St. Elmo.
Energy & Sustainability Insights · Boulder, Colorado
Xcel Energy Rate Analysis · May 2026
Xcel Energy · Colorado TOU Rates · Demand Management

What if you could reduce your electricity price by two-thirds?

The Four-Hour Window
That Changes Everything

Xcel Energy's new Time-of-Use rates create a striking opportunity hiding in plain sight: 20 hours of every weekday carry deeply discounted electricity at 7.9 cents per kWh. Only four hours — 5 to 9 p.m. — cost 21.3 cents. Protect those four hours and you've effectively cut your rate by 63%. Here's how to do it, and why the economics have never been better.

Most of the conversation about Xcel Energy's updated Time-of-Use rates has focused on what customers will pay more — evening television, charging EVs after dinner, running the dishwasher at 6 p.m. That's the wrong frame. The real story is what becomes dramatically cheaper: everything outside a narrow four-hour weekday window. For commercial facility managers, that framing changes everything about how you approach energy costs.

But before any strategy can be designed, deployed, or evaluated, one thing comes first: understanding your facility's actual load profile. Without knowing how much electricity you consume during on-peak hours — and what's driving it — you're optimizing blind.

"Every kilowatt-hour you shift out of the 5–9 p.m. window saves you 13.4 cents in summer. That's a 63% reduction in your electricity price for that unit of energy. The question is: how much of your load actually falls in that window?"

— Dan Frey, CEM · St. Elmo LLC

The Rates, In Plain Terms

Effective November 1, 2025, Xcel Energy's residential and small commercial customers in Colorado operate under a simplified two-tier TOU structure. The old mid-peak tier is gone. There are now just two prices: on-peak and off-peak.

Summer On-Peak
21.3¢
Per kWh  ·  5–9 p.m. weekdays  ·  June–Sept
Summer Off-Peak
7.9¢
Per kWh  ·  all other hours  ·  June–Sept
The Spread
2.7×
On-peak costs 2.7× more than off-peak, year-round
PeriodHoursSummer (Jun–Sep)Winter (Oct–May)
On-Peak5:00–9:00 p.m.  ·  non-holiday weekdays only21.3¢/kWh18.3¢/kWh
Off-PeakAll other hours + weekends + holidays7.9¢/kWh6.8¢/kWh
Flat Rate (opt-out)All hours, flat~10.0¢/kWh~9.0¢/kWh

Source: Colorado PUC, 9News, CPR News, Xcel Energy rate schedules. Base rates; riders and adjustments apply.

Your 24-Hour Price Map

The chart below shows exactly what you pay — hour by hour — on a typical non-holiday weekday. Toggle between summer and winter rates. The four red bars are the danger zone; every green bar is an opportunity.

Xcel Energy Colorado — Hourly TOU Rate (¢/kWh)
NON-HOLIDAY WEEKDAY  ·  2025–2026 APPROVED RATES  ·  HOVER BARS FOR VALUES
On-Peak (5–9 p.m. weekdays)
Off-Peak (all other hours, incl. weekends)

The 20-for-4 Trade

Step back and look at the arithmetic of a single weekday. There are 24 hours. On-peak hours — the window that costs 2.7 times more — occupy exactly four of them, on non-holiday weekdays only. The other 20 hours run at the low off-peak rate. Weekends and holidays are entirely off-peak. Over the course of a full year, on-peak hours represent only about 8% of all available hours.

Off-Peak Hours per Weekday
20
7.9¢/kWh
Midnight through 5 p.m., then 9 p.m. to midnight. Plus all day on weekends and holidays. The vast majority of every week runs at the lowest available rate — cheaper even than the flat-rate opt-out.
On-Peak
4
21.3¢
Weekdays only
5–9 p.m.

For many facilities, this asymmetry is genuinely manageable. A school building largely vacated by 4 p.m. A light manufacturing plant that runs day shifts. An office where the HVAC and lighting load drops sharply as employees leave. A warehouse on a morning-to-afternoon schedule. These facilities may already be well-positioned — or just a few scheduling adjustments away from capturing most of the off-peak advantage naturally.

The key question is not whether the rate structure is complex. It isn't. The key question is: what percentage of your electricity actually falls in those four hours? That number — and the nature of the loads driving it — determines everything about your strategy.

Start Here: Understanding Your Load Profile

No load management strategy can be designed, prioritized, or properly evaluated without a clear picture of your facility's actual consumption pattern. A load profile — drawn from 15-minute interval data — tells you exactly when your electricity is being used, how much, and by implication, what equipment is responsible. This is the foundation of every dollar of TOU savings.

