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Xcel Energy customers in Minnesota will likely soon have good reason to hold off on running dishwashers or charging vehicles until bedtime.
The state’s largest utility is asking regulators to approve a major change to how residential customers have paid for their electricity for decades.
In December, the company proposed moving away from the standard, flat hourly rate that almost all its customers currently pay and replacing it with a variable “time-of-use” rate design that charges more for power during periods of high demand.
Rates between 3 p.m. and 8 p.m. weekdays would be twice the rate customers currently pay, and seven times higher than the proposed overnight “off peak” rate between 12 a.m. to 6 a.m. Other hours of the day would be charged a “base” rate.
Winter electricity would be, on average, more than 30% cheaper for base and peak rates than Xcel’s summer rates. Xcel told regulators that typical customers will pay 17.8% more for electricity in summer and 10.6% less in winter, assuming no behavioral changes in consumption. Xcel customers use roughly 20% less electricity in winter as most currently heat their homes with natural gas.
Xcel wants time-of-use to be the default billing system for all residential customers, though customers could opt-out.
The proposal follows a two-year pilot project Xcel operated in neighborhoods in suburban Eden Prairie and the Longfellow area of South Minneapolis. The company found a modest shift in customers reducing energy in peak periods, enough to support broader adoption across its Minnesota territory, according to Xcel spokesperson Theo Keith.
“This new proposal will make our successful pilot available to more customers,” he said. “During the pilot, we saw that participants saved a modest amount on their energy bills even with a modest increase in overall energy usage. Customers responded to the pilot rate design by shifting some usage away from peak times with the highest energy prices.”
The new pricing structure is possible because of Xcel’s installation of more than 500,000 smart meters that will allow customers to better track their energy use through an online portal, Keith said. The proposal also fulfills a Public Utilities Commission requirement that Xcel move to time-of-use rates, he said.
The concept has parallels with the growth of dynamic pricing by hotels, airlines, ride-hailing services and sports and entertainment tickets. California has been the leader in time-of-use utility pricing, with power companies there using it as the default for billing customers. Several other utilities nationwide have similar rate programs or are studying its potential to help prepare the grid for more electrification and renewable energy. And Xcel’s Colorado subsidiary has begun rolling out time-of-use rates there.
The utility believes that by shifting consumption to later and overnight hours, it can take advantage of the abundant wind energy typically available during those periods, Keith said. Shifting to non-peak times also helps Xcel avoid building more power plants, especially peaker plants that operate only a handful of hours annually but often create high emissions.
Xcel is part of the Midcontinent Independent System Operator (MISO) regional energy market, one of two in the country forecasted to have a “capacity crunch” over the next five years, said Gabe Chan, an associate professor and energy policy expert at the University of Minnesota. He said that trying innovative approaches such as time-of-use to reduce consumption at high demand times will help balance the electric grid.
Citizens Utility Board of Minnesota executive director Annie Levenson-Falk said time-of-use rates could be more fair than the current rate because, under a flat rate, customers pay more than it costs to produce electricity in low-demand periods and less than the cost during high-demand times.
The consumer advocacy nonprofit’s Illinois affiliate found in a study “that time-of-use rates are more equitable” because lower-income households didn’t use much energy in peak periods than higher-income households, Levenson-Falk said.
Using 2016 data from Commonwealth Edison, Illinois’s largest utility company, the report showed that 97% of its customers would save money under a time-of-use plan without making any behavioral changes. They would reduce their bill by an average of 13.2%, with low-income households seeing an additional 1% savings.
Shifting electricity use to base and non-peak hours tends to reduce emissions, too, Levenson-Falk said. Wind energy is widely available at night, while solar energy tops out in the middle of the day. She said that as solar power grows in Minnesota, Xcel could adjust the peak to take advantage of the sun.
But there are drawbacks. Levenson-Falk said customers using power during peak hours will see substantial bill increases. Some low-income households may not have the ability to change consumption patterns. And customers may find it hard not to use electric stoves, heat pumps or water heaters during peaks.
“Are we going to be disincentivizing beneficial electrification?” she asked.
There’s also the problem of reducing peaks during some hours only to create them in other hours. A University of Texas study of 100 Austin homeowners using time-of-use rates found most shifted use of appliances such as heating, ventilation, and air conditioning equipment to non-peak times — so much so that they created a higher residential peak in lower-cost hours.
