Colorado Electricity Rates: Your Guide

Colorado electricity rates are climbing fast, and there's no sign of a slowdown. The average residential rate sits at roughly 15 cents per kilowatt-hour in early 2026 — close to the national average — but that number has jumped 62% across all sectors since 2014. Four rate increases have stacked up since 2020, and Xcel Energy just filed for another $546 million in combined electric and gas hikes. The average monthly bill for an Xcel customer runs about $100 for 601 kWh of usage, and if the latest rate case goes through, it will climb to around $110.

Here's the thing that makes Colorado different from states like Texas: you cannot choose your electricity provider. Colorado is a regulated market. Your utility is determined by your address, and the rates are set through a public process overseen by the Colorado Public Utilities Commission. That means you cannot shop around for a cheaper plan — but you can take control of when you use electricity, tap into some of the most generous utility rebates in the country, and take advantage of Colorado's booming community solar market.

This guide breaks down what you're actually paying, why rates keep rising, and exactly what you can do about it.

How Colorado's Electricity Market Works

Unlike deregulated states where consumers pick from dozens of competing providers, Colorado operates a regulated electricity market. Your utility company is your only option, and the Colorado Public Utilities Commission (PUC) oversees rate changes to ensure they're "just, reasonable, and not discriminatory."

The PUC has full regulatory authority over investor-owned utilities like Xcel Energy and Black Hills Energy. When these companies want to raise rates, they must file a formal rate case with the PUC, which involves public review, comments, and a commission vote. That process is your main avenue for having a voice in what you pay.

However, the PUC does not regulate everyone. Colorado has 28 municipal utilities (like Colorado Springs Utilities) that are self-governed, plus 22 rural electric cooperatives (like CORE Electric and United Power) that are member-owned with elected boards. Together, these munis and co-ops serve a significant share of the state's electricity customers.

One development worth watching: Colorado and Nevada are required to join an organized wholesale market (called an RTO) by 2030. A PUC study found that Colorado utilities could cut costs by 5% through this change — a potential bright spot for ratepayers down the road.

What Coloradans Actually Pay

Let's look at real numbers. In early 2026, the average residential electricity rate in Colorado is approximately 15 cents per kWh. That's roughly in line with the national average, though the gap has been narrowing as Colorado rates rise faster than the rest of the country. Colorado households saw electricity costs increase 6.6% in 2025 alone — about $80 more per year for the average home.

Monthly bills vary widely depending on your utility and usage:

Utility	Type	Average Rate	Typical Monthly Bill
Xcel Energy	Investor-owned	~15 cents/kWh	~$100 (601 kWh)
Black Hills Energy	Investor-owned	12-16 cents/kWh (tiered)	~$125
Colorado Springs Utilities	Municipal	~14 cents/kWh	Varies
CORE Electric Cooperative	Co-op	~11.6 cents/kWh energy charge	Varies ($20 monthly service charge)

Black Hills Energy uses a tiered structure: 12 cents per kWh for your first 500 kWh, then 16 cents per kWh above that. This means heavy users pay disproportionately more. CORE Electric charges a $20 monthly basic service charge on top of its energy rate, plus a $5.47 on-peak demand charge.

Understanding what's on your bill matters. With Xcel, less than half of your bill goes to the actual electricity you consume. The rest covers a $6.29 monthly service and facility charge, a $0.75 energy assistance charge, renewable energy standard costs, energy efficiency program charges, coal plant retirement recovery, and various other PUC-approved adjustments. For a deeper look at decoding all those line items, check out our guide on how to read your electric bill and spot overcharges.

Why Colorado Rates Keep Rising

Rates have risen 62% across all sectors since around 2014, and the pressure is not letting up. Several forces are driving costs higher simultaneously.

Xcel's $356 Million Rate Case

In November 2025, Xcel Energy filed for a $356 million increase in annual revenue — a 9.9% rate hike. For the average residential customer, that means about $9.94 more per month. Here's how the request breaks down:

Component	Amount
Distribution system investment	+$294 million
Liability insurance (wildfire)	+$65 million
Operating costs	+$51 million
Cost of capital changes	+$49 million
Coal retirement savings	-$120 million
Net request	+$356 million

A decision is expected in Q3 2026, with new rates potentially effective August 2026. And that's not all — Xcel filed a second rate case in January 2026 for an additional $190 million in gas rate increases. Combined, the two filings total $546 million in back-to-back hikes.

