Xcel asks to launch peak-pricing pilot program in Boulder

Nov 07, 2009 (Daily Camera - McClatchy-Tribune Information Services via COMTEX) -- XEL | Quote | Chart | News | PowerRating -- Xcel Energy wants to launch a pilot pricing program in Boulder that would charge more for electricity when demand on the grid is greatest.

If the Colorado Public Utilities Commission approves the request, the pilot program would enlist about 2,000 customers and run from June 2010 through December 2011.

The idea is to encourage people to burn less wattage from 2 to 8 p.m. when demand peaks, which in turn would reduce the need for "peaking" power stations -- such as the natural gas-powered unit at Xcel's Valmont power plant east of Boulder -- that are revved up to cover the spike, especially in the summertime when air conditioners are humming.

Renewable energy advocates also say that shifting electricity use -- like turning on a clothes drier or plugging in an electric car -- to late-night or early-morning hours can help make more efficient use of energy from the wind. Unlike fossil fuels, which can be burned when they're needed, winds continue to blow overnight even when the demand is low. Plugging in overnight would take advantage of wind energy that might otherwise be lost.

Customers who participate in the program would be offered three pricing options that differ in the amounts charged or credited and the conditions that trigger the pricing structure, said Tom Henley, Xcel spokesman.

"We want to test and see which one our customers are most responsive to, and which ones we are able to shave the peak load with," he said. "We also want to know if we are able to reduce usage, or just reallocate usage."

Xcel chose Boulder for the pilot program because of its SmartGrid infrastructure, which will allow customers to monitor what they're burning during peak hours and -- with the right energy-management devices -- program appliances such as air conditioners and dishwashers to turn on and off in the middle of the night.

Howard Geller, executive director of the Boulder-based Southwest Energy Efficiency Project, said peak-pricing plans can be useful tools for managing energy use, but they won't necessarily address the problem of burning excessive electricity.

"Time-of-use pricing has the potential to reduce peak demand and thereby reduce the need for new generating capacity," said Geller, whose nonprofit works to advance energy-efficiency projects in six Western states. "But it remains to be seen if there will be any energy savings as a result of the strategy."

Contact Camera Staff Writer Laura Snider at 303-473-1327 or sniderl@dailycamera.com.

Xcel Energy's pilot pricing plan:

Xcel customers who participate in the pilot pricing program could choose from three options:

Time of use: Under this plan, customers are always charged more for electricity used at peak times, between 2 and 8 p.m., and less for using electricity at other times. Peak rates would be higher in the summer -- when air conditioners put a greater load on the grid -- and lower in the winter.

Critical peak pricing: Customers who choose this would have a similar payment scheme as "time of use" customers, but their peak-demand prices would be slightly lower in both seasons. This plan also adds an additional price for "critical peak" days, those 15 or so days during the year when demand is highest on the grid. Customers who sign up for this pricing plan agree to pay a much higher rate during critical peak times, but they will also be informed of critical days beforehand, by e-mail or phone, so that they can adjust their electricity use.

Peak time rebate: This final option would allow the customer to be billed as they are now most of the time. During critical peak days, however, these customers would be rewarded with a credit on their bill if they reduce their electricity use below normal.

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