, was to pay for the cost of the $1 billion Comanche 3 power plant.
The commission rejected an argument by the Office of Consumer Counsel that too much of the rate increase was being shifted on to residential customers.
Residential customers will pay about 40 percent of the base-rate increase, Levis said.
Xcel 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 trim about $3 million from the amount residential customers will pay because of anticipated savings from the tiered rates, Levis said.
Big commercial and industrial power users are billed on a different system.
Mark Jaffe: 303-954-1912 or mjaffe@denverpost.com