The Infrastructure Overhaul

Xcel is in the middle of a 5-year, $5 billion plan to modernize its distribution network. That includes replacing 18,000 wooden poles, swapping out 18,000 transformers, building 5 new substations, adding 406 new circuit transmission miles, and connecting 775 MW of new generation. This investment shows up directly on your bill.

Wildfire Mitigation

Colorado's wildfire risk is intensifying, and Xcel's response is expensive. The PUC approved a $1.9 billion wildfire mitigation plan covering 2025 through 2027. The plan includes undergrounding 50 miles of power lines in high-risk areas, major transmission line rebuilds, AI-powered cameras for ignition detection, and enhanced protective settings during high-risk conditions. Wildfire liability insurance alone accounts for $65 million of Xcel's latest rate increase request.

The Clean Energy Transition

Colorado has committed to 100% renewable energy by 2040, with Governor Polis pushing to accelerate that to 2035. Xcel is required to cut carbon emissions 80% by 2030 from 2005 levels. The approved clean energy portfolio adds roughly 6,100 MW of new generation — the largest in state history — backed by $12 to $13 billion in investment. That investment is a major driver of rate increases, though coal plant retirements are providing some savings ($120 million credited in the latest rate case). In 2024, coal was dethroned as Colorado's single-largest electricity source for the first time in over 40 years.

Xcel's New Time-of-Use Rates

One of the biggest changes for Colorado electricity customers took effect November 1, 2025: Xcel's new time-of-use (TOU) rate structure. The PUC approved the plan in February 2025, simplifying rates into two periods.

On-Peak: 5 PM to 9 PM on non-holiday weekdays, year-round

Off-Peak: All other hours

The price difference is dramatic:

Period	Summer (Jun-Sep)	Winter (Oct-May)
On-Peak (5-9 PM weekdays)	~21.3 cents/kWh	Higher than off-peak
Off-Peak (all other hours)	Lower	~6.8 cents/kWh

On-peak rates are 2.7 times higher than off-peak rates. That means running your dishwasher at 7 PM on a Tuesday costs nearly three times as much as running it at 10 PM.

You do not have to accept TOU rates. Xcel offers a flat-rate option at roughly 9 to 10 cents per kWh (varying by season) if you prefer predictable pricing. The PUC's analysis suggests most customers will see no change or slight savings on TOU rates even without shifting their usage patterns — but customers who actively move consumption to off-peak hours can save significantly more.

If you're curious about how to make time-of-use pricing work in your favor, our detailed guide on time-of-use electricity rates covers the strategies that matter most. A smart thermostat is one of the easiest ways to automate your savings — pre-cool your home before the 5 PM peak, then let it coast through the expensive window.

Community Solar: Go Solar Without a Rooftop

Colorado is a national pioneer in community solar, and it's one of the best options available to renters, condo owners, or anyone whose roof is not suited for panels. The state has over 250 active community solar projects with more than 400 MW of total capacity.

Xcel Energy's Solar*Rewards Community program is the largest community solar program in the country. Here's how it works: third-party developers build and maintain solar gardens, Xcel manages subscriber billing and energy credits, and you — the subscriber — receive credits on your electric bill for the power your share of the garden produces. You can offset up to 120% of your annual electricity usage through a community solar subscription.

Community solar is available in Xcel and Black Hills service territories, plus through several co-ops and municipal utilities including Holy Cross Energy, United Power, and Poudre Valley REA.

The beauty of this option is that you do not need to own your home, install anything on your roof, or make any upfront investment. Most community solar subscriptions involve a monthly fee that's less than the bill credits you receive, resulting in net savings from day one. For a full breakdown of how community solar works and what to look for in a subscription, read our guide on community solar.

Rooftop Solar in Colorado

If you do own your home and have a suitable roof, Colorado is one of the better states for rooftop solar. The combination of generous sunlight (about 300 sunny days per year along the Front Range), strong incentives, and favorable net metering makes the economics work well.

