Minnesota Commission approves Xcel Energy’s innovative time-of-use rate pilot

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On Thursday, May 31, 2018 the Minnesota Public Utilities Commission unanimously approved Xcel Energy’s proposed time-of-use rate pilot program with strong support from Fresh Energy and other stakeholders. Xcel filed this proposal with the Commission on November 1, 2017 after significant stakeholder engagement.

  • Time-of-use rates offer customers the opportunity to save money by charging less at times of the day when electricity is cheaper to generate and deliver. It also encourages customers to shift their energy use away from a few peak hours of the day when electricity is most expensive for everyone, delivering cost savings across the system.
  • Beginning in 2020, Xcel Energy’s proposal will pilot a three-tiered time-of-use rate structure for two years for 10,000 residential customers living in two areas of its Twin Cities service territory. The two main goals of the pilot are to test the effectiveness of the rate design in changing customer behavior and determine optimal ways of educating customers about the new rate design.
  • Customers placed on the rate pilot, who can opt-out at any time, will see significantly lower rates for energy used during a super off-peak period (12 AM – 6 AM), roughly the same rates during a normal off-peak period (6 AM – 3 PM and 8 PM – 12 AM), and higher rates during the on-peak period on weekdays (3 – 8 PM). For weekends and holidays, the off-peak rates are in effect through the 3 – 8 PM period. The rate pilot is designed so that the average customer would see no change in their bill if they don’t alter their energy use at all.

Fresh Energy has strongly supported time-of-use rates as a way to reduce Xcel Energy’s peak demand, resulting in overall energy savings, helping customers save money and energy through stronger price signals, and driving the growth of cost-effective wind generation. Through rigorous analysis and committed intervention at the Public Utilities Commission, Fresh Energy has developed an extensive record showing the value of moving utility rate structure towards time-of-use rates. In 2017, Fresh Energy and numerous stakeholders met for extensive meetings to assess areas of common interests and potential points of disagreement before the official November 1 filing. This process significantly reduced the areas of contention before the proposal was taken up by the Commission.

Xcel Energy will file mid-term and final results for its time-of-use pilot at the Commission. In the meantime, Fresh Energy will work to ensure the pilot’s success and will continue to advocate that time-of-use rates become the new normal for residential rate design in Minnesota.

For questions regarding the pilot, contact Xcel Energy at 1-800-895-4999 between 9:00 AM – 5:30 PM.