Recently, Xcel Energy reimbursed customers who volunteered to pay extra to support wind power, which is now one of the cheapest electricity sources. A program launched by Xcel Energy in 2003, which helped subsidize wind energy, is wrapping up as prices continue to fall, with money left over that will be sent back to participants. The bills of about 70,000 Windsource subscribers in Minnesota were recently adjusted and credited by Xcel. The 17-year-old plan has allowed customers to offset wind power with their electricity consumption, with a typical Minnesota customer recently paying about $9 extra per month.
The bill credits, which differed based on consumers’ subscription levels, are largely the product of record low wind power rates between June 2018 and April 2020, when prices fall below a fixed limit set for the scheme by the utility regulators. Xcel returned $6 million to customers this fall, and next year, before the service expires, at least one more rebate is planned. Windsource was one of the first renewable tariff schemes in the world to give customers the option of supporting renewable energy through a small premium on their bills. Xcel certified 20 wind projects to produce electricity for the program while the program was growing. When gaps in supply and revenue arise, the utility buys clean energy credits to make up the gap.
To offset more or half of their electricity consumption, clients buy Windsource in 100-kilowatt-hour installments. Half of the subscribers to Windsource replaced 100% of their energy usage with wind power, Xcel said. Green tariff pricing systems have expanded significantly once a unique offering by a handful of utilities, as demand for renewable energy has increased. Critics also wondered why specific green pricing schemes charge clients far more for wind and solar energy than utilities do. “What this shows me is what’s become of the green pricing is that the underlying logic of charging more people for energy that should cost cheaper cannot continue indefinitely in many more of these programs especially when you have more and more customers signing up,” said Andrew Butts, the creator of the Green Neighbor Challenge. With this web platform, customers can locate green customers around the world.
Clients charged a $2 premium per 100 kWh block when Windsource started. The fee was reduced to $1 per block as the price of wind power plummeted. In recent years, even the charge has proven to be unfair, which caused the refunds. Economics was part of the national fall in the price of wind energy. According to Lawrence Berkeley National Laboratory’s 2020 Wind Energies Industry Study, a decade earlier, power purchase deals with wind developers cost 7 cents per kWh. The number fell below 2 cents last year.