Xcel’s two-year “Flex Pricing” pilot study that ended in 2022 involved nearly 17,000 ratepayers in Eden Prairie and Minneapolis, with 10,000 in the time-of-use program and the rest in the control group. Working with consulting firm Guidehouse, Xcel discovered in the pilot that electricity demand during peak periods was “modest” in Eden Prairie. In Minneapolis, the same was true in the pilot’s first year before trailing off in year two.
The pilot found a small subsector of participants drove much of the reduction in energy use during peak times. Representing around 10% of the participants, these “highly engaged” customers understood time-of-use rates and made proactive decisions to decrease their electricity use.
Xcel concluded in its regulatory filing that “the demand impact was close to achieving the goal of incentivizing less energy consumption during peak times in a revenue-neutral manner.” The study saw customers increase their energy consumption slightly, shifting electricity use rather than reducing it.
Customer bills in Eden Prairie grew slightly and declined marginally in Minneapolis. Participants paid more than they would at the standard rate in summer and less in winter, but Eden Prairie did not see enough decline to make up the difference. The highly engaged participants made the most progress in seeing their bills decline yet averaged just a $4 monthly decrease.
The pilot’s income-qualified customers, mostly living in Minneapolis, saw bills reduced by 3%. Those customers were “statistically significantly more satisfied with the pilot than the general population was,” Xcel said. “This was like the response from participants who were seniors, renters, or those who use a smart thermostat.”
Matthew Grimley, a University of Minnesota researcher at the Chan Lab, said Xcel likely did not achieve more demand response because not all customers had the technology to control demand and reduce consumption, such as smart thermostats, controllable and electrified water heaters, and electric vehicles.
Xcel reported that fewer than 50% of pilot participants knew about energy efficiency kits the company made available to help them reduce energy use. Just 20% went through the process of receiving a kit. Grimley said Xcel will have to do a better job of sharing time-of-use kits for the rates to work.
Chan added that the variable rates should be only the start of a new way of thinking about how the electric grid operates. He believes giving rebates during critical peaks and using text messaging to ask customers to reduce their electricity might be “a more direct way that achieves the same goals at potentially much more effective scaling.”
Organizations and individuals can now forward comments to Xcel’s time-of-use docket. The Public Utilities Commission has not scheduled any hearings yet, but the utility hopes to begin dynamic pricing in 2025.
CLEAN ENERGY: Advocates credit a small northern New Mexico electric cooperative with paving the way for other rural utilities to ditch fossil fuels. (High Country News)
SOLAR: The federal Bureau of Land Management seeks public input on the proposed 117 MW Sapphire solar-plus-storage project in southern California. (news release)
LITHIUM: The Reno-Sparks Indian Colony looks to build coalitions and garner public support — rather than file lawsuits — to fight the Thacker Pass lithium mine in Nevada. (Associated Press)
ELECTRIC VEHICLES:
UTILITIES:
CLIMATE:
CARBON CAPTURE: Alaska researchers launch an $11 million study of the viability of a proposed 400 MW coal plant equipped with carbon capture. (Northern Journal)
NUCLEAR: An advanced nuclear fuel startup seeks a property tax break from a Washington city to incentivize its $39 million manufacturing facility expansion. (Tri-City Herald)
GRID: Researchers find the Pacific Northwest is susceptible to sudden drops in solar and wind production, or but these energy droughts would be less severe than in other regions due to an abundance of hydropower. (OPB)
OIL & GAS:
FOSSIL FUELS: Massachusetts officially allows seven municipalities to test banning oil and gas hookups in most construction and notable renovation projects. (Boston Globe)
UTILITIES: Connecticut utility regulators form a program to financially help eligible groups — like environmental justice communities or small businesses — participate in public utility proceedings. (CT News Junkie)
WIND: Maine lawmakers consider how to ease the process for getting a major wind farm off the ground in rural Aroostook County now that utility regulators are seeking to rebid the project. (Bangor Daily News)
GRID:
SOLAR:
ELECTRIC VEHICLES: Philadelphia’s municipal vehicle fleet reached 250 electric models in 2023, but thousands more city vehicles still run on gasoline. (WHYY)