Net metering at retail rate: Colorado requires utilities to credit your excess solar production at the full retail rate. That means every kilowatt-hour your panels send back to the grid offsets a kilowatt-hour you'd otherwise buy at 15 cents or more.

Federal Investment Tax Credit: The 30% federal ITC remains available through at least 2032, covering panels, inverters, batteries, and installation labor.

State sales tax exemption: Solar equipment is exempt from Colorado state sales tax, saving you roughly 3-4% on system cost.

Property tax exemption: Solar installations do not increase your property tax assessment. Your home value goes up, but your taxes do not.

Xcel Solar*Rewards: Xcel offers additional rebates for residential solar installations on top of the federal and state incentives.

For income-qualified households, GRID Alternatives Colorado installs rooftop solar at no cost for families earning at or below 80% of the Area Median Income. They've installed over 5.5 MW to date, saving hundreds of families more than $9.8 million collectively.

If you're considering solar, our buyer's guide to choosing the best solar panels walks through the decisions that matter — panel types, inverter choices, installer vetting, and financing options.

Co-op Breakaway: CORE and United Power

One of the most significant developments in Colorado's electricity landscape is the breakup between the state's two largest electric cooperatives and their wholesale suppliers.

CORE Electric Cooperative (formerly Intermountain Rural Electric Association) serves roughly 170,000 members across 5,000 square miles in central Colorado — Castle Rock, Parker, Centennial, Bennett, Conifer, and Woodland Park. United Power, the state's second-largest co-op, serves about 100,000 members in the northern Denver metro area. Both are breaking away from Xcel and Tri-State Generation to pursue more local control and potentially lower costs.

This matters for co-op members because it could eventually mean more competitive rates and more flexibility in energy sourcing. CORE's 2026 rates include a 6.7% average increase effective January 2026, with a residential energy charge of $0.1155 per kWh. How rates evolve as these co-ops gain independence is worth watching closely.

How to Save on Your Colorado Electricity Bill

You cannot switch providers, but you have more levers than you might think. Colorado offers some of the most generous utility rebates in the country right now — and several have deadlines approaching.

Xcel's Rebate Programs (The Most Generous in State History)

Xcel's current rebate lineup is unprecedented. The PUC mandated that all gas equipment incentives end by January 2027, so the window for these programs is limited.

Rebate	Amount	Notes
Heat pump (heating)	$900-$2,250 per ton	Up from $300-$750 in 2024
Heat pump water heater	$2,250	Up from $800 in 2024
Smart thermostat	$100 credit + $25/year	Enrollment in demand response
Energy audit	60% subsidized (up to $200)	Includes blower door test and thermal imaging
Whole Home Efficiency bonus	25% bonus on all projects	Complete 3+ qualifying improvements within 2 years
EV home charger installation	Up to $500 ($1,300 income-qualified)	Level 2 charger
Electrical panel upgrade	Up to $1,500	For EV charging or electrification

Total potential: over $10,000 in incentives for comprehensive home efficiency improvements. The Whole Home Efficiency Program rewards you with a 25% bonus rebate on all projects when you complete three or more qualifying improvements within two years. That means the more you do, the more you save per project.

For heat pump guidance, our guide to the best heat pumps for home covers what works best in Colorado's climate. And if you're thinking about a full electrification project, our whole-home electrification guide lays out the step-by-step approach.

Optimize Your TOU Schedule

With on-peak rates 2.7 times higher than off-peak, shifting your usage patterns is one of the simplest ways to cut costs:

Run the dishwasher, laundry, and dryer before 5 PM or after 9 PM on weekdays
Charge your EV overnight (Xcel's Optimize Your Charge program gives you an extra $50 bill credit for charging during grid-friendly times at least 25% of the time)
Pre-cool or pre-heat your home before the 5 PM peak, then let your thermostat coast through the expensive window
Use a dedicated EV meter for a 50% discount on off-peak energy for charging

If you cannot realistically shift your usage, opt for the flat rate at roughly 9-10 cents per kWh. There's no penalty for choosing it.

Monitor Your Usage

A home energy monitor can reveal exactly where your electricity is going. Many Colorado homeowners are surprised to discover that a single appliance — an old freezer in the garage, a hot tub, or an inefficient HVAC system — accounts for a disproportionate share of their bill.