The questions your load profile must answer are specific:

Load Profile: The Questions That Drive Strategy
Pull 15-minute interval data from your Xcel account to answer each of these

Xcel Energy provides 15-minute interval data through the My Account portal for customers with smart meters. This data can be downloaded as a CSV and analyzed in a spreadsheet in a matter of hours. For larger or more complex facilities, a brief professional energy audit can map the load profile against building systems and quickly identify where the highest-value interventions lie.

Who Is On TOU — And Who Controls the Switch?

Before designing any load management strategy, it's important to understand exactly which accounts are subject to TOU rates, what the switching rules are, and — critically for commercial customers — which rate schedules carry demand charges. The answers are more nuanced than most utility customers realize.

TOU Eligibility by Customer Class

Residential customers (Schedule RE-TOU) are the primary target of the November 2025 rate restructuring. All residential customers with a smart meter (AMI meter) installed are automatically enrolled in TOU rates. Smart meter installation typically triggers TOU enrollment 4–10 months after the meter is in place. Customers without smart meters remain on the legacy flat rate but may incur a $13–$26 per month manual meter-reading fee if they decline installation.

Small commercial customers with smart meters are also enrolled in the new TOU structure under the updated tariff. The Colorado PUC's language specifically covers "residential and small commercial customers" as the primary impacted class under Proceeding No. 24AL-0377E. Larger commercial and industrial customers operate under separate rate schedules — Schedule SG (Secondary General), Schedule PG (Primary General), Schedule TG (Transmission General), and their TOU and Critical Peak Pricing variants — which have their own demand charge structures and are not part of the residential TOU case.

Medical exception customers may qualify for a modified flat rate. Customers with a verified medical condition that necessitates high, time-inflexible electricity use should contact Xcel at 1-800-895-4999 to discuss the Medical Exemption Program (Schedule R MEP).

Notification and Timing: Switching On and Off TOU

TOU Opt-Out & Opt-Back-In: The Rules
Xcel Energy Colorado · Schedule RE-TOU / R-OO

Which Customer Classes Face Demand Charges?

Demand charges are a commercial and industrial billing feature. Standard residential customers on Schedule RE-TOU or the flat-rate R-OO do not pay explicit demand charges — their entire bill is energy-based (¢/kWh). The one residential exception is Schedule RD (Residential Demand), a legacy rate available to a small number of larger residential customers, which does include a demand component.

For commercial and industrial customers, demand charges are a core billing element across all major rate schedules:

Xcel Colorado Commercial Rate Schedules Subject to Demand Charges
Public Service Co. of Colorado · P.U.C. No. 8 Electric Tariff

How Xcel Calculates Your Demand Charge: The Formula

Understanding the demand charge formula is essential because it explains both why demand charges are so significant and exactly what you need to do to reduce them. Xcel's tariff defines the billing demand formula as follows:

From Xcel Energy P.U.C. No. 8 Electric Tariff — Demand Definition

The Demand Charge Formula

Billing Demand (kW)
= Maximum 15-minute integrated
kW demand recorded during the billing month

Billed in full kilowatt increments
The tariff defines "Measured Demand" as the maximum 15-minute integrated kilowatt demand used during the month. Billing demand equals measured demand, billed in full kW increments. One reading — the single highest 15-minute interval — sets the charge for the entire month.
Monthly Demand Charge
= Billing Demand (kW)
× $/kW Rate

Summer: ~$27.65/kW
Winter: ~$20.31/kW
(Schedule SG, all-in)
At $27.65/kW summer, a facility with a 200 kW peak demand pays $5,530 in demand charges that month — regardless of whether the peak lasted 15 minutes or all day.

Example: The Cost of One Spike
$553
Cost of a single 20 kW demand spike above baseline (20 kW × $27.65) — billed for the full month even if it occurred only once.
Reduced by 20 kW Demand Control
$6,636
Annual savings from a sustained 20 kW demand reduction at summer rates ($553 × 12 months, blended seasonal).
Key Takeaway
15 min
That's all it takes. The highest 15-minute reading of the month sets the charge. Control that window and you control the bill.

The practical implication is stark: demand charge management is not about reducing overall consumption — it is specifically about controlling the shape of your load curve at its peak. A facility that runs 100 kW steadily all day and briefly touches 160 kW for 15 minutes at 5:15 p.m. on one Tuesday in August is billed on 160 kW for the entire month. Shaving that one spike to 120 kW saves $1,106 at Schedule SG summer rates — from a single 15-minute intervention.

The Bill You're Not Paying Attention To

Energy charges — the per-kWh cost that TOU rates directly affect — are only part of your bill. For most commercial and industrial facilities on Xcel's larger rate schedules, demand charges account for 40% or more of total electricity costs, yet they receive a fraction of the attention that energy charges do.

Demand charges are billed on your single highest 15-minute or 30-minute peak demand interval in the billing month. One spike — a momentary convergence of HVAC startup, plug loads, and EV chargers during a warm Tuesday evening in August — sets your demand charge for the entire 30-day billing period. A facility that runs at 100 kW all day and briefly touches 180 kW at 5:30 p.m. on one day gets billed on that 180 kW all month long.