BUILDINGS: Although more extreme weather events are hitting Maine, only 1% of homeowners have flood insurance. (Portland Press Herald)
POLICY:
BUILDINGS: New state incentives are pushing Mainers to adopt “whole-house” heat pump systems that make efficient electricity the primary home heat source and discourage the secondary use of oil or gas. (Energy News Network)
GRID:
OFFSHORE WIND:
TRANSIT: Around $142 million in federal funds will go toward improving public transit and flood mitigation along a Pittsburgh highway. (Trib Live)
SOLAR: More Maine towns are establishing rules and ordinances to limit and shape solar development within their boundaries, including Dixmont, where a recent ordinance requires solar applications to come with a decommissioning plan. (Bangor Daily News)
FOSSIL FUELS: After a more than decade-long ban, a gas driller will be allowed to drill 11 wells in Pennsylvania’s Dimock Township, reviving water contamination concerns. (Associated Press)
HYDROPOWER: In New York, a New Jersey renewable energy developer says it has had its preliminary permit application to build two hydroelectric plants at Sewall’s Island “accepted” by federal regulators. (NNY360)
WORKFORCE:
CLIMATE: In New York City, data from the annual Central Park Christmas Bird Count shows warmer temperatures are allowing more southern, typically migratory species to stick around. (Gothamist)
New state incentives are pushing Mainers to adopt “whole-house” heat pump systems, making efficient electricity the primary home heat source and discouraging the secondary use of oil or gas.
Federal tax credits are still available for a wider range of heat pump installations, and the state offers rebates for low-income households to install a heat pump as a supplemental heat source.
But the latest big rebate for families of any income in Maine, which has become a national leader in heat pump adoption, focuses on using this technology to heat and cool the user’s entire house — or close to it.
“Customers are then able to turn off their old central furnace or boiler, relegating it to an emergency backup system,” said Michael Stoddard, the executive director of the state’s energy incentives agency, Efficiency Maine, in an email. “When that happens, (heat pumps) are able to meet their full potential.”
The agency’s new whole-house rebate program aims to help meet Maine’s climate goals. First rolled out this fall, the rebate was revised in recent weeks in response to criticism and confusion from contractors over its compliance rules.
A whole-house heat pump system — also called whole-home, or whole-facility in a space like a school or business — means that heat pumps are the go-to source of heating in the winter, with any supplemental sources used infrequently or as emergency backups.
To receive Efficiency Maine’s new rebate, which covers 40% of project costs up to a $4,000 cap for people of any income or more for those of lower incomes, a heat pump system must be sized to serve at least 80% of the home’s potential heating load, from shoulder seasons to the coldest day of winter.
Eben Perkins, the chief strategy officer with the Maine-based energy consulting firm Competitive Energy Services, said this is just one way of defining a whole-house heat pump in the grand scheme: For example, his company tends to look at how much heat pumps are serving a client out of the whole year, rather than on a day-to-day basis.
Maine home heat targets are based on modeling of how many heat pumps and weatherization jobs it would take to offset the state’s top-in-the-nation reliance on heating oil and other use of fossil fuels in buildings, with statutory targets of cutting emissions 45% over 1990 levels by 2030 and 80% by 2050.
This sector, which includes schools, businesses and more along with homes and apartments, is second only to transportation in contributing to Maine’s emissions.
This past summer, the state hit an initial target of installing 100,000 heat pumps relative to 2019. Now, it’s working toward another 175,000 more units by 2027. Stoddard said the goal is to see 130,000 homes with one or two heat pump units by 2030, and 115,000 more with whole-house systems.
“The efficiency levels of heat pumps can be two-X, three-X, four-X technology compared to a combustion system. So one, it’s just a good technology that keeps on getting better,” said Perkins. “Second, it gives you a pathway to actually fully decarbonize the upstream fuel source… That’s the pathway we need to really deeply cut emissions at the state (level).”
Maine had about 580,000 households in 2022, per the U.S. Census, and about 56% of them use heating oil, according to federal data — slightly lower than in recent years, but still the highest rate in the country.
The state aims to make its energy usage 100% renewable by 2040.
The answer is technically yes, but ideally no, at least under Maine’s new rebate.