Get an Energy Audit

Xcel subsidizes 60% of energy audit costs, up to $200. The audit includes a blower door test and thermal imaging to find air leaks, insulation gaps, and inefficiencies. It's one of the highest-value first steps you can take, because it tells you exactly which improvements will save the most money. For more strategies, our guide on how to cut your electric bill in half covers the full playbook.

Colorado's Energy Mix Is Changing Fast

Colorado's electricity generation is undergoing a historic transformation. In 2024, coal was dethroned as the state's single-largest electricity source for the first time in more than 40 years. Here's what the current mix looks like:

Source	Share of Generation (2024)
Natural gas	30.4%
Wind	30.0%
Coal	28.1%
Solar	8.4%
Hydroelectric	2.9%
Biomass	0.1%

Renewables now account for 43% of in-state net generation, with wind providing two-thirds of that total. In 2025, roughly 1,267 MW of coal capacity is scheduled for retirement, while 400 MW of new solar, 138 MW of new gas, and 20 MW of new battery storage are coming online.

The state's clean energy goals are aggressive: 100% renewable energy by 2040, with Governor Polis pushing to accelerate that to 2035 for all utilities. Xcel is required to achieve an 80% carbon reduction by 2030 from 2005 levels. Clean Energy Plans adopted by utilities covering 99% of fossil fuel-based power aim for 84-87% GHG reductions by 2030.

What does this mean for your bill? In the near term, the transition is adding costs — the $12 to $13 billion investment in new generation capacity shows up in rate increases. But long-term, renewable energy has no fuel costs. Once the infrastructure is paid off, proponents argue that rates should stabilize. The counterargument, raised by groups like the Common Sense Institute, is that mandates and the pace of transition will keep costs elevated. The reality is likely somewhere in between.

Low-Income Energy Assistance

If you're struggling to pay your electricity bills, Colorado has several programs designed to help.

LEAP (Low-income Energy Assistance Program): Available November 1 through April 30 each year. If your household income is at or below 60% of the state median income, you may qualify for a one-time payment of $200 to $1,000. LEAP can also cover repair or replacement of your primary heating system. Apply online at the Colorado PEAK website or call 1-866-HEAT-HELP (1-866-432-8435).

CARE (Colorado's Affordable Residential Energy Program): Provides free energy conservation services — weatherization, insulation, air sealing — to eligible households. Available for both owners and renters using Colorado Natural Gas or Xcel Energy.

Utility Bill Help Program: Run through the PUC, this program caps your combined natural gas and electric bills at a maximum of 6% of your annual income. Available through Atmos Energy, Black Hills Energy, Colorado Natural Gas, and Xcel Energy.

Weatherization Assistance: Federal and state-funded programs available through county agencies provide insulation, air sealing, furnace repair or replacement, and window upgrades at no cost to qualifying households.

Colorado Solar For All (COS4A): This $8.5 million annual program provides solar incentives specifically for underserved communities, with the first phase launching in 2025.

Frequently Asked Questions

Can I choose my electricity provider in Colorado?

No. Colorado is a regulated market. Your utility is determined by where you live. The two investor-owned utilities — Xcel Energy (metro Denver and surrounding areas) and Black Hills Energy (southern Colorado) — are regulated by the PUC. Municipal utilities like Colorado Springs Utilities and the 22 rural electric cooperatives are self-governed by their own boards. You cannot switch to a different provider.

How much does the average Coloradan pay for electricity?

The average residential rate is about 15 cents per kWh as of early 2026. Monthly bills range from roughly $100 to $156 depending on your utility and usage level. Xcel's average residential customer uses about 601 kWh per month and pays around $100, while the statewide average including all utilities is closer to $156 per month.

Why has my Xcel bill gone up so much?

Xcel has implemented four rate increases since 2020, and a fifth is pending. The drivers include a $5 billion distribution system overhaul, $1.9 billion in wildfire mitigation, $65 million in wildfire liability insurance, coal plant retirement costs, and the clean energy transition. Since 2019, the average monthly residential bill for 600 kWh has risen 38%. Xcel also posted nearly $1 billion in operating profit from Colorado operations in 2025, which has drawn frustration from customers and advocates.

What are time-of-use rates, and should I opt in?

