Published January 25, 2022
For households that heat their home with electric heat, bills can be especially high, running in the hundreds of dollars each month. If you have 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. For example, Xcel customers with electric heat can pay about 2.8 cents less per kWh during the winter.
Electric heat customers can also benefit from a sales tax break on their bills. In Minnesota, the primary fuel for heating a home is not subject to sales tax from November to April. This includes any city, state, and transit taxes. Natural gas utilities apply this exemption automatically, but people who heat with electricity need to let their utility know. This can cut winter bills by at least 6.8% — and by nearly 9% in some places. According to the Department of Revenue, if you have been paying sales tax on your primary heating fuel you can request a refund for up to 3.5 years of overpaid sales taxes through your utility. Contact your utility for more information.
Additionally, if you have more than one heating fuel option—say, an electric air source heat pump and a backup natural gas furnace—only the primary heating fuel is tax-exempt. Your utility may also have a dual fuel program to reduce heating costs. If electricity is your primary heat source but you have a backup option such as a gas or propane furnace, utilities provide discounts on your electric heat if you allow them to control your use during times of 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.
Please reach out to us if you have any questions about your winter heating bills by emailing email@example.com or by calling 651-300-4701, ext. 2.
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