As they switch to whole-house heat pumps, eligible customers are asked to turn their oil- or gas-powered furnaces or boilers and connected thermostats off or all the way down, and to cover the systems’ switches. They can still use these systems for hot water heating or in connection with an emergency generator.
This fall, Maine walked back an earlier requirement that old fossil-fired systems be disabled or disconnected from electrical service entirely, with locks on their switches, amid pushback from heat pump installers and fuel oil vendors about reliability and other concerns.
Despite reverting the rebate to more of an honor system, Stoddard said avoiding supplemental fossil fuel use as completely as possible is key to maximizing heat pump benefits.
“Our research shows that the majority of heat pumps installed in Maine will save significantly less money and emissions when they are operated concurrently with a central furnace or boiler than when they operate alone,” he said.
The rebate rules suggest “room heaters, a wood stove, or small space heaters,” Stoddard said, to cover up to 20% of the home’s heating load alongside the whole-house heat pump system.
In theory, a whole-home heat pump system could have a range of configurations. But Efficiency Maine focuses its new rebates on heat pumps with one indoor unit per outdoor unit (which they call “single zone,” though contractors say this can have different meanings). These might be the customer’s first heat pumps, or they might add on to older units to make up that 80% heating overall capacity required by the state.
Dave Ragsdale, the HVAC division manager at Maine-based ReVision Energy, said heat pumps need to be carefully tailored to a home’s needs to maximize their efficiency.
“You really need to have the… capacity of your heat pump system match the heat load of the house as closely as possible,” he said. “To the extent you oversize a heat pump system, you’re creating a situation where it’s beginning to resemble, more and more, an old-fashioned heating system.”
Traditional boilers and furnaces, he said, are almost always far oversized to the house’s heating needs — because they can be. “When you have a call for heat in a room, the thermostat tells the boiler, ‘we need heat,’ (and) turns the boiler on. It doesn’t matter how many (units of heat) that boiler is rated for — it’s only going to run for as long as it needs to to get heat to that room to satisfy that thermostat,” Ragsdale said.
Heat pumps are different, he said: They perform best when they can run pretty much constantly and modulate their output in response to temperature needs. If a heat pump is sized to provide more heat than the house could ever need — or, say, if one outdoor compressor is sized to run heat pump heads in four rooms, though only one or two may be used at a time — it can lead to costly, inefficient “short-cycling.”
“As soon as (the oversized heat pump) turns on, its capacity is way in excess of the load,” Ragsdale said. “So almost immediately, it floods the room with heat and then turns off, and then the room loses heat, and then it turns on again,” much like a traditional fossil fuel-fired system.
Ragsdale said this need for fine-tuning is why Maine’s rebate focuses on those one-indoor, one-outdoor, “single-zone” units — and why he suggests customers choose whole-house systems that meet just a tiny bit less than their home’s peak hypothetical heating load, ideally 99% or 99.6% of it.
“That little adjustment is enough to bring the capacity of your system more in line with what you’re actually going to see throughout the course of the heating season,” Ragsdale said.
If pushed to 100%, the system would be overpowered almost every day of the year, reducing efficiency and driving up costs. In the 99% design, the whole-house system is more efficient year-round and can use its supplemental sources to take the edge off and improve performance in the coldest weather conditions.
Getting the most out of a whole-house system requires careful customer education and for contractors to assess a home’s energy needs in great detail, Ragsdale said. Assessing air leaks and insulation needs with an energy audit can be a key part of this process. Ultimately, he sees houses with a more open floor plan and excellent weatherization as the best candidates for a cost-effective whole-house system.
“One thing is crystal clear… this whole-house model is not going to be applicable to every house you come across,” he said. “If there’s a house that’s broken up into a lot of small rooms, it’s probably going to be difficult to make a (whole-house) heat pump system work really well there.”
The same goes for using existing ducts from a forced hot-air system to run heat pumps, accompanied by an air handler. Those ducts will need new insulation to safely carry cold air in the summer, which is a complex retrofit for an existing house. Even at best, Ragsdale said, “you’re losing a fair amount of (heat) in the distribution” relative to a ductless heat pump delivering its hot air more directly.
But for people who may be unsure or ill-suited for the whole-house switch, Ragsdale emphasized that other heat pump configurations can still help vastly reduce fossil fuel use and costs, especially with state and federal incentives.
