3

CO

Xcel

Electric

CFE; DF

The mechanism is intended to incentivize Xcel to pursue all possible cost-effective electric demand-side management ("DSM") through customer programs.

Gigawatt-hours ("GWh") of annual energy efficiency savings

Minimum: 400 GWh of savings Maximum: 550 GWh of savings

Upside

Shared net benefits/shared savings

The performance incentive is equal to 40% of incremental net economic benefits from savings between 280 and 550 GWh. The company is eligible to begin earning the incentive once it reaches the minimum target of 400 GWh savings, with a cap at the maximum target of 550 GWh savings. The PIM also includes a disincentive offset worth up to $3M each year. The company is eligible to receive the first $1.5M of this disincentive offset upon reaching 400 GWh savings, and another $1.5M upon reaching 500 GWh savings. Total incentives for all components are capped at $18M.

2019

2023

Inactive (Performance Period Concluded)

In September 2018, the Commission clarified that the utility incentive of 40% of net economic benefits accrues from 280 GWh of savings once the utility attains 400 GWh savings, rather than only beginning from 400 GWh (Decision No. C18-0743, Proceeding No. 17A-0462EG). HB 07-1037, a Bill Concerning Measures to Promote Energy Efficiency, was enacted in 2007 and provides a clear basis for climate-forward efficiency policy intent. The legislation directs the Commission to establish energy savings and peak demand reduction goals, and to consider incentive mechanisms to allow the utility an opportunity to earn a fair return. In the legislation, the General Assembly declares that providing funding mechanisms to encourage Colorado public utilities to reduce emissions or air pollutants and to increase energy efficiency are matters of statewide concern and serve the public interest (Section 40-3.2-101).

The first DSM Performance Incentive began in 2008, which allowed the utility to earn incremental shared net benefits upon reaching 80% of its annual energy savings goals, for a performance period between 2009-2020 (Decision No. C08-0560, Proceeding No. 07A-420E). This original PIM allowed the utility to earn up to 10 percent of incremental net benefits for up to 130 percent of goal attainment, and to further earn 12 percent of net economic benefits up to 150 percent of goal attainment. In June 2018, the Commission adopted a modified DSM Performance Incentive, which is the PIM described in this entry.