Time of Use Rates
The TOU rates are designed to give electric utility customers options to save money by lowering electricity bills by adjusting their use patterns to use more electricity (e.g. by running high-energy use appliances) when the rate is reduced and less during on-peak hours. On-peak periods are set when demand is highest and costs are greater to generate and deliver energy. When demand is low, the cost of electricity is generally lower because there is less stress on the electricity grid and cheaper energy sources are available. For example, wind generated electricity is typically more available overnight and it is less expensive to produce and distribute at that off-peak time.
Time Of Use Rate Information
TOU rates are used by utilities to vary the cost of electricity throughout the day. Instead of paying the same amount per kilowatt for every hour, rates are adjusted to more accurately reflect costs on the system which change during certain periods of the day. Rates are applied for hourly periods: On-Peak, Mid-Peak and Off-Peak. TOU rates are also adjusted to account for the differences between electric use across the year.
TOU rates are not intended to raise overall bills because a short window of slightly higher On-Peak rates are offset by lower Off-Peak rates that apply the rest of the day. As noted below, many customers can actually reduce their bills under TOU rates. In the long term, TOU rates are designed to lower bills by reducing the amount of energy utilities need to generate and purchase.
If customers are able to shift electric usage from On-Peak to Off-Peak hours—even small shifts—they can save money. Examples include small thermostat adjustments during On-Peak hours, running a dishwasher more often during late-night or mid-day hours, or moving one or more loads of laundry from a weeknight to a weekend.
By contrast, charging an electric car mainly during the On-Peak period can cause an increase in bills.
Frequently Asked Questions
Are TOU rates new in Colorado?
No. Utilities in Colorado tested and studied TOU rates for several years before they were introduced to most customers. In 2022, Xcel Energy’s residential customers began to transition to a seasonal TOU rate, which it expects to complete in 2025.
Has the introduction of TOU rates since 2022 caused customer bills to rise overall?
No. Preliminary data suggests that, on average, Xcel Energy electric customers have been able to shift usage away from On-Peak periods, meaning that TOU rates have resulted in overall bill savings compared to a non-TOU scenario.
Total electric utility bills have increased due to higher rates to pay for infrastructure investment, inflation, changes in fuel prices, and higher electric usage (for example, for electric vehicles or from the conversion to electric water heating and space heating).
Are TOU rates mandatory?
No. A customer can opt out of time-of-use rates and elect to take electric service on a flat rate. The flat rate is higher than the TOU off-peak rate and lower than the TOU on-peak rate. Flat rates also change due to seasonal impacts—the seasonal flat rate is higher in summer months (June through September) than in non-summer months.
Black Hills will offer an Opt-In TOU program to all customers with On Peak hours between 5 PM and 8 PM. Customers should contact Black Hills Electric to learn more on how to participate.
Are customer bills lower on the flat rates?
No. The average customer will pay the same amount over the course of a year on a flat rate as on TOU rates.
How does the price of electricity vary under Xcel Energy’s current TOU rate?
Currently, the day is divided into three periods for residential customers: On-Peak, Mid-Peak, and Off-Peak. Those periods are defined as follows:
On-Peak: 3 PM to 7 PM on non-holiday weekdays only
Mid-Peak: 1 PM to 3 PM on non-holiday weekdays only
Off-Peak: All other hours
The Off-Peak rate is the same throughout the entire year. During the summer months (June-September), the On-Peak rate is 2.7 times higher than the off-peak rate. During the non-summer months (October-May), the On-Peak rate is 1.7 times higher than the off-peak rate. The Mid-Peak rate is in effect year-round and is always halfway between the On-Peak and Off-Peak rate.
Why is the Commission considering new TOU On-Peak and Off-Peak periods for Xcel Energy’s residential TOU rate?
The Commission required that Xcel Energy propose new TOU periods because costs on its system are continually evolving due to infrastructure investment, inflation, and changes in fuel prices.
Will new TOU rates cause an overall bill increase?
No. Just like current TOU rates, the proposed rates are intended not to raise overall bills.
How does the PUC approve rates, including TOU rates?
The PUC approves utility rates in formal proceedings before its three Commissioners or its administrative law judges (ALJs). An entirely independent team of economists, engineers and accountants, known as “Commission Trial Staff,” participates in these proceedings. Other parties also present proposals and recommendations through testimony. This process, which is common across all cases at the PUC, allows the Commissioners and ALJs to hear ideas from a range of perspectives.
Can I opt out of the TOU rate without opting out of receiving a smart meter?
Yes. Any customer can opt out of the TOU rate and instead receive service on a seasonal flat rate. Consumers with a verified medical condition may have a different flat rate available. Please contact Xcel at 1-800-895-4999 to discuss if this applies to you. The seasonal flat rate is higher in the 4-month summer period from June through September and lower the rest of the year, but the electricity rate is the same for all usage regardless of when it occurs and how much is used.