“Heat pumps still make sense, even a house that doesn’t have the perfect layout,” he said.
He gave his own home as an example. It was built in the 1940s, with lots of small rooms.
“I put one (heat pump unit) in my living room, which is the single biggest room, so I’m taking a big chunk out of my heat load even before I stop using my boiler altogether,” he said. “Most of that heat, frankly, in the shoulder seasons, managed to get its way around the house enough so that I was perfectly comfortable.
“Only in a couple weeks out of the winter,” he said, “did I have to turn that boiler on to … take the chill off.”
ELECTRIC VEHICLES: Maryland is now officially the tenth state to adopt the Advanced Clean Trucks rule, phasing in zero-emission medium- and heavy-duty vehicles between model year 2027 and 2035. (news release)
GRID:
OFFSHORE WIND:
SOLAR:
COAL: Residents of Baltimore’s Curtis Bay community want Maryland not to renew a rail company’s air permit because of the neighborhood pollution caused by its coal dust pile. (Baltimore Sun)
FINANCE: A Washington, D.C. property assessed clean energy loan program surpasses $100 million in financed projects following the close of a $6.1 million financing of efficiency and renewable energy measures at a Georgetown hotel. (news release)
AFFORDABILITY: Eversource proposes a significant electric supply rate drop that should reduce power bills by around 35% starting in February. (WMUR)
CLIMATE: In Maine, some Portland residents say plans to cut down trees to expand a surface parking lot at the airport are entirely out-of-step with the region’s climate goals. (Portland Press Herald, Maine Public Radio)
The following story is the third in a series produced in collaboration with KAXE/KBXE, an independent, nonprofit community radio station that tells the stories of northern Minnesota.
A Minnesota taconite mining company and its electric utility are seeking federal funding for a demonstration project aimed at slashing diesel fuel use and greenhouse gas emissions.
After an unsuccessful attempt to secure money this spring from the state Legislature, U.S. Steel and Minnesota Power have applied for a U.S. Department of Energy grant in hopes of kickstarting the project, which seeks to test a system to partially power mining trucks with electricity.
Once loaded, the enormous vehicles would connect to overhead power lines for the steepest part of their climb from the open pit mine. Running on electricity for that portion could reduce diesel fuel use by 70% per trip, according to the companies’ presentation to legislators earlier this year.
That also means a dramatic reduction in greenhouse gas emissions. A new Minnesota law requires power companies to only sell clean electricity by 2040, a target that Minnesota Power is making progress toward. If powered by carbon-free electricity, one mine trolley in the U.S. Steel demonstration project would equate to replacing 520 gas-powered vehicles with electric on Minnesota’s roads, each year.
David Chura, manager of emerging initiatives for Minnesota Power’s parent company ALLETE, said the pilot project would provide insight into whether trolley systems could be scaled across the industry. The steel industry is seeing growing pressure from government, investors, and customers to lower its climate impact. U.S. Steel has committed to achieving net-zero carbon emissions by 2050.
With the corporate green energy goals of Minnesota Power and U.S. Steel in mind, Chura said exploring applications of electrification in industrial settings was a natural step.
“We developed some model mines based on characteristics of actual mines here on the on the Iron Range,” Chura said. “That really helped inform our understanding of mine truck electrification and the opportunities here.”
Chura said energy savings are site-specific, meaning it depends on the steepness of the grade, the length of the haul and other factors. But this project’s anticipated fuel savings are 1.4 million gallons of diesel each year, amounting to 14,000 metric tons of carbon emissions. With those figures, mine trolleys could be a key approach to climate-friendly practices.
“That’s a very significant reduction of emissions as well as criteria pollutants in a key area of the state,” Chura said, noting the area’s proximity to the Boundary Waters, Voyageurs National Park, and state-designated environmental justice communities.
The idea of electric-powered mining trucks isn’t new. The 1970s oil crisis prompted numerous studies exploring benefits, according to mining electrification and automation company ABB. Despite this history, adoption has been slow. But ABB, which produces mine trolley systems, said recent projects demonstrating positive impacts show demand is on the rise. This includes in an open pit copper mine in Sweden operated by mining company Boliden.
