CUB helps consumer with electric heat save hundreds this heating season

Published February 4, 2021

I recently spoke with a woman whose January electricity bill for a rented 2-bedroom duplex was over $500! I had a conversation with her to understand a bit more about her home and her personal situation. I made some initial suggestions that would cut her bill by nearly one-third and also followed up with her utility to confirm the next steps. All Minnesotans who heat their homes with electricity should be aware of these options.

When reviewing energy bills, high winter electricity bills are always a red flag for CUB’s staff. Typically, Minnesotans see the highest electricity bills in the summer, due to air conditioning, unless they have electric heat. This was indeed the case. The customer has baseboard electric heat, which consumes a large amount of electricity.  

Xcel Energy, which provides this individual’s electricity service, has a reduced rate for customers like this who primarily heat their homes with electricity. That rate alone would have reduced her January bill by over $110. The electric space heating rate is available between the months of October through May, so signing up for this special rate will result in hundreds of dollars of savings each winter. During the other months of the year, June-September, she will pay regular summer residential rates.    

On top of the electric heat rate, in Minnesota, the primary fuel for heating a home is not subject to sales tax between November and April. Natural gas utilities apply this exemption automatically, but people who heat with electricity need to let their utility know. In this case, the tax exemption will reduce the customer’s electricity bill by another 7.875% by eliminating city, state, and transit improvement sales tax from her bill: another $40 in savings from the January bill. Additionally, the consumer will receive a sales tax refund for overpaid sales tax in the past few years through her utility. Recouping the past sales tax paid will result in a refund of hundreds of dollars for the customer.

So, using the January bill as an example, this customer would save over $150 in one month by being on a special electric heating rate and eliminating the sales tax. This was a very effective bill consultation. We love to help people save money and energy!

We don’t do this work alone. We want to give a big shout out to one of our energy partners that put us in touch with this customer: The Home Energy Squad, which is operated by the Center for Energy and Environment (CEE). The customer had initially reached out to the Home Energy Squad about having an audit to find ways to reduce her energy costs. In their conversation, she had questions about her bill. The Home Energy Squad staff person knew to refer the customer to us to help address her bill concerns. The consumer signed up online for one of our phone-in bill consultations, and it had this great result.   

We know there are other energy customers out there not taking advantage of special electric heating rates and sales tax exemption that could save them money. We will be working with our other energy partners to spread the word and ask you to do the same. Here are just a few examples of regular electric rates and special electric heating rates from Xcel Energy, Minnesota Power, and Ottertail Power Company. Each rate and program is a little different, so customers need to reach out to their utility to find out the best option for their situation. 

Please reach out to us if you have any questions about your winter heating bills: you can contact me directly at carmenc@cubminnesota.org or 651-300-4701, ext. 2. As always, we’re here to help.