Xcel's TOU rates, effective November 2025, charge more during peak hours (5 to 9 PM on non-holiday weekdays) and less during all other hours. On-peak rates are 2.7 times higher than off-peak. If you can shift heavy electricity use — laundry, dishwashing, EV charging — outside that 5 to 9 PM window, you'll save money. If you cannot shift your usage, you can opt for a flat rate at roughly 9 to 10 cents per kWh instead. The PUC found that most customers will see no change or slight savings even without actively shifting usage.

How does community solar work in Colorado?

Colorado was one of the first states to establish community solar. You subscribe to a share of a solar garden built and maintained by a third-party developer. The energy your share produces generates credits on your electric bill. You can offset up to 120% of your annual usage. There are over 250 active projects with 400+ MW of capacity statewide. You do not need to own your home or install anything — renters are eligible. Most subscriptions result in net savings from day one.

What solar incentives are available in Colorado?

The federal 30% Investment Tax Credit covers panels, inverters, batteries, and installation through at least 2032. Colorado exempts solar equipment from state sales tax and property tax increases. Xcel's Solar*Rewards program offers additional utility rebates. Income-qualified households can get free installations through GRID Alternatives Colorado or the Colorado Solar For All program. Combined, these incentives can cover 30-50% of a rooftop solar system's total cost.

Will electricity rates keep going up?

In the near term, yes. Xcel has filed for $546 million in combined electric and gas rate increases, Black Hills raised rates 6.7% in March 2025, Colorado Springs Utilities is implementing a 6.5% base rate increase, and CORE Electric raised rates 6.7% in January 2026. Medium-term, infrastructure investment in wildfire mitigation, grid modernization, and renewable energy buildout will continue to put upward pressure on rates. Long-term, proponents argue that renewable energy — which has no fuel cost — will stabilize rates once infrastructure is paid for. But near-term increases are essentially certain.

How can I get help paying my electric bill?

Apply for LEAP between November 1 and April 30 if your household income is at or below 60% of the state median income — benefits range from $200 to $1,000. The PUC's Utility Bill Help Program caps your energy bills at 6% of your annual income. The CARE program provides free weatherization services. And the $0.75 monthly energy assistance charge on your Xcel bill funds additional assistance programs (you can opt out of this charge if you choose).

Your Colorado Electricity Action Plan

Here's a concrete plan to take control of your electricity costs, starting today.

This week:

Pull up your Xcel, Black Hills, or co-op account online. Find your average monthly kWh usage for the past 12 months and identify which rate plan you're on.
If you're an Xcel customer, check whether you're on TOU or flat rates. If you can shift usage away from 5 to 9 PM on weekdays, TOU rates will save you money. If not, confirm you're on the flat rate.
Look at your bill breakdown and identify the largest charges beyond the energy rate itself. Understanding where your money goes is the first step to controlling it.

This month:

Schedule an energy audit through Xcel (they subsidize 60% of the cost, up to $200). The audit will identify your highest-impact efficiency improvements.
Explore community solar subscriptions in your area. If you rent or your roof is not ideal for solar, this is your best path to solar savings with zero upfront cost.
Check your eligibility for LEAP, CARE, or the Utility Bill Help Program if your income qualifies.

This quarter:

Review Xcel's current rebate programs and prioritize improvements with the highest rebates and energy savings — heat pump water heaters ($2,250 rebate), heat pumps ($900-$2,250 per ton), and smart thermostats ($100 credit plus $25 annually) are the standouts.
If you're planning two or more upgrades, aim for three qualifying improvements within two years to unlock the 25% Whole Home Efficiency bonus.
If you own an EV, enroll in Xcel's Optimize Your Charge program for a $50 bill credit and consider a dedicated EV meter for 50% off-peak energy savings.

Important deadline: The PUC has mandated that all Xcel gas equipment incentives end by January 2027. If you're considering a heat pump, heat pump water heater, or any gas-to-electric conversion, act before that deadline to capture the current rebate levels — the most generous in state history.

Colorado's electricity landscape is changing faster than at any point in the past half-century. Rates are rising, but so are the tools and incentives available to manage those costs. The homeowners who come out ahead will be the ones who take action now — not the ones who wait for rates to stabilize on their own.