Where Your Commercial Electricity Bill Goes
Typical Commercial / Industrial Customer — Xcel Colorado
Demand & Capacity Charges40%+
Set by your single highest 15-minute interval — one spike costs you for the entire month.
Energy (kWh) Charges38%
Consumption charges — directly impacted by TOU rates and load shifting.
Transmission & Distribution14%
Grid delivery and infrastructure — partially addressable through demand reduction.
Taxes, Fees & Other8%
Regulatory fees and surcharges.
The St. Elmo insight: Most energy programs target kWh. Demand management targets the 40%+ that most programs miss entirely. A combined TOU + demand management strategy attacks over 78% of your total electricity bill simultaneously — with largely the same set of actions.

The compounding insight: the 5–9 p.m. on-peak window and monthly demand spikes frequently coincide. HVAC at full capacity as employees return for evening operations, simultaneous equipment startups at shift end, EV chargers all activating at once — these events both drive up your TOU energy charge per kWh and set the demand peak that follows you for 30 days. Load management actions that suppress on-peak consumption attack both line items from a single effort.

Strategies to Shift and Shed Peak Load

Once you've quantified your on-peak exposure and identified the loads driving it, the strategy menu becomes clear. The best approaches combine immediate no-cost scheduling changes with modest investments in controls, and — for facilities with the right profile — a more transformative step into battery storage.

🌡️
Pre-Cooling: The Highest-Leverage Free Tool
Drive building temperatures to 68–70°F between 2:30–4:30 p.m. at the cheap off-peak rate, then let thermal mass carry the building through the 5–9 p.m. window with minimal HVAC runtime. Colorado's dry climate and 25–35°F daily temperature swings make this exceptionally effective — building temps typically rise only 2–4°F over four hours in a well-insulated structure.

BAS reprogramming cost: often zero. On-peak HVAC energy reduction: 40–65% routinely achieved. Simultaneously cuts TOU energy charges and suppresses the demand spike that sets your monthly demand charge.
↓ 40–65% peak HVAC runtime  ·  $0 capital cost
🤖
Demand Controllers & BAS Scheduling
A demand controller monitors real-time kW consumption and automatically curtails non-critical loads when draw approaches a programmed threshold. High-value targets include electric water heaters (thermal storage), unoccupied zone HVAC, exterior and decorative lighting, and process equipment with scheduling flexibility.

Staggered equipment startups — preventing HVAC compressors, air handlers, and other high-draw equipment from energizing simultaneously at 5 p.m. — are among the highest-ROI, lowest-cost interventions available. A 15-minute stagger across equipment groups can cut demand spikes by 20–40 kW with no operational disruption.
↓ Demand charge 10–25%  ·  Payback typically <18 months
⏱️
Load Scheduling: The No-Cost Wins
Before investing in hardware, capture the free savings: reschedule discretionary loads out of the 5–9 p.m. window entirely. EV fleet charging programmed to begin at 9:01 p.m. is one of the highest single-action changes available. Ten fleet vehicles at 7.2 kW each = 72 kW of on-peak demand erased — reducing both energy and demand charges from day one.

Other targets: commercial dishwashers, laundry cycles, irrigation systems, and ice machine harvest schedules. Smart outlet timers and programmable plugs cost under $20 each. The savings begin the first billing cycle with no contractor required.
↓ Immediate savings  ·  Near-zero implementation cost
💡
Lighting & Plug Load Management
Exterior and parking lot lighting on photocell or timer controls, occupancy-based interior lighting in low-use zones, and smart power strips that cut phantom loads at 5 p.m. can collectively reduce on-peak draw by 5–15 kW in a typical commercial facility — modest individually, but meaningful as part of a comprehensive peak-hour load reduction program.

Networked lighting controls (Lutron, Enlighted, Acuity) can be programmed with TOU-aware schedules that dim or extinguish fixtures in unoccupied spaces precisely at the 5 p.m. threshold, providing both TOU energy savings and demand charge reduction.
↓ 5–15 kW demand reduction  ·  Low implementation cost

When the Numbers Justify a Bigger Step: Battery Storage

The strategies above — pre-cooling, demand controls, load scheduling — are available to virtually every commercial facility, often with minimal investment. But for facilities where on-peak exposure is significant, where demand charges are high, or where critical operations require standby backup power anyway, there is a more powerful solution that deserves serious evaluation: battery energy storage.

⚡ Strategic Opportunity

The Peak-Cost Case for Battery Storage

The 13.4¢/kWh summer spread between on-peak and off-peak rates creates a compelling economic engine for battery storage: charge at 7.9¢ during off-peak hours, discharge at 5 p.m. to displace electricity that would otherwise cost 21.3¢. Every kWh cycled through the battery captures that full spread as savings — every single day of the summer season.

