Time of Use Rates

What are Time of Use (TOU) rates?
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.

What is the purpose of TOU rates?
TOU rates are designed to more accurately reflect the actual cost of operating the electric system. Because utilities must invest large amounts of money to be able to reliably provide electricity during On-Peak hours when their systems are under the greatest strain, rates can be lowered in the future if consumers reduce their electricity use at these peak times.  

Do TOU rates increase electric utility bills?
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.    

Do TOU rates provide an opportunity for customers to save money on their electric bills?
Yes. 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.

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.

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.

What is Xcel Energy’s proposal for its new TOU periods and rates?
Xcel Energy proposes to eliminate the current Mid-Peak period and vary the On-Peak and Off-Peak periods by season. Those periods are as follows:
Summer (June through September):
On-Peak: 4PM to 9PM on non-holiday weekdays
Off-Peak: all other hours
Non-Summer
On-Peak: 5PM to 9PM on non-holiday weekdays
Off-Peak: All other hours

Xcel Energy’s proposed Off-Peak rate is the same throughout the entire year. During the summer months (June-September), the On-Peak rate is proposed to be 2.25 times higher than the Off-Peak rate. During the non-summer months (October-May), the On-Peak rate is proposed to be 1.38 times higher than the Off-Peak rate.

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.

I’ve heard that the PUC is proposing different TOU rates than Xcel Energy. Is that true? 
Commission Trial Staff developed its own TOU proposal for the Commissioners to consider in Proceeding No. 24AL-0377E. Other parties, such as Western Resource Advocates, the Colorado Solar and Storage Association, the Office of the Utility Consumer Advocate, and Colorado Renewable Energy Society, also presented their own suggestions to the Commissioners.

Trial Staff have proposed to eliminate the current “mid-peak” period and simplify the rate into only On-Peak and Off-Peak hours, which remain constant through the year. Those periods are as follows:
On-Peak: 5PM to 10PM on non-holiday weekdays
Off-Peak: all other hours

This proposal was designed to provide a consistent price signal to customers that will remain stable over the long-term. The 5PM to 10PM period covers the hours during which system peaks are most likely to occur during both summer and winter months through 2031.

Trial Staff’s proposed TOU rate options are designed to collect the same amount of revenue as Xcel’s proposed rate options (and the same amount as current residential rate options). This means that the average customer will pay the same amount over the course of a year on Commission Staff’s proposed rate options as they do on Xcel’s proposed rate and their existing rate.  

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.

To learn more about Opting Out from Xcel Energy's TOU, visit  
https://co.my.xcelenergy.com/s/billing-payment/residential-rates/reside…

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.