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Xcel Energy proposes new pricing model
Under “Time-of-use” pricing, running AC could cost 7x more during afternoon/evening hours versus overnight. Xcel says customers would save. One expert is skeptical.
MINNEAPOLIS — Travelers have long been accustomed to paying more for a flight, or an Uber ride if traveling during times of peak demand. But what if the concept applied to your dishwasher or air conditioner?
At the request of the Minnesota Public Utilities Commission, Xcel Energy has submitted a proposal that would implement so-called “Time-of-use” pricing for all of it’s residential customers in Minnesota next year.
“I do think the time has arrived for time-of-use pricing,” said Ahmad Faruqui, an energy economist with more than 40 years of experience studying energy rate and pricing design. “Time of use pricing is designed to send a signal to the consumer that this is an expensive time, please use less, shift some of your load to less expensive hours.”
Faruqui says spreading energy usage across off-peak hours is growing in importance since more utilities depend on wind generated power, while the installation of smart meters is allowing them to charge variable rates.
“The pricing will really appeal to people with electric cars and people with smart thermostats and flexible lifestyles,” he said. “They can adjust the thermostat setting on their air conditioner, and potentially save money while taking stress off the grid.”
But after reviewing the proposal by Xcel Energy, and studying the rollout of its pilot time-of-use pilot program in Minnesota, he’s not convinced it will be effective.
“It’s too big of a change, done very abruptly,” Faruqui said.
Xcel currently has a flat summer rate of about 13 cents/KWH. According to the time of use proposal sent to the PUC, the rate during the four summer months would jump to nearly 28 cents during peak hours between 3 p.m. and 8 p.m. on weekdays, but it would fall to less than 4 cents between 12 a.m. and 6 a.m. All other hours would have a base rate of about 15 cents.
The current winter rate is about 11 cents per hour. That would jump to 19 cents during peak hours, drop to 4 cents during off-peak times and 9.5 cents the rest of the time.
Faruqui says he’s concerned that big discrepancy could backfire.
“We have about a dozen other states that are doing this,” he said. “I looked up the numbers for a lot of these programs, including Xcel Energy in Colorado, and based on what I’ve found, their price differential is like 2.5 to one, not five to one – or more – like it could be in Minnesota.”
Overall, Xcel projects an average customer’s bill would increase about 18% during the four summer months, but decrease by nearly 11% the rest of the year. But that is assuming no change in behavior. If customers shift their energy usage to more off-peak times, the savings could add up, but Faruqui says that’s not likely to be the case.
“I have done a lot of studies and they are all showing that this is good for the vast majority of customers in theory,” he said. “But people don’t do what the economic models imply they should do.”
He says that seems particularly true when looking at Xcel’s own time-of-use pricing pilot program, which included some homes in Eden Prairie and south Minneapolis over a two-year period. According to Xcel, the pilot led to some moderate shifts in energy use during peak hours, but a small group accounted for the biggest shifts. Likewise, the pilot led to small savings overall, though it was driven by a small percentage of customers.
Farugqui: “If the pilot was truly representative of the population, then you’ll probably only get 10% of the people responding, so why bother the other 90%? Why not just make it an optional rate? Let those who want it, take it. Don’t suddenly impose it on every customer.”
Kent Erdahl: “Xcel points out that you will be able to opt out.”
Faruqui: “But they won’t. I have seen a lot of these over the last decades and people don’t opt-out. People are very busy, they’re overloaded, and honestly, I must admit it comes across as big brother.”
In a statement sent to KARE 11, Xcel Energy spokesperson Theo Keith, reiterated that, if approved, customers will be able to opt-out of the time-of-use rates, while reiterating the potential cost savings and potential benefits that would come with the pricing shift.
“A Time of Use rate reduces the total amount of energy that we need to provide during peak times when everyone is using electricity. This would allow us to avoid building new power plants, keeping the total cost of electricity lower.”
This summer the Minnesota Public Utilities Commission (PUC) will consider the time-of-use proposal from Xcel Energy. The PUC currently has an open notice of comment period on the proposal until April 15. To learn more about getting involved, watch this video or visit this webpage.
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The big winter celebration is returning to its roots after a few years in Loring Park and canceling in 2023.
MINNEAPOLIS — A venerable holiday festival is getting back to its roots, as Holidazzle returns to Nicollet Mall after a year’s absence.
Organizers on Wednesday announced that Holidazzle 2024 will be a 5-day free festival held on the mall from 6th Street to Peavey Plaza (11th Street) from Wednesday, Dec. 18 to Sunday, Dec. 22. The event is billed as being a family-friendly holiday experience, with seasonal activities, food and entertainment that will offer a boost to small businesses.
