Maine’s heating season has begun and average fuel oil prices are already high, above $3.35 a gallon. But in the central Maine town of Madison, residents who burn oil have a new option to consider: electric space heaters that run on discount power equal to oil at $2.20 a gallon, with the rate locked in until the end of 2013.

A mid-sized version of these heaters costs roughly $3,500 installed. But if oil prices remain high, the fuel savings could help pay off the purchase price in four years or so.

With Madison as a pilot program, advocates hope to roll out similar rate plans statewide next year. They foresee thousands of Maine homes and businesses cutting oil use with “thermal storage” heaters that take advantage of the cheaper electricity available at night in New England. In time, they see the heaters complementing development of wind power in the region, which tends to be most available in winter and at night.

“It’s going to ultimately serve as a template for programs across the state,” said Sam Zaitlin, an owner at Thermal Energy Storage of Maine LLC in Saco.

Zaitlin’s company has been working for three years to line up the right regulations and partners to revive electric storage heat in Maine, a technology that’s well established in Europe, Canada and in other states.

Electric storage heaters convert “off-peak” electricity to heat and hold it in dense, ceramic bricks stacked in a heavily insulated cabinet. A thermostat and blower distribute the heat when needed. The heaters range from room units to whole-house models that also warm water. Costs run from $3,000 to $11,000.

Electric thermal storage heaters failed to gain much traction in Maine during the 1980s and 1990s. But Zaitlin and his partners say volatile oil prices, set against a surplus of lower-cost, nighttime electricity, have changed the picture.

“Off-peak electricity and its delivery is cheaper today than oil,” he said.

But it remains to be seen if Mainers are ready to embrace thermal electric storage. They’ll have to be convinced that the off-peak electric rates can beat oil for years to come, and that the total investment is a better alternative than wood pellets or direct-vent propane heaters, for instance.

To test the market, Thermal Energy Storage of Maine has teamed up with Madison Electric Works, the municipal utility that also serves Anson, Norridgewock and Starks. The utility sent information in last month’s bills to its 4,400 customers announcing the program, and also has details on its website.

Working through a wholesale supplier, Madison Electric Works has secured a long-term contract for power at 6 cents per kilowatt hour. It is delivering that power to customers for a penny. The overall price of 7 cents/kwh is less than half what home customers otherwise pay.

Maintaining the discount over time tops the list of concerns from customers asking about the new program, according to Calvin Ames, the utility’s superintendent. Some residents have had bad experiences with the price of electric heat, he said, and are suspicious of the oil price comparison. Ames tells them that the utility plans to keep the penny distribution rate, and expects off-peak power to remain stable for many years.

“In our territory, most of our customers trust us,” he said.

Adding to that element of trust is a partnership with Franklin-Somerset Federal Credit Union, which has set up a special loan program to help customers finance the heater conversion.

Customers can see installed models — and feel their heat output — at the utility’s office, the credit union’s Madison branch and Campbell’s Building Supply. Campbell’s is selling the units, which are made by Steffes Corp. of Dickinson, N.D. A large room unit being hooked up at Campbell’s costs roughly $3,500. That includes the cost of having an electrician wire the heater and a separate meter to track off-peak energy use.

The unit can offset 60 percent of a typical home’s oil use, according to calculations by Energy Storage of Maine. That assumption includes oil at $3.55 a gallon being burned at 72 percent efficiency. By that measure, a room-model storage heater could save $953, and a whole-house unit could save $1,683 a year.

These calculations need to be weighed against other options, according to Jamie Py, executive director of the Maine Energy Marketers Association. Py represents many of the state’s oil and propane dealers, who see residents using different forms of supplemental heat to offset oil. A direct-vent propane heater costs half as much to buy as a comparable electric storage heater, he noted, although the fuel is more expensive than off-peak electricity.

Py acknowledged that electric storage heat may wind up competing for market share with propane and oil heat, if Thermal Energy Storage of Maine can secure long-term discounts on off-peak rates.

That’s what the company has in mind. It’s negotiating with an energy supplier for an off-peak rate in the 6-cent range for customers served by Central Maine Power Co. and Bangor Hydro-Electric. Both utilities now have storage heat delivery rates above 2 cents/kwh. If the talks are successful, residents in much of the state may have a storage heat option available early next year.

Zaitlin sees thermal storage as eventually reducing Maine’s heavy dependence on oil heat, by shifting energy supply to local, renewable sources. The development of land- and ocean-based wind farms in the region offers the potential to charge heaters at night, when average wind speeds are highest.

Staff Writer Tux Turkel can be contacted at 791-6462 or at:

[email protected]