Xcel Energy Triples Time of Use Rates – What You Need to Know
Families throughout the Denver metro area are feeling the pressure of high prices on goods, inflation, and other economic issues. Now, they will also have to reckon with rising energy costs.
Recently, Xcel Energy announced that customers will be billed three times more for the electricity they use during peak hours. Xcel classifies 3 p.m. to 7 p.m. as its peak hour period. Unfortunately, this is the time when people get home from school and work, which means higher energy usage at the exact time rates are at their most costly to customers.
At REenergizeCO, we are committed to helping Denver homeowners save money on energy. While the Xcel Energy time of use rate hike certainly presents challenges for cash-strapped families, it is important to understand what time of use pricing is and how you can still take action to save money on your monthly energy bill.
What Is Time of Use Pricing?
First off, you need to know how time of use rates work. Time of use pricing bills customers at different rates for electricity usage based on the time of day they draw power from the grid.
Xcel Energy divides weekdays (excluding holidays) into three different parts based on the level of energy consumption:
- Off-Peak Hours: 7 p.m. to 1 p.m.
- Mid-Peak Hours: 1 p.m. to 3 p.m.
- Peak Hours: 3 p.m. to 7 p.m.
The time of use rate varies between summer and winter. Pricing is per kilowatt hour (kWh):
- Summer Time of Use Rates:
- Off-Peak Hours: $0.11 per kWh
- Mid-Peak Hours: $0.19 per kWh
- Peak Hours: $0.28 per kWh
- Winter Time of Use Rates:
- Off-Peak Hours: $0.11 per kWh
- Mid-Peak Hours: $0.14 per kWh
- Peak Hours: $0.18 per kWh
On weekends and holidays, Xcel Energy uses general residential pricing. The rate is $0.14 per kWh in the summer and $0.12 per kWh in the winter.
Why Did Xcel Energy Switch to Time of Use Rates?
Xcel is moving to time of use rates to reduce the strain on the power grid at key points in the day when energy consumption has been historically at its highest (known as on-peak hours). This initiative coincides with the introduction of new smart meters, which Xcel Energy has been installing in homes throughout the Denver metro over the past year or so.
Today, more than 300,000 Xcel Energy customers are subject to time of use pricing. Xcel aims to have time of use rates apply to all customers by 2025.
In theory, time of use rates give residential energy customers greater control over what they spend on electricity. When homeowners know that energy costs more at certain times of day, they can move electricity-intensive activities (e.g., heating and cooling, laundry, running the dishwasher, etc.) to earlier or later in the day. Compare this to the previous flat rate, where you paid the same amount for electricity no matter when you were consuming power.
Unfortunately, tripling rates when customers are already grappling with inflation and price hikes has caused customers considerable (and understandable) stress and even anger. Given the current economic conditions, then, it is important to know how you can power your home without breaking the bank amid Xcel Energy’s time of use rate hikes.
How to Save Energy with Time of Use Rates
As mentioned above, changing your home energy habits can do a lot to bring down your electric bill. However, this is not always possible, especially when it comes to essentials like food preparation and cooling and heating your home.
Other tips to save energy and money in the wake of time of use rates hikes by Xcel include:
1. Opt Out of Time of Use Rates
Xcel Energy is doing little to promote this, but customers actually do have the ability to opt out of Xcel’s time of use pricing. Within 30 days of receiving notice that you are subject to the new rate plan, you can call Xcel at (800) 895-4999 to provide formal notice that you are opting out of the new pricing.
If you decide to opt out, your energy usage will be priced at $0.14 kWh in the summer and $0.12 kWh in the winter. The opt-out pricing is significantly lower than the time of use rate for peak hours, but this is a temporary solution that Xcel will likely discontinue by 2025 (if not sooner).
2. Get a Home Energy Audit
A comprehensive home energy audit helps you understand your electricity usage and issues that may cause your electric bill to add up month over month. Xcel offers a 60% rebate on the cost of a home energy audit (up to $200) when you use a registered audit contractor.
Read More: What Is an Xcel Energy Audit?
Participating contractors will fully evaluate how well-sealed your home is through inspection of the exterior of the house as well as your home insulation. Thermal imaging can help to identify air leaks and hot and cold spots inside the home. Finally, the auditor will review your energy bills over the past year to assess your energy consumption habits and your home’s overall energy efficiency.
Home energy audits pinpoint the problems that cause high energy bills. These insights are essential for maximizing the value of any energy efficiency improvements in which you choose to invest.
3. Consider Solar Energy
Investing in solar panels might not seem feasible in today’s economy. However, installing a residential solar energy system provides long-term savings that can significantly offset the rising energy costs Denver homeowners are starting to face.
Read More: Does Solar Make Sense in Denver?
You start saving on your electric bill as soon as the solar panels are activated. In addition, a fully optimized solar panel system pays for itself within 5 to 10 years.
Homes with solar power will have unique advantages on the heels of Xcel Energy increasing the time of use rates. The sun is still out in the summer during Xcel’s peak hours, meaning you can rely on your solar panels while other homeowners are paying top dollar for juice from the grid.
If you invest in a solar storage battery, you can further maintain your energy independence in the winter and on cloudy or stormy days. Solar battery storage also has the advantage of protecting your access to electricity in the event of a power outage.
You can also take advantage of cost-saving measures when you have an efficient solar energy system. Xcel Energy net metering will credit your account when your solar panels produce more electricity than you draw from the grid, resulting in lower monthly bills.
Read More: How Much Money Can Solar Panels Save You?
Concerned About the Xcel Energy Time of Use Rate Hike? REenergizeCO Can Help!
Energy bills are just one of the monetary anxieties we are all facing today. Fortunately, there are a number of steps customers in and around Denver can take to weather Xcel’s price increases and keep their budget intact.
Simple steps to save energy can go a long way. Long-term, it may be worth it to explore more permanent solutions that provide you with greater energy efficiency and independence.
REenergizeCO is your trusted partner in cutting your electric bill. Xcel lists us as the top rebate-producing home energy audit contractor in Denver. We have helped hundreds of Xcel Energy customers in the Denver area diagnose energy efficiency issues with their homes and find effective, affordable solutions.
We are also a leading solar installation company. Our team performs hundreds of installations, interconnections, and activations of solar panel systems throughout the Front Range every year.
We also help customers after the job is done by handling the paperwork for any and all applicable solar rebates. There are a number of different incentives that can save you money on solar upfront and over time.
Simply put, you save more when clean energy costs less. That is the principal benefit of solar energy and other residential energy efficiency services we provide at REenergizeCO.
Are you ready to save money on your energy bill? Call REenergizeCO in Denver at (303) 227-1000 to schedule your home energy audit, find the solar solution for you, and more!