Xcel Energy's new pilot winter electricity rate designed for heat pumps in Colorado

Winter is coming, and so looms the threat of utility bills filled with spooky numbers (could this be a Halloween costume idea?). But fear not, Colorado— Xcel Energy is piloting a new winter electricity rate made just for heat pump users.

Under the pilot, electricity rates shift from October to May, with the goal of boosting affordability, predictability, and simplicity around electric space heating. Savings aren’t guaranteed, and they depend on your household’s energy use and when you use electricity. For many households, the lower off-peak rate could outweigh the higher monthly fixed charge.

To enroll in the Electric Space Heating Pilot Rate, we encourage you to check your e-mails for an invitation from Xcel Energy. If you received an invite, review the terms and conditions, then sign up using the link provided.

Eligibility

This limited-time program is first come, first serve, and invitation-only. 

If you…

• Live in Colorado;
• Use a heat pump as your primary heating source;
• And became approved for a heat pump rebate between Jan 1, 2022 and May 31, 2026;

Then you might have received an e-mail from Xcel Energy, inviting you to participate! Only a limited number of eligible households were invited, due to program capacity. If you did not receive an invitation, then you can’t enroll quite yet.

First: What is a kWh?

You'll see kWh (kilowatt-hour) throughout this article. It sounds technical, but it's simply how Xcel measures the amount of electricity your home uses.

Think of it like gasoline:

• Gallons = how much gas you use
• Price per gallon = what you pay for gas
• kWh = how much electricity you use
• Price per kWh = what you pay for electricity

If your home uses 1,000 kWh in a month, Xcel charges you based on the price per kWh.

Your heat pump is one of the things using electricity in your home, along with your refrigerator, lights, dishwasher, water heater and everything else that runs on electricity.

So, what is Xcel changing?

Under the pilot, rates shift from October to May. The fixed monthly cost becomes $12.90 higher than current rates. But, the pilot also enacts a variable energy rate that is $.027 cheaper per kWh while off-peak (hours outside of 5-9pm). If we assume that you use an equal amount of energy throughout the day, roughly 87% of your kWh will come at this discounted rate.

We crunched the numbers, and this means that your home would break even at around 549 kWh of electricity use per month. If your household uses more than that, you could see savings under the pilot. Most of our Colorado customers fall into that category! You can check your past bills in the winter months to get an idea of how much kWh you’ve been using.

During the summer (June to September), rates return to their original levels. Here’s what the savings could look like:

Savings estimates assume 87% of electricity use occurs during off-peak hours (outside of 5–9 p.m.). Your actual savings will vary depending on when you use electricity.

Program details

The pilot begins on October 1, 2026, and ends on May 31, 2027, but customers may opt out at any time.

Throughout the pilot, participants will be invited to provide feedback, helping shape the future of electricity rates for all Colorado customers.

More details about the Electric Space Heating Pilot can be viewed on Xcel Energy’s website, and where you can also view the full terms and conditions.