Heads up for anyone with Colorado clients - Xcel Energy rolled out new power factor penalty calculations effective January 2024. They're now penalizing for PF below 0.92 instead of 0.90, and the penalty rate jumped from 3% to 5% of demand charges. We've got three clients already seeing $1,000+ monthly increases. The new tariff Schedule SG-1 is brutal compared to the old structure. Anyone else dealing with these changes?
Xcel Energy Colorado - new PF penalty structure 2023
Scott, that's a significant change. Are they grandfathering existing correction equipment or do clients need to upgrade their capacitor banks? MLGW here hasn't changed their 0.90 threshold in years but I keep hearing rumors. The jump to 0.92 is going to catch a lot of borderline accounts.
We saw similar changes with Georgia Power in 2022. They moved the threshold from 0.85 to 0.90 and gave customers 18 months to comply. The key is getting ahead of it - capacitor prices have gone up 40% since the supply chain issues. Better to order equipment now before everyone else catches on to the new requirements.
Idaho Power is looking at similar changes for 2025. They sent out a notice about "modernizing power quality standards" which usually means higher penalties. Scott, are they offering any incentives for correction equipment or is this just a revenue grab? Avista here gives 2-year payback rebates for PF correction gear.
No incentives from Xcel unfortunately. Pure revenue enhancement. The worst part is they're applying the new penalties retroactively to November 2023 bills. We're filing formal complaints for three clients - that retroactive application seems legally questionable. Has anyone successfully challenged retroactive rate changes like this?
Scott, we challenged Entergy Louisiana on a retroactive penalty change in 2019 and won. The key was proving they didn't provide adequate notice per PSC regulations. Louisiana requires 60 days minimum notice for penalty structure changes. Check Colorado's utility commission rules - there might be similar requirements that Xcel violated.
Juan's approach worked for us too with Georgia Power. The PUC ruled that penalty increases require the same notice period as rate increases - 90 days in Georgia. We got $34,000 in retroactive penalties refunded for two clients. Definitely worth filing with the Colorado PUC if they didn't follow proper notification procedures.
Thanks for the advice everyone. Filed complaints with Colorado PUC on January 15th citing inadequate notice. Xcel provided only 35 days notice which falls short of the required 60 days for penalty structure changes. We'll see how it goes. In the meantime, ordering capacitor banks for all affected clients - better safe than sorry.
Good strategy Scott. Document everything with photos and electrical measurements before and after equipment installation. The PUC will want to see proof that clients made good faith efforts to comply once they were properly notified. Also keep all correspondence with Xcel - their responses to your complaints could help your case.
Update from Idaho - Idaho Power delayed their PF penalty changes until 2026 after pushback from large industrial customers. Sometimes the threat of PUC complaints is enough to get utilities to slow down these revenue grabs. Scott, any word on your Colorado complaints?
Warren, still pending with the PUC but Xcel agreed to suspend retroactive penalties pending resolution. Small victory but saves our clients about $8,000 per month while we fight this. The PUC hearing is scheduled for March 15th - I'll update the forum with results.
Following this thread closely from Omaha. OPPD is making noises about PF penalty increases too. Scott, would you mind sharing your PUC filing template? Sounds like we're all going to need it soon. These utilities are getting too aggressive with penalty revenue - time to push back collectively.