But the energy arbitrage alone understates the value. A battery programmed to cap facility demand at a target threshold will suppress the monthly peak kW that sets your demand charge. A 200 kWh commercial battery can eliminate $800–1,500 per month in demand charges for a mid-size commercial facility — often exceeding the value of the TOU energy savings themselves.

The case becomes even more compelling for facilities that already require or are considering standby backup generation for critical operations. Consider: a diesel or natural gas generator provides backup power during outages but contributes nothing to daily energy cost management. A battery storage system does both simultaneously — it dispatches daily during peak hours to reduce costs, and it stands ready as backup power when the grid goes down. For facilities with data centers, medical equipment, cold storage, or other critical loads, this dual function fundamentally changes the investment calculation. The battery is no longer just an energy management tool; it is infrastructure that pays for itself through daily operation while providing the resilience backup your operation requires.

What This Looks Like in Practice

Consider a 40,000 sq ft office building in the Denver metro on Xcel's General Service rate schedule — a representative commercial facility with moderate on-peak exposure.

Illustrative Example — Denver Metro Office Building

Before TOU Load Management

Monthly Peak Demand
220 kW
Typical weekday 5–7 p.m. HVAC + equipment
On-Peak kWh (Monthly)
~2,600 kWh
~22% of total monthly consumption
On-Peak Energy Cost
~$554
2,600 kWh × $0.213 (summer)

After Pre-Cooling + Demand Controller + EV Schedule Shift

Reduced Peak Demand
140 kW
−80 kW via pre-cooling + staggered startups
On-Peak kWh (Monthly)
~1,000 kWh
1,600 kWh shifted to off-peak hours
On-Peak Energy Cost
~$340
1,000×$0.213 + 1,600×$0.079

Monthly Energy Savings
~$214
TOU energy charges, summer months
Demand Charge Reduction
~$800
80 kW × ~$10/kW demand rate
Combined Monthly Savings
~$1,000+
Energy + demand, summer peak months
The Compounding Effect

TOU + Demand: Double the Return from the Same Actions

The same load-shifting actions that reduce your TOU energy bill also reduce your demand charge — because on-peak hours are precisely when demand peaks occur. Pre-cooling that reduces HVAC runtime from 5–9 p.m. simultaneously lowers the kW peak that sets your demand charge for the month.

A facility calculating TOU savings on energy charges alone is systematically undervaluing the strategy by roughly half. For a commercial facility spending $8,000/month on electricity, a combined approach targeting both TOU energy (38% of bill) and demand (40%+ of bill) can realistically reduce total annual electricity costs by $12,000–$18,000 — often with minimal capital investment.

The Window of Opportunity Is Open Now

Why Act Now

The Best Combination of Rate Incentives and Financial Support in a Generation

For commercial facilities in Colorado, the convergence of factors that make TOU load management attractive has never been stronger. On one side: Xcel's new rate structure creates an unusually clear and actionable price signal — a defined four-hour window where cost avoidance is direct, measurable, and immediate. On the other side: the financial support available to fund the tools that capture that savings is at a historic high.

The federal Inflation Reduction Act's Investment Tax Credit covers 30% of battery storage system costs outright — a direct reduction in capital, not a deduction. Colorado's state rebate programs, utility incentives, and PACE financing options can layer additional support on top of that. For organizations considering both load management and resilience infrastructure, the combination of daily cost savings and backup power capability makes the business case more defensible than at any prior point.

Meanwhile, Xcel's rates are not static. The utility has a pending additional rate increase request that could push summer on-peak rates higher still — widening the spread further and making today's investment economics look increasingly conservative in retrospect. The facilities that build load management capabilities now will be structurally advantaged as rates continue to evolve.

The analysis is straightforward. The tools are available. The incentives are generous. The rate signal is clear. For commercial clients across Colorado, the time to evaluate and adopt these strategies is now — not after the next rate increase, and not after the next peak-season bill arrives as an unpleasant surprise.

Your Next 30 Days: An Action Checklist


✦ ✦ ✦

Dan Frey is a Certified Energy Manager (CEM) and founder of St. Elmo LLC, a Boulder-based sustainability consulting firm. With 40 years of experience and hundreds of ENERGY STAR certifications, St. Elmo specializes in demand management, TOU rate optimization, load profiling, and turning utility complexity into measurable, verified savings. For a complimentary review of your facility's load profile and TOU exposure, reach out at stelmollc.com.

Rate data sourced from Colorado PUC, CPR News, 9News, and Xcel Energy published rate schedules. Rates reflect approved 2025–2026 tariffs. Example calculations are illustrative; actual savings will vary by facility. Always verify current rates and demand charge structures with Xcel Energy directly.