Colorado Springs Utilities could increase rates for solar users

COLORADO SPRINGS, Colo. (KRDO) - Colorado Springs Utilities (CSU) is introducing an "Energy Wise time-of-day rates" as its standard electric rate. Additionally, the utility group plans to propose updates to its Net Metering Program.

CSU describes net metering as a way to track how much solar energy its customers use and how much is sent back to the grid.

In an email sent to CSU solar customers obtained by KRDO13, CSU wrote that the updates to the Net Metering Program would ensure that rates reflect the true cost of delivering electricity, especially during peak demand periods. The utility group wrote that with this proposal, net metering customers will not transition to Energy Wise time-of-day rates; rather, they will transition to an Energy Wise Renewable Net Metering Rate Option in January 2027.

"We've had this program in place since 2005. And when we had just small numbers, really, inside of the first few years, we had around 50 customers that were participating, and that's grown to almost 9000 customers. And as we see more solar generation, not just on rooftops, but on large-scale providers that we're purchasing from as well, the price points have just changed, and we really haven't adjusted a lot inside of what we're doing from the costs that are going out there. So with so many more customers now participating in our solar programs, we have a large amount of solar that we're buying at a price that's not advantageous for our customers," explained CSU Chief Financial Officer, Tristan Gearhart.

So what does this mean? CSU says not all energy is created equal. On weekdays from 5-9 p.m., electricity demand spikes, and so do the costs to purchase and deliver power. While solar production peaks midday, it drops significantly during these high-demand hours when energy is most expensive.

"All the other hours that are not but 5 to 9, Monday through Friday, are off-peak and they're at a lower price. So we really are encouraging customers to see if they can shift some of that usage. And what we'd like to do is encourage our solar customers to do the same," said Gearhart.

They say that while solar users have been paying a flat rate during the peak hours, others are having to pay more to cover the costs.

This proposed change means solar customers face a bigger cost for energy use in those hours since they aren't producing as much solar, if any, at that time. It also won't necessarily bring rates down for non-solar users since they're already set for the next five years. 

CSU provided this graphic to rate payers to visualize the high-demand hours and solar energy production in a typical summer Net Metering Customer.

CSU says that right now, Net Metering customers, solar users, are billed at a flat rate that does not reflect these peak costs. As a result, CSU says customers without solar are covering about $600 per year for each net metering customer. CSU describes this cost shift as not sustainable or fair to the broader customer base; however, some solar users disagree with this claim.

"There's zero financial incentive to get solar. Now it's just on the homeowner to say, I want to be zero by myself. I want to be zero carbon," stated John Tompkins.

KRDO13 asked CSU about the potential lack of financial incentive for solar that this would pose to customers. The utility organization said they have to look at the rates all customers are paying, not just solar users.

"All I would say to that is, as an organization, we're a not-for-profit organization. So we have to look at our cost structure that's there. As we've gone back and seen this large shift in cost that is there, and we've now identified that there is this $5.5 million that's being paid by one group of customers, but not the others. We have to take action to make sure that we are addressing that. All of our rates are subject to change at different times. The City Council is the ultimate body that has to make the decision on those. But it's our job as a utility to make sure that we're providing the information in the best way that we can about what our true costs are to operate our system," answered Gearhart.

John Tompkins says this proposal is pulling the rug out from under those who made the change to renewable energy.

"That's going to take away a lot of consumers. It's going to degrade the trust that they have in the utility company," Tompkins shared.

Tompkins says he's happy to shift his energy usage out of the peak hours but feels there needs to be more data shared to explain where these estimates are coming from.

"I think the main flaw with the $600 number that they came up with was that it doesn't value the current solar systems that have already been installed and the value that they've already provided to the grid. So the homeowners are paying that money upfront, they're adding value to the grid, they're adding redundancy and balance to the grid, which is the overall goal of what I understand CSU is trying to do, and I support that. However, they say $600, and then they don't give you a reason why they came up with $600," shared John Tompkins, a Colorado Springs solar user.

So what are the changes the utility group proposed? In an email sent to solar users, CSU described this for the proposed option:

Current rate option:*

1 Access and Facilities Charge (Per Day), which helps cover fixed costs of maintaining the grid.

2 Access and Facilities Charge (Per kWh), which reflects energy usage and delivery costs.

Proposed rate option:*

1 A slight increase to the Access and Facilities Charge (Per Day).

2 A decrease to the Access and Facilities Charge (Per kWh).

3 The addition of a Demand Charge (Per kW Per Day), which accounts for energy demand during peak hours.

• Based on the highest 15-minute demand recorded during on-peak hours (Monday through Friday, 5 p.m. to 9 p.m.) within the billing period.

*In addition to Electric Cost Adjustment and Electric Capacity Charges.

The utility group also provided this graphic as a visual explainer:

If City Council approves the changes, CSU says it estimates the average net metering customer will have an electric bill increase of approximately $50/month.

"So when the email came out and it said the average solar panel customer bill will increase by $50. And my bill, currently for my electricity, can be anywhere from $30 to $150, depending on the time of year. So we're looking at a possible double charge, you know, doubling the bill. I don't know what that means in terms of if something happens in the house, like if the oven's on from 5:00 to 9:00 when you're cooking, and then the stovetop turns out, and that's an electric stovetop. That's a lot of wattage as well. Oh, the heat pump tried to turn on during that same time. How is that going to affect the consumer? And we don't know that answer yet," pondered Tompkins.

CSU says those added payments will come in the form of energy usage. The utility company says that the $50 is an estimate based on energy usage during the peak hours.

It all comes down to a final vote from the city council, but before that, there will be hearings. One on October 14 is where CSU says you can make your voice heard on this proposal; they also ask community members with concerns to reach out to CSU. 

"If anyone has questions or concerns, please reach out to the utilities. Folks are able to call through our customer service line, and they can direct calls to me. I'm happy to talk to anyone about why we're looking at these changes. I want to be able to provide as much information as we can, because I do think there is messaging there that is important. If you're a solar customer, we're asking you to do the same thing that the rest of our customers are doing, which is shift some of that power usage off the 5 to 9 period," shared the CSU CFO.

Following the initial hearing, the City Council is expected to decide on October 28. If approved, the Energy Wise Renewable Energy Net Metering Options take effect Jan. 1st, 2027.

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