Each and every day, people across the United States use electricity in millions of ways, usually without even having to think about it. From flipping on light switches to powering televisions and smart phones, electricity is so readily available.
Electric companies have been committed to delivering clean, reliable energy to their customers in Colorado. Recently, part of that commitment included making upgrades to infrastructure. These modernization projects were needed to meet current and future regulatory requirements—and to ensure that customers will have affordable, reliable service now and in the future.
One local utility, Black Hills Energy, has filed to update electric rates to more accurately allocate costs to those who use energy. This request is not a rate increase. It is a revenue-neutral effort to more fairly attribute costs to electricity users. The overall objective is to adopt a fair and balanced approach that allows residential customers and small businesses to benefit from clean energy, while paying for electricity used and for maintenance of the electric grid.
A study revealed that while some customers are receiving greater benefits than the rates they pay to support service, other customer groups are in the reverse situation—they are paying for more than they are receiving. This means they are effectively subsidizing the high-use group.
Private solar adoption has increased the complexity of this situation. Some private solar panel owners connect to the grid for backup power and to send excess generation back to the grid. Other private solar owners disconnect from the grid completely. Those who don’t use the grid at all shouldn’t be required to pay to support it, but those who do use the grid should share in its maintenance and upkeep.
All of these factors need to be considered when rates are determined for different classifications of customers, including both residential and business users. Coloradans should equitably share in the costs associated with generation, delivery, and use of electricity.