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Energy bills can be complicated and mysterious. While the cost of apples (for example) is the number of apples times the price per apple, utilities slice and dice their energy "apples" (or units) in a variety of ways. And many utilities don't make it clear how much their whole apples cost you (they instead tell you the price for every little slice).


The purpose of this article is to help you understand your Xcel Energy (Northern States Power Company) (XCEL MN) energy bill. So you can take control and cut it. The next article in the series will show you quick and easy ways to cut it.

To see your current energy rates, click here to scroll down.

Quick note
This article is focused on your electric bill. When we say energy, we mean electricity. The article doesn't consider natural-gas heating.

A "Tiered rate plan" is a rate plan where the amount you pay per kWh for electricity increases as the quantity of electricity consumed increases. Generally there is a baseline allowance of a certain number of kWhs (kilowatt hours) per month that are charged at a cheaper rate, and then usage above this allowance is charged at a higher rate.

A "Time-of-Use" rate plan is an electricity plan where the amount charged per kilowatt hour (kWh) is determined by the time of the day and the season of the year in which it is used.

Time-of-Use plans will typically have "peak" periods with higher rates and "off peak" periods with lower rates.

The idea behind time of use billing is to get customers to use less power at peak periods (when most people use a lot of power). Peak periods put a lot of strain on the grid. This is why time of use billing is being implemented by all major utilities. It is an attempt to encourage consumers to help spread out the load, and thus reduce investment needed to support brief periods of extremely high usage.

If customers can adjust their habits to use appliances at non-peak times they have the potential to significantly lower their electricity bills. Although, as power at peak times is much more expensive, if you continue to use lots of power at peak times your bill could be higher.

How does our rate plan work?

Your energy bill has two parts:

  1. A service charge
  2. An energy charge
The service charge

The service charge is the same for all households — whether they run a single desk fan or a hundred air conditioners. It covers XCEL MN expenses that aren't directly related to your energy usage. Examples are XCEL MN's phone-support staff, and the hold music you hear while waiting for phone support. The service charge doesn't change month by month. It's only about 7% of a typical family's total monthly energy bill ($8.82 out of $132/mo).

The energy charge

Unlike the service charge, the energy charge is based on actual usage. What's the energy unit that XCEL MN uses? Like other U.S. utilities, they charge per kilowatt-hour, abbreviated as kWh. Let's use the classic light bulb example to understand kilowatt-hours:

100 light bulbs x 10 watts per light bulb = 1,000 watts. A "kilo" is a thousand, so 1,000 watts = 1 kilowatt.

…If the light bulbs are left on for 1 hour, that's 1 kilowatt x 1 hour = 1 kilowatt-hour (when in doubt, just squish words together).

1 kilowatt x 1 hour = 1 kilowatt-hour (kWh)

Let's make sure you have that. How many kilowatt-hours are used if you leave one hundred 10-watt light bulbs on for an hour? …1 kilowatt-hour. Here are the steps: 100 light bulbs x 10 watts each = 1,000 watts. Divided by 1,000 = 1 kilowatt (there are 1,000 watts in a kilowatt). Left on for 1 hour = 1 kilowatt-hour.

Standard energy unit
Unit name: kilowatt-hour
Abbreviated as: kWh

Now let's talk money. How much does XCEL MN charge to keep this single kilowatt-hour (kWh) of light bulbs on for an hour? Under the standard rate plan (code name: A01,A03), they charge 14¢ per kWh. One kWh multiplied by 14¢ per kWh equals…14¢. If the 100 light bulbs were kept on 24x7 for a month (720 hours straight), XCEL MN would charge $101.

100 lightbulbs x 24/7 x 14 cents = $100.80
What's a typical XCEL MN customer's energy bill?

A typical family in XCEL MN territory uses 936 per month on average (for perspective, they'd get to the same total by keeping 22 typical laptops on 24x7). They pay $132 per month for those 936 kilowatt-hours. How does your home compare?

How do XCEL MN rates compare to the national average?

XCEL MN rates are a little higher than the national average — the average XCEL MN rate for a family with typical energy usage is 14¢ (including the service charge). The average national residential rate is 13¢.

Does XCEL MN charge a premium in the summer?

Yup, summer rates are 12% higher than winter rates. Between this and higher summer usage, the average summer bill is 21% higher than the average winter bill ($149 vs $123 per month). XCEL MN's summer-rate season goes from June 1 to September 30.

Would we have a lower bill on a different XCEL MN rate plan?

XCEL MN offers a "time of use" rate plan that you could voluntarily switch to. Under the time-of-use rate plan, you'd pay a different rate depending on when you use energy over the course of a day. Time of use gives you more control over your energy bill. Depending on how you use energy, it could start saving you money immediately.

Newer type of rate plan
Typically referred to as: Time of Use
Abbreviated as: TOU

The next article in this series will go into the time-of-use rate plan in more detail, and will show you how to leverage time of use to cut your bill.

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Find out how much you could save with time-of-use. Get personalized results with the Cut My Bill calculator. It's free and easy.

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What are our current XCEL MN energy rates?

If you're on XCEL MN's default residential rate plan (code name: A01,A03), here are the rates you currently pay:

Default plan's rates
Plan Name: Residential (A01,A03)
Last Update: April 1, 2018
Fixed Charge: Service Charge: $8.82
Summer (June 1 to September 30)
All Year Rate: $0.142
Winter (October 1 to May 31)
All Year Rate: $0.127

Are the rates shown here accurate?
Determining the actual rates charged by a utility can be daunting, so websites typically just publish general estimates. Cut My Bill is different — we're showing you your real up-to-date XCEL MN rates. Here are the nitty gritty charges we've accounted for: energy charge, net metering purchase, mercury cost recovery, conservation improvement program adjustment, environmental improvement charge, renewable development fund, state energy policy rate, transmission cost recovery charge, decoupling adjustment, fuel cost charge, affordability surcharge, customer charge, interim rate surcharge, renewable energy standard adjustment.
Rates can be verified here.

We're already on time of use — what are our current rates?

If you're already on XCEL MN's optional time-of-use rate plan (code name: A02, A04), here are the rates you currently pay:

Time-of-use plan's rates
Plan Name: Residential - Time of Day (A02, A04)
Last Update: April 1, 2018
Fixed Charge: Service Charge: $10.83
Summer (June 1 to September 30)
Rate per kWh
Off-Peak: $0.079
Peak: $0.248
Weekday Times
Off-Peak: Midnight to 9am, 9pm to midnight
Peak: 9am to 9pm
Weekend Times
Off-Peak: All hours
Peak:
Winter (October 1 to May 31)
Rate per kWh
Off-Peak: $0.079
Peak: $0.206
Weekday Times
Off-Peak: Midnight to 9am, 9pm to midnight
Peak: 9am to 9pm
Weekend Times
Off-Peak: All hours
Peak:

How do I work out if I am on the cheapest XCEL MN rate plan for my usage pattern?

To do an exact comparison on how much you would save from switching plans requires collecting your detailed usage data for the last 12 months. This is known as Interval Data and sometimes also called Green Button Data.

 

Interval Data
Green Button data

 

Interval or Green Button data is your electrical usage data for the last 12 months in one hour (or even shorter) intervals. This data is available from your utility provider.

What are the best ways to cut our bill?

We're glad you asked. Let's continue to the article: Three Best Ways to Cut Your Xcel Energy (Northern States Power Company) Bill.

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Ready to stop reading and start cutting (your electric bill)? See how much you can save by switching to a time-of-use rate plan. The Cut My Bill calculator is free and easy.

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