Minnesota Power offers off-peak rates in Duluth, Hermantown test program
If your schedule allows you to take showers, run the dishwasher and wash and dry clothes at night or on weekends, Minnesota Power might have a deal for you.
The Duluth-based utility is, for the first time, offering off-peak electric rates to some of its customers in Duluth and Hermantown.
The utility in recent days has mailed letters to 24,000 customers in the area explaining the program and asking its customers if they want to try the off-peak program that offers lower rates for electricity used between 10 p.m. and 8 a.m. on weekdays, and anytime on weekends.
That’s the time when Minnesota Power has extra electricity on its own system. But when demand increases during the day, the utility might have to purchase additional power through the grid system at a higher cost. If it can convince enough people to move big electric uses to off-peak hours, the utility can save money.
The program also could save some energy and be a little softer on the environment. If less energy is used at peak times, it reduces the number of times extra generators need to be fired up to handle the load, and fewer times Minnesota Power has to buy electricity from other utilities at higher cost or from more-polluting sources.
The new plan would pass part of those savings on to consumers who participate.
How much savings depends on how much electricity customers use now and whether it can switch those patterns to consumers more during nights and weekends, said Tina Koecher, manager of customer solutions for Minnesota Power.
The average Duluth area household uses about 750 kilowatt hours per month of electricity, and uses about 45 percent of that during peak hours. But if you can move 25 percent of your daytime use to nights or weekends, your bill would go down about $11.30 per month.
Move half of your home’s daytime use to nights or weekends and you could save $15 per month, reducing that part of your electrical bill from $49.18 to $34.19.
Koecher said a 50 percent shift in use may not be realistic for many homes. The biggest gobblers of electricity in most homes are heating and air conditioning, followed by water heaters, washing machines and dryers, dishwashers and refrigerators, as well as lighting and electrical appliances like computers and televisions.
“It really depends on what their habits are. We’re thinking 10 to 20 percent is very doable for some families,’’ she said.
Amy Rutledge, Minnesota Power spokeswoman, said more than 150 people have signed up for the off-peak program in just the first week it was offered.
“We’re asking some questions when people call to inquire and we’re saying that, if you are a retired person who spends all day at home, this may not be the best option,’’ Rutledge said. “But we’re very pleased with the response so far.”
Only customers who received the mailed invitation can apply because the utility has to limit the program to where it has the ability to time electrical use. The new rates apply only to those people who volunteer to take part. If customers don’t sign up, their rates won’t change.
The Minnesota Power pilot project is the first of its kind in Minnesota, Rutledge noted. The utility has offered lower rates for customers who accept “interruptible’’ service, such as for dual fuel heating, but hasn’t before had the ability to measure timed use.
The off-peak project, in the works since 2008, is in part funded by a $1.5 million grant from the U.S. Department of Energy that helped Minnesota Power install so-called “smart’’’ electric meters in area homes. There are now about 30,000 of those smart meters on Northeastern Minnesota customer’s homes where the utility has the ability to record exactly when during the day the customer is using power.
The federal government wants to do more than just change the time when electricity is used — it wants people to ultimately use less energy.
“Some other early pilots (projects) show that as people move when they use the electricity they also end up using less,’’ Koecher said. “The goal is that, as people think about when they are going to use energy, they will also use less of it.”