Xcel’s Flex Pricing Pilot encourages shifting energy use to reduce peak demand

Published July 7, 2021

Xcel Energy began its Flex Pricing Pilot program in November 2020. Participants in the program are charged different electricity rates based on the time of day they use energy. The program is underway in areas around south Minneapolis and Eden Prairie until November 2022. Summer, when demand for electricity is greatest, is an important time for participating customers to manage their energy use and take advantage of lower prices in non-peak times of the day.  

Demand for electricity tends to peak between 3-8 PM on weekdays. Electricity typically costs more to produce during this time and may require using more energy from power plants that rely on fossil fuels. Time of use rates, such as Xcel’s Flex Pricing pilot, are intended to shift energy demand to better meet the supply of energy.

Because air conditioning is a driver of energy use in the summer, managing when you use it is key to saving money for those participating in the Flex Pricing pilot. Even if you aren’t participating in the pilot program, it is helpful for the entire electricity grid to shift energy use to periods of less demand and when more renewable energy is available. For example, you can prioritize air conditioning in the overnight hours and use fans during the daytime to keep the air circulating. Xcel has additional suggestions for shifting demand to take advantage of cleaner energy on their website. 

Time of use rates, such as the Flex Pilot program, have a strong potential to help manage the grid, support more renewable energy, and save consumers money. CUB is looking forward to tracking the progress of the pilot program over these two years.