Starting next year, Xcel Energy customers will be able to take advantage of a program with electricity rates that vary based on the time of the day.
Customers will need to voluntarily opt in to that program, which offers its cheapest rates from midnight to 6 a.m., the most expensive prices from 6-9 p.m. on weekdays, and a middle-tier price the rest of the week.
The program will not automatically apply to everyone, as the company once proposed.
In theory, the varying rates incentivize people to shift when they use electricity, easing pressure on the grid during peak times and cutting down on Xcel’s expenses to support the heavy use.
For households that use less electricity during peak times, the program could also be a money saver.
In 2018, the state Public Utilities Commission (PUC) asked Xcel to come up with a plan to implement time-of-use rates for all residential customers after finishing a pilot project.
Xcel’s eventual proposal, announced in December 2023, would have made those varying rates the default for all households. While people could have opted out, the proposal drew sharp backlash from customers and several consumer advocates, including Attorney General Keith Ellison. Xcel’s proposed significant gap between peak rates and off hours would have [made the utility a national outlier](https://www.startribune.com/xcel-plans-higher-electric-rates-during-peak-evening-hours-lower-overnight-costs/600341312), according to one rates expert.
Now, Xcel is taking a more modest approach with the opt-in program. The PUC voted 3-0 in favor of that scaled-back plan.