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Using electric heat this winter? Ask your utility about ways to save

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.

Author: Carmen Carruthers

5 Responses to "Using electric heat this winter? Ask your utility about ways to save"

  1. Eric Sandeen Posted on December 17, 2018 at 12:20 pm

    Any idea how “primary fuel” is determined? We’ve been heating w/ an air source heat pump as much as possible this season for environmental reasons, but fall back to a gas boiler when the temp gets too low. Is the “primary” fuel determination just “on your honor?” We have Xcel for our utility. Thanks!

  2. Carmen Carruthers Posted on December 17, 2018 at 6:48 pm

    Thank you for your question! You will want to inquire directly with your utility, Xcel. Call customer service and let them know you are interested in participating in the winter electric heat rate. They will have you fill out an application, and from that they will determine if you are eligible for the discounted rate. Feel free to contact us again with any other questions.

  3. Ellen Konerza Posted on November 29, 2023 at 8:41 am

    In order to keep this thread updated as of Nov 29 2023, you’ll want to ask Xcel for the ‘Electric Space Heating’ rate. This allows folks with electric primary heat sources to get lower rates from October-May. We’ve just replaced our natural gas furnace with an Air Source Heat Pump, and are in the process of getting this lower rate.

  4. Carmen Carruthers Posted on November 30, 2023 at 4:14 pm

    Thank you for sharing this! Yes, Xcel’s electric heat rate is called the Electric Space Heating rate. Look for a new updated blog coming soon about electric heating.

  5. Dick Mabbs Posted on January 30, 2024 at 2:00 pm

    Just called Excel to ask for electrical heating rate for our new ASHP. The representative signed me up and gave me a reference # for the call. Fingers crossed. She said we should see the cheaper rate on our next bill.

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