In a cozy basement in the Twin Cities suburb of Eagan, Eric Stahl is very excited about his water heater.
Stahl recently replaced his old leaking water heater with a 106-gallon Marathon heater and he is amazed at how much his water bills have gone down.
"I love it," he said. "I look forward to getting my electric bill every month, just to see the savings."
Stahl is among tens of thousands of homeowners in Minnesota who are saving money and electricity by using super-efficient water heaters that can be heated at night and provide hot water all day.
Stahl gets his electricity from Farmington-based Dakota Electric, one of 44 co-ops that provide power in Minnesota.
Like many electric co-ops in the upper Midwest, Dakota has been working hard to help their customers use energy more efficiently.
That saves customers like Stahl money, and it also helps the utility avoid having to build new power plants.
Electricity use peaks in the afternoon and evening, when everyone is home, fixing dinner, washing the dishes, and watching TV. When we go to bed, the demand for electricity drops like a rock.
"If we can move loads off peak, if we back down the generators and the wind is still blowing, we need to do something with that wind energy," said Michael Hoy, who directs energy and member services at Dakota Electric. "Dropping it into electric water heaters is a fantastic option."
The utility controls water heaters like Stahl's with a pager signal that allows only allows the heating element to turn on at night. But the tank is so big, and so well insulated, it will hold all the hot water the family needs for the next day.
Dakota Electric charges less than half the usual price to its customers who invest in these high-efficiency water heaters. They cost about $800, but the cheap electricity helps homeowners pay it off quickly.
In Minnesota, 70,000 have made the investment.
Three companies in the United States make these very efficient heaters. One of them is Water Heater Innovations in Eagan.
The company, a division of Rheem, designed the super-efficient tanks specifically to help utilities shave their peak demands, General Manager Jeff Scholten said.
"Our water heater will keep water hot for very long periods of time so you don't have to heat and re-heat it," Scholten said. "We have stories here in Minnesota where people have cottages and cabins up north, and when they leave they will turn the power off, and they can come back a week later and still have warm or hot water."
The company also guarantees the plastic tanks will never leak.
But federal officials are setting stricter standards for large-capacity water heaters. In four years they'll have to be more efficient than they are now.
Water Heater Innovations is developing a product that will meet the new federal guidelines. It will incorporate a heat pump that takes air from the house, compresses it, and uses it to heat the water.
But some utilities are worried that a higher price tag could discourage buyers, and they wonder how well the heat pump version would work in Minnesota basements.
They're testing some models now.