Battery-powered electric mining trucks — which wouldn’t require hitching to a trolley line for hauling — are also moving closer to viability. In 2022, Caterpillar announced it successfully demonstrated a prototype of its first battery-powered truck at the company’s Tuscon, Arizona, proving grounds. The facility is set up to test sustainable solutions mining companies can use in their operations, offering firsthand experience with what it takes to run an electrified mining site.
Other types of clean fuel options are emerging, too. According to Caterpillar, green hydrogen production, fuel cell power generation and energy storage systems are all part of the equation.
“The site will also leverage a variety of renewable power sources, including wind, solar and hydrogen, capable of powering the facility and its products as they become electrified,” a news release stated. “The transformation of the facility will also serve as a learning platform for optimizing charging and energy management integration.”
The project in Minnesota would focus on converting existing trucks that operate on a diesel-electric hybrid system, similar to rail locomotives. Chura says some of these trucks, which have electric motors on each wheel, are already in use on the Iron Range.
Converting a truck to utilize overhead power lines to run the motors costs about $1.1 million, according to a presentation prepared for the Minnesota Legislature. The infrastructure costs would run $5 million-$8 million per mile, according to Chura. But the lines would be installed on the steepest parts of the trucks’ route, where the diesel engine works the hardest, resulting in substantial fuel savings.
“Just as the state has helped incentivize residential and commercial electric vehicle service, funding from either the state or the feds would help achieve those same benefits, but yet, at an industrial scale,” Chura said. “And those benefits really benefit all taxpayers.”
Bills were introduced in the state House and Senate this year to provide a $10 million grant, but they didn’t make it out of committee.
John Arbogast, District 11 staff representative for the United Steelworkers, testified in committee on behalf of the bill.
“Even some of the people that you thought might have been opposed to it were like, ‘Holy cow, is this interesting,’” Arbogast said.
Arbogast spent 26 years working at U.S. Steel’s MinnTac mine in Mountain Iron and is now the co-chair of the Iron Ore Alliance, a partnership between U.S. Steel and the United Steelworkers. He said environmental policy issues are one subject on which the union and the company often find agreement.
The trolley system would also increase the speed of the trucks as they travel up the incline, an aspect Arbogast said he thinks will appeal to the mining truck drivers.
“I think our members, the men and women who drive the trucks, will really like that,” he said. “Because they’re really good at what they do, and they have a lot of pride in hauling the ore to the crusher and getting as many loads as they can in their 12-hour shifts.”
Chura noted that the faster speeds mean a site could potentially get by with fewer trucks, which can cost millions of dollars each.
State Sen. Grant Hauschild, DFL-Hermantown, was chief author of the bill. He said he’s committed to fighting for the project into the future as part of an overall approach to a cleaner energy economy.
“Our mines are a critical part of that effort, and so why don’t we look for opportunities to move towards a cleaner industry, while also providing the very minerals and resources that we need in order to transition?” Hauschild said. “I think it’s a really a perfect putting-together of the puzzle pieces that make our region so strong and vital.”
The project partners turned their sights toward the federal government, applying for funds through the Department of Energy’s Office of Clean Energy Demonstrations. About $6 billion will fund projects aimed at reducing emissions in industrial subsectors, with award announcements expected early next year.
ELECTRIFICATION: A new Massachusetts policy aims to push the state away from natural gas heating, and at least 11 other states — including four in the Northeast — could take similar action. (Inside Climate News)
OIL & GAS: Exxon settles a 2016 lawsuit over the climate preparedness of a Boston-area petroleum storage terminal, agreeing to confidential terms that intervening environmentalists say protect the community. (E&E News)
GRID:
OFFSHORE WIND:
TRANSPORTATION: New York City’s council passes a new measure to accelerate protected bike lane development by changing the public comment process required. (Brooklyn Daily Eagle)
AFFORDABILITY: A Connecticut nonprofit’s new report shows the state’s energy affordability gap has grown 37% since last year, finding almost 250,000 households paid more than 6% of their income on energy bills. (CT Examiner)
CLIMATE:
BUILDINGS: The developers of a community of solar-powered homes in Ellicott City, Maryland, say the new houses will be certified by the U.S. Department of Energy to be up to 50% more energy efficient than a typical new home. (Washington Post)
SOLAR: After over a decade of discussion, a Pennsylvania farming family finally adds a solar roof to one of their barns with the help of a roughly $229,000 federal rural energy grant. (Lancaster Farming)
A year after the war in Ukraine drove record-high fossil fuel prices for winter heating in oil-dependent Maine, demand for efficient electric heat pumps remains steady despite new challenges.
