The Colorado Public Utilities Commission approved a sweeping settlement between Xcel Energy and two dozen parties on Wednesday, paving the way for more flexible electricity rates and a bigger role for solar generation.
“The decision will allow us to give our customers more control over their energy choices,” Alice Jackson, regional vice president for rates and regulatory affairs with Xcel Energy, said in a statement.
The settlement, which the PUC approved without modification, resolves Xcel’s 2017 Renewable Energy compliance plan, a solar subscription program and the company’s phase II electric rate case and headed off months of wrangling.
The settlement allows for a pilot program to test “time-of-use” rates and another to test demand charges. The first would adjust electricity rates based on low- and high-demand periods, while the second would pass on higher charges if a customer’s total demand went over a pre-set cap.
Better aligning power supply and demand could help lower overall electricity costs and make it easier to bring more renewable energy resources into the mix, supporters argued.
“This decision continues the trend that Colorado is a national leader in thoughtful development of renewable energy,” PUC chairman Joshua Epel said in announcing the settlement.
The settlement provides for an additional 225 megawatts in rooftop solar, 117 megawatts in community solar gardens and 60 megawatts in power generated from industrial waste heat over a three-year period.
It creates solar energy programs for low-income households with up to 18 megawatts of capacity and permits Xcel Energy to build 50 megawatts in utility-scale solar for its Renewable Connect program.
“Plain and simple this means more clean and affordable energy for Coloradans. Today’s decision also breaks the stalemate between utilities and rooftop solar interests by advancing fair rates for rooftop solar, customers, and the utility,” said Jon Goldin-Dubois, president of Western Resource Advocates, in a statement.
Under the settlement, Xcel will drop its proposal to implement a grid charge that would have boosted costs for owners of rooftop solar arrays. Instead, customers who place power onto the system will receive more favorable net metering rates and have fewer restrictions on storing surplus energy.
But not everyone was happy with the settlement, in particular community solar garden developer SunShare. The company argued the agreement gave Xcel Energy an unfair competitive advantage, given that state law limits private community solar garden developers to less efficient small-scale facilities.
