- The Colorado Public Utilities Commission (PUC) denied the application for an $800,000 residential time of use (TOU) pilot from Black Hills Energy to avoid negatively impacting low-income customers.
- PUC had directed the utility last summer to implement a pilot within a year to enable customers to shift consumption and control their bills by leveraging existing advanced metering infrastructure (AMI). However, regulators are concerned that a new rate would not be sufficient to help lower-income customers control their bills.
- The pilot application was partly recommended in April by the administrative law judge, but the latest decision set it aside entirely. "Black Hills and stakeholders need more clarity from the Commission of the objectives of a residential time-of-day rate pilot program," the PUC decision read.
PUC Chairman Jeffrey Ackermann suggested that TOU "in concert with" targeted demand side management strategies could lead customers, including those with lower income, to take control of their bills. He noted in his concurring opinion with the ruling that the combination of AMI-based price signals and DSM merits further exploration.
"If a primary objective is to better empower customers to control their bills, other strategies such as Demand Side Management are more likely to achieve the desired results," Ackermann wrote in his opinion.
Black Hills began developing a TOU pilot for its 85,000 customers when the PUC set an implementation schedule aiming to have the rates in place by June of this year.
The goal of the pilot was to assess "if customers would change the way they use electricity if given price signals that would coincide with periods of peak demand on the electrict system," Black Hills said in a statement.
Former Commissioner Wendy Moser warned the state was moving too quickly on TOU last year and opposed the PUC ruling to require the Black Hills Pilot. She favored waiting for the results of Xcel Energy's Colorado TOU pilot to come out.
Black Hills estimated the total pilot cost to be $801,000. The utility sought to randomly select participants and create two time-of-day pricing periods: on-peak in the early evenings from Monday through Friday, and off-peak. Summer months would have a 3:1 ratio between on-peak and off-peak periods, which would reduce to a 2:1 ratio during non-summer months.
Commissioners had ruled on June 6 to remove the June implementation deadline, citing the need to modify some parts of the administrative law judge's recommendation.
"It's our understanding that the Commission's decision to cancel the pilot was independent of our efforts to thoughtfully design and create the program as intended," Black Hills said.
Regulators decided to reject the TOU application based on testimonies from stakeholders from lower-income areas of the state, such as Pueblo County.
"TOU will harm customers in southern Colorado," Commissioner Frances Koncilja wrote in her opinion.
"I could not see how this rate structure would not detrimentally impact low income customers," Commissioner John Gavan wrote in his concurring opinion.
"While the pilot program will not move forward, we continue to help our customers manage their energy costs by providing information and resources that promote the efficient use of energy at home," the company said in a statement.
Energy consumption data tracked through AMI meters is available for the utility's customers online.