After feedback, Xcel changes plan to charge more for electricity during peak hours

Xcel Energy is modifying its controversial proposal to charge customers significantly more for electricity they use during peak times of the day. 

Minnesota’s largest electric utility had proposed charging variable rates to better reflect the actual cost of delivering electricity during high-demand periods, reduce strain on the electric grid and potentially eliminate the need to build new power plants.

Xcel said its goal was to get customers to shift their electricity use to off-peak periods when energy is more affordable to generate and deliver. It planned to enroll all residential customers in the time-of-use rate program unless they chose to opt out.

But the proposal met with pushback from some Xcel customers and consumer advocates. They said the price difference between peak and off-peak rates was too large, and some customers might not be able to change their energy use to avoid higher bills. 

The initial proposal would have charged roughly seven times more for using electricity during summer peak hours than off-peak periods.

In a filing with the state Public Utilities Commission, Xcel said after collecting feedback, it’s modifying the plan and making it voluntary for customers to opt in, instead of the default.

Its new plan shortens the peak period and shifts it later to 7-10 p.m. weekdays, instead of 3-8 p.m. as originally proposed. There’s also smaller price difference between peak and off-peak rates. 

Electricity will still be cheapest from midnight to 6 a.m., when there’s an abundance of available wind energy.

Xcel says it plans to educate customers about the time-of-use rate program and its potential benefits.

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