New resolution allows utility pricing changes

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City Council passed a resolution Tuesday allowing Colorado Springs Utilities to authorize certain tariff changes to modify its time-of-use services, in which businesses can choose to re-allocate energy usage and save money. Three options are geared toward reducing the cost of electricity for commercial and industrial users, said Dennis Senger, pricing manager for Colorado Springs Utilities.

CSU is contacting all of its industrial and commercial customers to schedule times to discuss the three options and help customers decide which might work best. Businesses will be able to decide how many -energy they want to allot for rescheduling; however, the amount of energy companies can donate for rescheduling usually starts around one megawatt.

To put a megawatt into perspective, on a typical day one house uses three to four kilowatts, said Senger. One megawatt will light about 300 to 400 homes. Also, on a peak day CSU requires 700 megawatts to transfer energy to its customers.

“By next summer we’re hoping to reduce peak hours by 30 megawatts through these three programs,” said Senger.

Behind door No. 1

The first offer is the interruptible rate plan, in which customers agree to reduce their energy usage to a predetermined level; the minimum amount customers can agree to is one megawatt. CSU will give them a lower rate for the interruptible time of the load.

For example, industries might be able to reschedule when a large piece of equipment runs, said Senger.

“We have less than 100 customers (to whom this) would apply and … we expect there will be a handful, three to five, who would find this rate attractive to them,” said Senger. “Not every customer can reduce (their energy load).”

This type of plan has been implemented in the past. CSU officials say some of the conditions have changed, and customers who in the past haven’t liked it may like it now.

Door No. 2

During peak hours it costs more not just to receive energy, but to run energy. Customers pay three cents more per kilowatt-hour during peak time than during non-peak time. For CSU there are 16,050 peak-period hours per year. In the Kilowatcher option, CSU identifies three types of service periods: super-peak, peak and off-peak. CSU designates 100 hours annually as super-peak, during which the price is 17 cents per kilowatt-hour. CSU notifies customers at least 24 hours in advance when the super-peak hours will occur. Prices for the other hours will be reduced.

By shifting their high electrical use to another time customers save money. The amount a company can save varies with each program and the number of watts it reduces its use by, said Senger.

“This method is available for 200 customers who use enough kilowatts-hours to fit this rate,” he said. Customers must donate a minimum of 4,000 kilowatts to qualify for this program.

Last but not least

CSU buys energy on the open market, sometimes at rates up to $300 per megawatt hour. As CSU’s rates increase, so do customers’.

In an effort to help CSU and its customers save on bills, the Voluntary Economic Curtailment Program requires that customers receive notification 30 minutes prior to CSU using the more expensive energy. If customers then reduce their watt usage to a predetermined amount, CSU will pay them for a portion of the unused energy.

“When we’re paying $300 per megawatt hour, then we would offer customers a portion of the savings if they do not use watts during that time,” said Senger.