Combating Rising Heat Costs

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This winter is predicted to be colder than last year based on forecasts by the National Oceanic and Atmospheric Administration (NOAA). While we often hope for the forecasters to be wrong, there is one thing we know for certain, whether the weather is worse than last year or not, the cost to stay warm will be higher for most Americans. 

According to the Winter Fuels Outlook released annually by the U.S. Energy Information Administration (EIA), “Retail prices for energy are at or near multiyear highs in the United States.” This means that even if the weather is more mild than last year, most households will be spending more to heat their homes. People using electricity as their main heat source will see the lowest increase of all. Members of Lake Region who use electric heat will see little change in their rates this heating season, so the more electricity you use, the higher your bill will be. As a cooperative, our rates are set annually based on our costs, then voted on by the Board of Directors. Fortunately, kilowatt-hour rates remained stable for our members this past year, averaging around 10 cents per kWh for home and commercial use, with heat rates costing about half that. 

Every year, as heating season begins, calls come into the office inquiring about different ways to heat homes and shops using electricity. This year, we are experiencing more calls. Part of the reason for the higher interest in electric-based heat sources is due to the rising costs of fuels. The EIA expects “nearly half of U.S. households that heat primarily with natural gas will spend 30 percent more than they spent last winter, households that heat primarily with propane will spend 54 percent more, and households that heat primarily with heating oil will spend 43 percent more.” With the exception of co-op members, the EIA estimates households that heat primarily with electricity will spend 6-15 percent more to heat their homes. These projected increases are based on temperature forecasts and will fluctuate based on actual temperatures as we make our way through winter. 

LREA offers options to help keep costs down during winter. One of the main offerings is through “heat meters.” From Oct. 1 through April 30, energy used for heating is eligible for the current electric heat rate of 5.56 cents per kWh, or about half the regular charge. In order for members to receive the heat rate, sub-metering must be installed to record actual consumption by heating equipment. Equipment such as electric furnaces, baseboard and cove heat, and electric heat pumps are eligible for the discounted heat rate, as long as they are hard wired to the sub-meter. Space heaters, or portable heaters that plug into a traditional outlet are not eligible for the discounted heat rate. 

LREA offers rebates for members installing Electric Heat Pumps. To qualify for the rebates, members must provide proof of purchase and installation of a new heat pump with a HSPF rating of 8.5 or greater. This rating can be determined by the seller of the heat pump. Members are not required to participate in the load control program in order to qualify for the discounted rate in the heating season but they will need to participate in load control during the cooling months. Heat will not be controlled but air conditioning will be when our power supplier reaches its peak during the cooling season.

Heat Pumps are one of the most efficient forms of electric heat. There are different types of heat pumps for home and commercial use. Air-source heat pumps pull heat indoors from outdoor air in the winter and take it from indoor air in the summer. Air-source heat pumps require little maintenance, and it is relatively easy to convert from a propane or oil system. Ground-source heat pumps use natural energy stored in the earth beneath us. They use the same unit for heating, cooling and water heating and have the highest efficiency rating. Ground-source units have a higher initial cost, but their increased operating efficiency means a shorter payback period and equal huge savings for owners. Mini-split heat pumps are ductless and are ideal for older homes and home renovation. They are smaller than an air-source heat pump and are easy to install because there is no duct work. This 
type of unit is extremely energy efficient and one outdoor compressor unit can run multiple units inside.
There are many reasons for the projected rise in heating costs this winter. LREA continues to strive to provide you reliable power at an affordable rate. We encourage our members to conserve energy when possible, to keep your bills down and our rates stable. 

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