Give tiered rates a chance
Xcel Energy’s tiered rate structure for summer electric rates — charging a higher rate for those who use more than 500 kilowatts of electricity — will be tested for the second season this year. That is, unless a Grand Junction lawmaker is successful in killing the plan.
Rep. Ray Scott’s bill to halt the tiered rate structure was heard in committee last week. He says it is unfair to average homeowners.
But officials with Xcel make a good case that not having the tiered structure is unfair to those with smaller houses, or those who use swamp coolers rather than refrigerated air conditioning to cool their homes.
Under current rates, those who use under 500 kilowatt hours of electricity a month — approximately 70 percent of homeowners, Xcel says — effectively subsidize those who require more. The tiered electric rates simply do what many municipal water rates do — charge more to those who use the most to discourage excessive use.
Xcel isn’t opposing Scott’s bill however.
Scott says the 70 percent figure is wrong, but he offers little information to dispute it. He also has said the problem isn’t so much the concept of the tiered rate structure, but that the level for reaching the second tier is too low, that it should be 680 kilowatt hours instead of 500.
But if that’s the case, why didn’t Scott just try to change the tier level, not end the tier system altogether this year?
More to the point, Xcel officials acknowledge they don’t know yet how well the tiered rate structure worked to encourage electric conservation. They need more data, and more than one season of having the rate structure in place, to obtain a better analysis.
Scott and other members of the state Legislature ought to give the tiered rate structure a chance before working to legislatively kill it. Here’s hoping his bill, HB 1271, doesn’t survive long in this legislative session.