We’ve mentioned in previous blogs that winter usually brings the highest energy bills of the year to Minnesota households. For the households that heat their homes with electric heat, bills can be especially high, running in the hundreds of dollars each month.
If your household has electric heat as a primary heating source, we encourage you to contact your utility about winter electric heating rates and programs. Electric heat is often the most expensive way to heat a home, but discounted rates or programs can ease this cost. It’s worth asking your utility if they offer a special rate or program.
By law, no tax may be collected on your primary heating fuel November-April. Double check your heating bills to make sure you are not paying tax. If you are using electric heat, you may need to submit paperwork to your utility to make them aware of your heating source. If you have more than one heating fuel option (say, for example, you have an electric air source heat pump and a natural gas furnace), only the primary heating fuel is tax-exempt.
Beyond tax exemption, Utilities offer different heating discount programs. Here are some common examples:
- Discounted rate for primary heating fuel: For example, Xcel customers with electric heat can pay about 2.5 cents less per kWh during the winter.
- Dual fuel rates: If electricity is your primary heat source and you have another backup option, such as a propane boiler, your utility may have a dual fuel option. Utilities provide a discount on your electric heat if they can control your use during peak demand. Your heat may be turned off periodically, but with a backup heating source that kicks in automatically, you shouldn’t notice any change in your home’s temperature. In return, you may get a discount on your electric rate.
These programs may require a second electric meter and/or another device to be installed by your utility. An extra meter may come with an extra charge. Make sure you understand all of the charges and discounts so that you can calculate what makes the most financial sense for your home.
Feel free to contact us if you’d like a second opinion – or just someone to help with the math.