Bill would force Xcel to stop tiered rate plan
DENVER — A bill that would end Xcel Energy Inc.‘s practice of using a tiered rate plan when charging for electricity had supporters and opponents claiming they were speaking on behalf of consumers Wednesday.
Supporters of the bill, introduced by Rep. Ray Scott, R-Grand Junction, said the tiered rate plan has raised most Xcel customers’ utility bills.
But opponents of his measure said doing away with the tiered rates would help only those who live in large homes or operate big businesses.
“I bring this bill on behalf of thousands of Coloradans who have suffered from what we’re going to call punitive damages from the rate system,” Scott told the House Transportation Committee, which is to vote on the measure next week. “What was meant to help consumers ended up hurting consumers. People don’t find out they’ve exceeded the tiered rate until they get their bill at the end of the month.”
Last summer, Xcel began charging its 1.1 million customers a lower rate for the first 500 kilowatt-hours a month they use from June to September, and 4.4 cents more an hour for electricity they use over that.
William Levis, director of the Colorado Office of Consumer Counsel in the Colorado Department of Regulatory Agencies, told the committee that 70 percent of Xcel’s customers are below that cutoff point, so doing away with the plan would cost them even more.
“On average, lower-income people have smaller homes and use less energy, and those with bigger homes and higher incomes use more,” Levis said. “So, as a result of this bill, the 70 percent … would be subsidizing those above.”
The plan, approved by the Colorado Public Utilities Commission last spring, calls for consumers to pay 4.6 cents per kilowatt hour for electricity they use during summer months, jumping to 9 cents per kilowatt hour above 500 kilowatt hours. A consumer whose usage is just below that threshold would pay $23 a month, but someone who uses twice that amount would pay three times more, or $68.
Scott said he’s been told the average consumer uses more like 680 kilowatts a month. He said the real problem is the level was set too low.
“They’re throwing out 70 percent, but there’s no factual backing of that number,” Scott said. “All we’re asking them to do is stop the plan. Xcel has every right to go back to the PUC and come up with a different plan.”