Massachusetts Offers Winter Electricity Discounts To Heat Pump Users

Massachusetts has launched a new seasonal heat pump rate that discounts the distribution charge on residential electricity from Nov. 1 through April 30.

According to a WBUR report, state policy requires the three major electric utilities to offer the winter-rate option to residential customers. The goal is to promote electrification and reduce climate-polluting fossil fuel heating.

When it announced the new rate last fall, state officials anticipated the average household would save $540 during the first winter of the program. WBUR spoke with Nate Heard in Shutesbury, who uses a geothermal heat pump in his five-bedroom home. Heard said he saved about $509 in the first five months, consistent with early projections for full-home heat pump users.

According to WBUR, the new heat pump rate aims to balance making heat pumps more affordable for residents to operate with preventing price increases for people who don't use them, said Elizabeth Mahony, commissioner of the Massachusetts Department of Energy Resources (DOER).

"Customers on heat pumps are still going to pay for their fair share," she stated to WBUR. "The rest of us who don't have a heat pump won't pay anything extra. And we still have enough money to keep the grid safe and reliable."

The premise of the heat pump rate is that the winter grid has spare capacity. Higher heat pump use is not expected to require new infrastructure, according to Mahony and energy advocates.

"When you get a heat pump, you're going to be paying for more kilowatt-hours to the utility during the heating season, but you're not causing an increased expense from the utility to service you," said Larry Chretien, executive director of the Green Energy Consumers Alliance. This advocacy group backed the idea for the new heat pump rate.

Mark Kresowik, a senior policy director at the nonprofit research organization American Council for an Energy-Efficient Economy, however, believes the heat pump rate is only a temporary solution. He noted that over the next 10 years, as more people purchase electric vehicles and install heat pumps, winter electricity demand will increase substantially. 

By the mid-2030s, ISO New England, the regional grid operator, anticipates peak electricity demand shifting from summer to winter.

Kresowik believes that a broader shift to time-of-use rates, where off-peak electricity is cheaper, could eventually supersede seasonal discounts as the grid evolves.

"Moving as much of our energy demand to those off-peak periods, when we're not fully utilizing the grid, is definitely the direction we need to be going," he said in a statement to WBUR.