Learn more about Opting Out from Xcel Energy's TOU here.
- Updates to Time of Use (TOU) Rates for Xcel Energy
What did the Commission approve for new TOU time periods?
The Commission approved a new TOU structure for Xcel Energy customers on Feb. 19, 2025, based on addressing the most expensive times for the electric system. The effective date of these new rates will be no earlier than October 2025 in order to provide Xcel Energy time to educate and inform its customers about how to use the new TOU periods before they become effective.New TOU Times
On-Peak: 5PM to 9PM on non-holiday weekdays, year-round
Off-Peak: all other hoursTOU on-peak periods are set when demand is highest and costs are greater to generate and deliver energy. When demand is low, the cost of electricity is generally lower because there is less stress on the electricity grid and cheaper energy sources are available.
How does the price of electricity vary under Xcel Energy’s current TOU rate in place, as of March 2025?
Currently, the day is divided into three periods for residential customers: On-Peak, Mid-Peak, and Off-Peak. Those periods are defined as follows:On-Peak: 3 PM to 7 PM on non-holiday weekdays only
Mid-Peak: 1 PM to 3 PM on non-holiday weekdays only
Off-Peak: All other hoursThe Off-Peak rate is the same throughout the entire year. During the summer months (June-September), the On-Peak rate is 2.7 times higher than the off-peak rate. During the non-summer months (October-May), the On-Peak rate is 1.7 times higher than the off-peak rate. The Mid-Peak rate is in effect year-round and is always halfway between the On-Peak and Off-Peak rate.
Why did the Commission consider new TOU On-Peak and Off-Peak periods for Xcel Energy’s residential TOU rate?
The Commission required that Xcel Energy propose new TOU periods because costs on its system are continually evolving due to infrastructure investment, inflation, and changes in fuel prices.
Will Xcel Energy’s proposed new TOU rates cause an overall bill increase?
No. Just like current TOU rates, the proposed rates are intended not to raise overall bills.How does the PUC approve rates, including TOU, for Xcel Energy?
The PUC approves utility rates in formal proceedings before its three Commissioners or its administrative law judges (ALJs). An entirely independent team of economists, engineers and accountants, known as “Commission Trial Staff,” participates in these proceedings. Other parties also present proposals and recommendations through testimony. This process, which is common across all cases at the PUC, allows the Commissioners and ALJs to hear ideas from a range of perspectives.
- Xcel Energy Smart Meter Questions
Can I just keep my old meter?
No. Xcel is in the process of replacing all electric meters in Colorado. You can choose to select a new non-communicating meter instead of a smart meter, but you will incur a cost if you decline a smart meter. The smart meter sends billing information directly to Xcel, so Xcel saves money by not having to send technicians to read each customer’s meter. To read each non-communicating meter, it costs Xcel an average of $11.84 per month for customers in the Denver Metro area and $23.64 per month for customers outside of the Denver Metro area. If you choose the non-communicating meter, this monthly cost will be added to your bill. In addition, if you choose to receive a non-communicating meter after a smart meter has been installed, you will be responsible for the one-time cost of sending a technician to exchange the meters. You can request a non-communicating meter through Xcel’s customer service department at 1-800-895-4999. If you opt not to receive a new communicating or “smart” meter, you will still be transitioned onto the new time-of-use rate structure unless you opt out of the rate as well.
Can I opt out of the TOU rate without opting out of receiving a smart meter?
Yes. Any customer can opt out of the TOU rate and instead receive service on a seasonal flat rate. Consumers with a verified medical condition may have a different flat rate available. Please contact Xcel at 1-800-895-4999 to discuss if this applies to you. The seasonal flat rate is higher in the 4-month summer period from June through September and lower the rest of the year, but the electricity rate is the same for all usage regardless of when it occurs and how much is used.
Why would I want a smart meter?
With a smart meter, you will be able to view and understand your own electric use in much greater detail. This information will help you decide if you would like to make changes to your consumption patterns (like running your dishwasher or clothes dryer overnight) and see how it can save you money. If you are able to make such changes, you may see a savings on your bill. Smart meters will also allow Xcel to maintain reliable service more efficiently. Any time there is a power outage, or even the onset of conditions that could potentially lead to a power outage, Xcel will automatically be notified so they can start working to resolve problems faster.
Will Xcel shut off or decrease my power after a new meter is installed?
No. Xcel will not randomly shut off or “throttle” your electricity. You as the consumer control when you use electricity and how much your home consumes. Xcel will only turn off service if there are past due bills and Xcel must provide prior notification to the account holder before this is done. Of course, if there is a safety issue or a power outage you may occasionally lose service for a period of time.