The Public Utilities Commission (PUC) recently adopted new electricity rates for Xcel Energy, modernizing rates for a large swath of Xcel’s commercial customers.  The Colorado Solar and Storage Association (COSSA) and the Solar Energy Industries Association (SEIA) successfully argued to revamp rate structures for Xcel’s commercial customers, reversing nearly one hundred years of regulatory tradition. The new rates go into effect today on September 10, 2021.

“The PUC’s decision demonstrates strong leadership to advance state climate goals,” said Mike Kruger, President and CEO of COSSA. “We have a serious air quality problem in Colorado. Changing how commercial customers are billed for their electricity, as we are already doing for residential customers, will result in better price signals and lead to reduced fossil fuel burning.”

The PUC determined that all of Xcel’s small commercial customers and nearly 14,000 of its medium commercial customers will be billed with a time-of-use rate, called an energy-based charge. Historically, commercial customers have been billed on a monthly peak demand rate, called a demand-based charge. In orXcel 2020 Phase II Rate Case. COSSA pushed to replace demand-based rates with time-of-use (TOU) rates for commercial and industrial customers, following the change for residential customers. The Public Utilities Commission agreed with COSSA that demand-based rates warrant a closer look and may be at odds with state policy goals. While the Commission was not ready to throw out demand-based rates for larger C&I customers entirely, it did direct Xcel to develop alternative rate approaches in its next Phase II rate case. As a part of this examination, the Commission ordered Xcel to implement a TOU pilot for SG customers. COSSA will be active in this effort. The Commission also ruled in favor of a default TOU rate for C-class customers and an increased demand threshold from 25kw to 50kw.al deliberations, the PUC Commissioners found this outdated billing practice punitive and a barrier to state energy policy goals. 

Commissioners agreed to move many of Xcel’s commercial customers to time-of-use rates this year and will consider the same step for the largest commercial customers in the coming months.  In so doing, the Commissioners called for modernized rates that drive customer behavior and decrease system wide costs and greenhouse gas emissions.

“The new electricity rates for Xcel are a big step forward for the Colorado solar market,” said Sara Birmingham, SEIA Senior Director of State Policy, West. “Time-of-use rates are widely recognized as an effective tool for valuing energy that’s produced at the times when we need it most, and they will ultimately help solar customers save even more money on their electricity bills. We commend the Commission for this forward-looking proposal and encourage them to use the same model for large commercial energy customers.”

While the new rates for smaller businesses will go into effect today, a stakeholder group will convene to examine rate options for larger commercial and industrial customers.  Due to COSSA and SEIA’s efforts, Xcel must also test time-of-use rates for some of these customers in a pilot program. COSSA and SEIA will continue to push for modernized rates for all Xcel customers. The pair will continue to advocate for better rate designs that encourage solar and storage adoption and reduce demand on the electrical system, which will ultimately lead to cleaner air in Colorado.

For more information, please contact Mike Kruger, (202) 631-7439.

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COSSA is the state trade association representing over 200 solar and storage businesses in Colorado.  COSSA’s members provide solar and energy storage products and services to residential consumers, commercial businesses, utilities, and governmental entities throughout the state.

SEIA is the national solar association leading the transformation to a clean energy economy, creating the framework for solar to achieve 20% of U.S. electricity generation by 2030.  SEIA works with its 1,000 member companies and partners to fight for policies that create jobs in every community and shape fair market rules that promote competition and the growth of reliable, low-cost solar power.