Owatonna utility commission approves time-of-use rate for residential electric heat customers

The Owatonna Public Utilities Commission voted June 25 to move residential electric-heat customers to a time-of-use rate, approving revisions to Policy #501.27 (Residential Time-of-Use Rates) and Policy #501.81 (Residential Electric Rates). The change takes effect Oct. 1, 2024, and will affect roughly 207 customers.

Director of Finance & Administration Olson presented the proposed changes, telling commissioners the switch reduces rate complexity and simplifies the billing system. Under the revision, electric-heat customers would face a lower winter on-peak and critical peak charge under the time-of-use structure; Olson said projected average savings for those customers are expected to be “very close” to the current electric heat credit. Affected customers will be notified over a three-month period and may opt out of the time-of-use rate, though staff advised the rate will generally be in customers’ financial interest.

The commission approved the policies on a unanimous voice vote after Commissioner Rossi moved the motion and Commissioner Johnson seconded. President Zirngible and Commissioners Doyal and Vetter voted Aye.

Why it matters: moving electric-heat accounts to time-of-use rates narrows the number of special-rate exceptions on Owatonna’s billing system and aligns customer incentives with off-peak usage. OPU staff estimated the change will simplify rate administration while maintaining customer savings similar to the previous electric-heat credit.

What to expect next: OPU will send notices to affected customers over the next three months explaining the change and how to opt out if they prefer. The transition date set by the commission is Oct. 1, 2024. During the meeting Commissioner Rossi, who said he is on a time-of-use plan, encouraged commissioners to consider the rate, noting personal monthly savings.