Spikes in fuel prices don’t tend to immediately translate to increased heat pump demand, officials said, but rather may spark new interest in oil and gas alternatives and other ways to cut back on heating costs.
“We do see a lot more visits (after a price spike) to the Efficiency Maine website and call center, looking for information about rebates and how to find a contractor,” said Michael Stoddard, the executive director of the quasi-governmental agency, which provides rebates for energy-saving upgrades.
In the months after such a spike, he said, heat pump contractors may start to get busier with new jobs.
“Traditionally these consumers were curious to learn if they could save money by switching to propane or natural gas, or burning firewood or pellets,” he said. “But now it seems they are mostly interested in switching to heat pumps because they cost less to operate and deliver air conditioning in the summer.”
Many Maine contractors say summer is their busiest time for this reason, and have been booked out months on heat pump installations since well before heating oil prices neared $7 a gallon a year ago.
“I am busy all year round,” said Sam Black, the owner and operator of Blacks Heat Pumps in Glenburn. He said he’s already had a few prospective customers ask about new rebates expected from the Inflation Reduction Act in 2024. Maine is still deciding on how it will allocate billions in funding from that package.
A note on the website of Midcoast Energy Systems, an HVAC contractor based in Damariscotta, Maine, says “manufacturer and distribution supply chain issues” have been making it tough to maintain a consistent heat pump inventory.
“Unfortunately, this does delay our ability to schedule installs as quickly and regularly as we’d like,” the company’s website says. “We are, however, doing the best we can with these market restrictions to work with customers as efficiently as possible.”
In the year since last winter’s fuel price crisis, Black has also heard “a lot of complaining” from his heat pump customers about high electricity rates. Already among the highest in the contiguous U.S., these rates increased sharply in Maine in January 2023.
The increase was largely due to the same geopolitical factors that made heating oil so expensive last winter — constrained global fossil fuel supplies and high prices, especially for fracked gas, which powers much of the New England grid and also supplies far more heating in most of the region outside Maine.
By the same token, Maine regulators announced this week that electric rates will be reduced in 2024. “This is a much different scenario than we saw last year at this time, with natural gas prices coming down significantly since then,” said state Public Utilities Commission chair Phil Bartlett in a statement.
People who installed a heat pump in summer 2022, Black said, may have been caught off guard by a high electric bill after the new rates took effect at the height of the cold season — though an electric bill for one or two home heat pumps would still be far less than a typical oil bill, even at more average prices.
The Maine Governor’s Energy Office tracks heating fuel prices on a weekly basis. They reported that the high heating oil price in the state was $4.65 per gallon as of Nov. 13, 2023, compared to $6.74 in the same week in 2022. In that week, even the low-end oil price was higher than the current highest price in the state.
Kerosene prices were above $7 per gallon last November and now stand at $4.99 on average in Maine. Propane for home heating has decreased in price by about a quarter, down to just over $3 a gallon to end November.
“As we approach winter, energy prices are expected to be lower than the prior two years,” said energy office director Dan Burgess in a Nov. 9 press release announcing a state guide to saving money on home heat. “However, volatile energy markets around the world continue to impact heating bills here at home.”
Maine relies more on oil for home heat than any other state, but this is slowly changing. The state said in its press release that about 56% of Mainers used heating oil in 2022, down from more than 60% in much of the past decade, according to the U.S. Energy Information Administration.
Electric heat users increased from about 6% of the state’s population to nearly 11% in the same period.
“From 2018-2022, Maine saw a 10 percent decrease in heating oil as a primary fuel for home heating with an increase in households utilizing electricity during that time,” the state energy office said in its release. “The period coincides with record adoption of high efficiency air source heat pumps in Maine.”
Efficiency Maine did not have data immediately available to illustrate the relationship between heat pump demand and fossil fuel prices. But the agency told The New York Times that as of early November, they’d given rebates for more than 32,000 new heat pumps so far in 2023, compared to 28,000 last year.