Holidazzle highlights include:
- Light & art installations
- Holiday shopping pop-ups featuring Minneapolis Craft Market, Dayton’s Holiday Market, Chameleon Shoppes featuring BIPOC women-owned vendors and Minneapolis Vintage Market
- Two entertainment stages
- Free Roller Skating and Minne-Golf
- Visits with Santa
“Holidazzle is the perfect way to bring people together to celebrate our beautiful city in our winter season,” said Minneapolis Downtown Council president and CEO Adam Duininck. “From Minnesota-made treats to community performances to families making their holiday memories, it’s a true showcase of the talent, creativity, and spirit that makes Minneapolis shine!”
While Holidazzle is free and open to the public, patrons can buy a “Friends of Holidazzle” pass that offers valet parking, access to indoor restrooms, a limited-edition souvenir and a Santa “fast pass.” The passes are available for purchase starting Nov. 1, and are partially tax-deductible.
Also new is a Holidazzle Hospitality Hub, a private indoor location designed to host holiday parties for groups from 50 to 1,000 guests. The Downtown Council will work with groups to provide festive seasonal decor, an audio system with playlists and more. Those interested can contact the council for more information.
Interested in the complete schedule of events? Check out the Holidazzle website.
Holidazzle has its roots on Nicollet Mall, including the legendary parades, but in recent years has been held in Loring Park. In 2023, organizers announced that the holiday festival would not take place due to a lack of funding but promised it would be “a one-year situation.” Wednesday’s announcement shows the Downtown Council kept its word.
Investigators think the student lost control of the e-bike, then hit a curb and a tree, according to the Tigard Police Department. He was wearing a helmet.
Luisa Anderson, Amy-Xiaoshi DePaola, Joe Raineri (KGW)
10:12 AM CDT October 2, 2024
3:49 AM CDT October 3, 2024
TUALATIN, Ore. — A high school student is dead after an e-bike crash Wednesday morning.
The student, a sophomore at Tigard High School, was found dead by a passerby on the side of Southwest 124th Avenue in Tualatin, near Southwest Myslony Street. Police saw the student laying on the ground with an e-bike nearby.
Investigators think the student lost control of the e-bike while traveling south, then hit a curb and a tree, according to the Tigard Police Department. He was wearing a helmet, and no cars were involved in the crash. E-bikes can reach speeds of up to 35 mph.
During the investigation, the southbound lanes of Southwest 124th Avenue were closed between Southwest Myslony Street and Southwest Tualatin-Sherwood Road.
Sigma Alpha Epsilon hosted a special drive to sign up students.
MINNEAPOLIS — University of Minnesota fraternity Sigma Alpha Epsilon is working to sign up hundreds of college students to become bone marrow and stem cell donors.
The frat has been partnering with NMDP, a global nonprofit leader in cell therapy. For years it has helped register around 1,000 students.
“A big thing for us is just trying to show people fraternities aren’t just like partying and drinking and stuff like that like we actually like to give back to the community,” said Axel Arnold.
The 20-year-old joined the registry last fall through his fraternity. In the spring, he learned he was a match for a 54-year-old man and decided to donate his stem cells.
“I didn’t really think it was like too heroic or anything,” Arnold said. “If I was in that same position, I’d want somebody to do the same thing for me.”
His experience compelled him to organize the special drive at his fraternity Wednesday night. In a few hours, they registered 75 people.
“These student groups really want to make a difference. They care about their culture, they care about their society,” said Keesha Mason with NMDP, formerly Be The Match.
Mason said it’s important to get young people connected with their mission, so they’ll want to become donors. Her words inspired Arnold to sign up last fall.
“Most people think young men are disconnected but on health stance young 18–35-year-olds their stem cells, I don’t want to say are fresher, but their stem cells when they’re put into a patient that needs a match gives those patients better outcomes,” she said.
Studies of stem cell transplants have shown young donors, between the ages of 18 and 30-year-olds lead to the highest survival rates. Young men are ideal donors because they can donate a larger volume of cells, leading to higher survival rates.
Currently the stem cell registry includes about 9 million people, but the percentage of 18-24-year-olds is low.
It’s why NMDP is working to change that, meeting young people where they are at. Laney Bay was walking home when she saw NMDP in Sigma Alpha Epsilon’s front yard.
“I’ve had a lot of friends who have struggled through different medical issues in the past and it’s very interesting to me, and I want to make sure I can do what I can,” she said.
Arnold is hopeful more young people will sign up to become donors and said he would donate again if he got the call.
“It was pretty quick. I would say like actual effort I had to put into it was like probably about a half day of work towards doing it and I mean a half a day of work for a life is insurmountable,” Arnold said.
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