Conventional wisdom would believe that Investor Owned Utilities (IOUs) such as Xcel Energy would have lower electric rates than Rural Electric Associations (REAs) and Municipally Owned Utilities (MOUs) because IOUs have the advantage of population density that allows for maximization of capital investment.
But that is not the case as the Colorado Association of Municipal Utilities (CAMU) reports. According to CAMU’s most recent utility bill comparison survey from January 2012:
Average residential bill/cost of 700 KWh
MOU: $83.63
REA: $92.98
IOU: $96.92
Average small commercial bill/cost of 2,000 KWh + 10KW
MOU: $224
REA: $241
IOU: $262
Average large commercial bill/cost of 45,000 KWh + 130KW
MOU: $4,613
REA: $4,769
IOU: $4,926
Average industrial bill/cost of 1,900,000 KWh + 3,000KW
MOU: $148,000
REA: $140,000
IOU: $155,000
These figures beg a couple of questions to which I don’t have definitive answers but do have very strong suspicions:
- Would the IOUs’ bills have compared more favorably before the 30 percent renewable mandate and before the Public Utilities Commission moved away from a least cost principle?
- Is Colorado’s largest IOU Xcel Energy worried that REAs and MOUs provide electricity at lower costs? If not, it should be. As electric rates continue to rise, businesses looking to reduce their costs may move out of Xcel service areas and into an area served by an REA or MOU. It already produces surplus electricity as it is.