The state announced this past summer that it had surpassed a target of installing 100,000 new heat pumps by 2025. Gov. Janet Mills upped the goal to 175,000 more heat pumps by 2027.
The state climate plan, due for its first four-year update at the end of next year, seeks to encourage more multi-unit or “whole home” heat pump systems as total fossil fuel replacements by 2030. Officials have said these goals are directly based on modeled reductions in carbon emissions.
A 128-year-old Cleveland-area industrial equipment manufacturer is among the newest makers of fast chargers for the growing electric vehicle market.
Lincoln Electric’s new Velion DC fast charger adapts and adds to technology the company has used for its welding machines and other heavy-duty power equipment.
The innovation is an example of how more U.S. manufacturers outside of the energy sector are beginning to find sometimes unexpected opportunities to participate in the country’s growing clean energy economy.
It all started almost two years ago when a group of senior engineers walked into president and CEO Chris Mapes’ office and explained the similarities between direct-current electric vehicle chargers and the plasma and electronics equipment the company has long manufactured, adding: “We think we can make these.”
“If you were to open up a welding machine or a plasma cutting machine, you would see power electronics,” Mapes explained, following a ribbon-cutting ceremony in Euclid, Ohio, last week for the company’s new fast charger product. Software engineering works with printed circuit boards to manage power, similar to what happens in a DC fast charger.
The company already has its own printed circuit board manufacturing facility. The innovation challenge was developing software to let a charger interface with any electric vehicle. When people plug in a vehicle, it and the charger go through a series of electronic messages and “handshakes.” Those share information about the car and the charger, as well as details about how much electricity is needed, signals and feedback for a precharge test, and then the actual charge.
Reliability has been a challenge for electric vehicle charging. Drivers can plan trips to stop at charging stations along the way, but out-of-order chargers can cause frustration and derail trips. That all adds to range anxiety.
Steve Sumner, vice president for corporate innovation, said some other EV chargers “were born out of designs and manufacturing strategies that were more appropriate for lab-grade equipment — something that would see its whole life inside in perfect conditions.” In the real world, rain, snow, cold temperatures, hot temperatures, wind, dust and other factors can mess with electronics.
“What Lincoln Electric’s really known for, besides being a very good power conversion company, is making devices that last and live their whole lives outside,” Sumner said, noting that the company’s industrial products have been used on ships, in deserts and even in Antarctica. Likewise, the new charger is “purpose-built for ruggedness in the field.”
One reason for that reliability is that the company coats its printed circuit boards with a clear plastic epoxy. Two circuit boards go together in a metal casing to make 50-kilowatt modules.
Three of those modules make up the heart of the charger’s power tower, which typically sits behind a fence near a grid connection. The relatively few electrical connections between the modules and other parts of the equipment also provide protection from the elements.
“Because it’s so ‘simple’ and clean in design, and well protected, that’s where we believe the inherent reliability comes from,” Sumner said.
As an established company that began in the United States, Lincoln Electric was already compliant with Federal Highway Administration’s Buy America standards, levy standards and other regulatory programs, said Sheila Cockburn, who works with the U.S. Department of Transportation’s Joint Office of Energy and Transportation that advises on those standards.
“They’re leveraging their current technology to enter a newer market,” Cockburn said. “And they’ve been smart in being able to see the vision of where things are going and being able to pivot to use what they have to supply the new market.”
The move is an example of how companies can play a role in the clean energy economy, even if they aren’t currently part of the energy sector, said Rick Stockburger, president and CEO of BRITE Energy Innovators, based in Warren, Ohio. The organization acts as a hub to provide business and technical expertise to entrepreneurs looking to serve the energy sector.
“It’s exactly the type of leadership we need to see from all of our legacy manufacturers in developing new products,” Stockburger said.
The Bipartisan Infrastructure Act, the Inflation Reduction Act, and other recent federal policies and funding programs can help private manufacturers make that transition.
“If you look at what came down in legislation from the past three years, we’re not leaving behind American manufacturing like we did with the solar tax credits in the Obama administration,” Stockburger said. “We put American-made caveats in all of these bills.” And he looks forward to seeing what comes next from other companies.
“The one thing I’ll never underestimate is the power of American innovation,” Stockburger said. “There are just really, really smart people that look at opportunity and frankly are interested in seizing it.”
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