Monday | December 15, 2025
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Xcel Raises GVP’s Generation and Transmission Rates

2026 rates include 10% generation demand increase

by Rita-Lyn Sanders, Director of Member Services and Communication

GRAND JUNCTION, COLO. - (December 15, 2025)  The cost of electricity is going up for Grand Valley Power. As a distribution cooperative, GVP doesn’t generate the electricity that its consumers use; rather, it purchases electricity from other sources to distribute to its consumers.

Grand Valley Power currently buys electricity from Xcel Energy, also known as the Public Service Company of Colorado (PSCo). As GVP’s wholesale power supplier, PSCo has notified us that its rates for generation demand, transmission demand, and generation energy will increase effective January 1, 2026.

To break it down, PSCo’s rates will increase:

  • 7% for Generation Energy. PSCo has notified GVP that its energy charges will go up 7% per kilowatt hour. The cost of electricity used each month by GVP consumers is the largest component of the monthly power bill that we receive from PSCo.
  • 10% for Generation Demand. PSCo charges GVP by the kilowatt for the cooperative’s highest point of demand each month. PSCo uses the demand charge to cover the fixed costs of generating electricity. Grand Valley Power’s demand varies during the year from a low of 35 megawatts (35,000 kW) in the spring and fall to a peak demand in the 60+ MW in the summer when air conditioner usage is at its highest in the Grand Valley. This year our peak demand occurred in August when GVP consumers drew 65.3 MW (65,300 kW) of electricity from the grid. You can find our system’s peak demand in the annual report. The generation demand charge that GVP pays to PSCo for the highest amount of electricity that GVP consumers draw during the month is the second largest component of the cooperative’s monthly power bill.
  • 21% for Transmission Demand. This is another demand charge, but it is based on Xcel’s peak, when the highest amount of electricity is flowing through its transmission system. PSCo charges GVP by the kW for the amount of electricity that GVP draws at the moment when total demand is highest on PSCo’s system. PSCo uses the transmission demand charge to pay for the expense of power lines, substations, equipment, and time it takes to maintain a reliable power grid that will provide all of the electricity everyone needs when demand is highest.

PSCo has filed these rates with the Federal Energy Regulatory Commission. The increase is expected to impact GVP by about $1 million in 2026. The cost of purchased power was 56% of GVP’s expenses in 2024.

PSCo sites several reasons for the increases, from clean energy requirements in Colorado and the cost of Colorado’s Power Pathway project to the cost of retiring generation facilities such as coal plants before the end of their lifespan. As an investor-owned utility, Xcel has historically paid its shareholders a quarterly dividend of 2.8% of the share value.

On June 1, 2028, GVP will begin buying its electricity from Guzman Energy. The new purchase agreement will help stabilize electricity rates for GVP’s consumers. After the transition, however, GVP will still rely on PSCo for transmission of the energy that our consumers use.