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The first of Xcel’s “smart meters” is installed on Wednesday, June 30 at a residence in Littleton. The new meters read household energy use in real-time, designed to give customers more accurate reads. Almost all 1.6 million Xcel Colorado customers will have smart meters by the end of 2023. (Olivia Sun, The Colorado Sun)

It took Xcel Energy project manager Wade Cruser a little less than three minutes to pop the old electric meter off the side of a Littleton home and slap on the future of electricity use and billing for utility’s Colorado customers — a “smart meter.”

These meters read household energy use in real-time and report it back to Xcel. They will give customers a clearer and more precise picture of their energy use and enable Xcel to implement time-of-use rates, charging more at peak demand times and less during low-use periods.

Xcel crews will be installing meters at about 15,000 homes and businesses a week, starting in Denver, Aurora and the surrounding suburbs, with 395,000 slated to be in place by the end of the year. Almost all 1.6 million Colorado customers will have smart meters by the end of 2023.

The Colorado Public Utilities Commission gave Xcel a green light to spend up to $419 million to install the devices, known as advance installation meters, or AIM.The cost will be passed on to customers.

The real-time readouts will give a household a better handle on when and how much energy they use, said Xcel Energy-Colorado President Alice Jackson. “It will give more transparency, more control.”

It will also tell Xcel how well the grid is operating. “We will know when there is an outage without a call from a customer,” Jackson said.

The biggest change, however, may be moving all of Xcel’s residential customers to time-of-use rates, with an eye toward shifting when people use energy and avoiding sharp and costly peaks in electricity demand.

Time-of-use rates have already been implemented or are in pilot programs at utilities from Virginia to California. Fort Collins, where everyone already has smart meters, shifted to time-of-use rates in 2018.

Late last year, the PUC approved a time-of-use rate schedule for Xcel. After customers get their smart meters they will slowly be shifted to the new rates used to calculate their bills. The lag is intended to allow customers to see their usage before the new rates kick in.

The rate schedule was agreed to by Xcel and consumer and environmental groups. The consumer groups were concerned about the impact of the new rates on low-income families and the elderly.

The time-of-use rates are designed to be revenue neutral, so that Xcel does not receive more revenue than it gets now for selling kilowatt-hours at a flat rate. Customers also have the ability to opt-out of the time-of-use rates. 

Under the time-of-use rates there will be three sets of charges for three different time periods.

The peak period will be from 3 to 7 p.m. Monday through Friday, when kilowatt-hours (kWh) will cost 13.9 cents in the summer and 8.7 cents in the winter.

The shoulder period will be weekdays from 1 to 3 p.m., billed at 9.5 cents per kWh in summer and 6.9 cents in winter.

All other hours, plus weekends and holidays, are considered off-peak and billed at 5.1 cents per kWh no matter what the season.

Under Xcel’s current two-tier summer rates customers pay 5.5 cents for each of the first 500 kWh and 9.9 cents for each kWh above that. The average Xcel household uses about 715 kWh a month during the summer, according to a study done for the utility by Navigant.

The hope is that customers will shift more of their energy demand to the cheaper time periods, making better use of generating resources and avoiding big surges in electricity demand, when the utility has to bring on so-called peaker plants, which are expensive to run.

A Berkeley National Laboratory study, for example, estimated that if Californians shift 20% of their demand out of the peak period to the early afternoon, when there is ample solar generation, they could save $700 million a year by 2025.

Mark Almer, who also works for Xcel, stood in his backyard watching Cruser change out his electric meter — Xcel had arranged this ceremonial changing-of-the meters for the press. Almer pointed to a new, upgraded electrical panel next to his new smart meter.

The panel, he said, was put in to accommodate the electrical vehicle the family is planning to buy. “Being able to charge that at night at the lowest rate would be a plus.”

Special to The Colorado Sun Twitter: @bymarkjaffe