Advocates hope utility’s winter heat pump rate discount becomes model for Massachusetts utilities

Residents with heat pumps in four Massachusetts towns will soon pay hundreds of dollars less for their electricity over the winter, thanks to a new pricing approach advocates hope will become a model for utilities across the state.

The cost of powering these systems though, can be its own problem. Natural gas prices have been trending precipitously downward for the past two years and Massachusetts has long had some of the highest electricity prices in the country. This disparity can be particularly stark in the winter, when consumers using natural gas for heating get priority, requiring the grid to lean more heavily on dirtier, more expensive oil- and coal-fueled power plants, said Kyle Murray, Massachusetts program director for climate and energy nonprofit Acadia Center.

So switching from natural gas to an electric heat source — even a more efficient one like a heat pump — doesn’t always mean savings for a consumer, especially those with lower incomes.

“Electric rates are disproportionately higher than gas rates in the region,” Murray said.

Public utilities regulators are in the middle of considering a rate case filed by National Grid, which serves some 1.3 million customers in Massachusetts. National Grid has proposed what it calls a technology-neutral “electrification rate,” which would provide discounts to certain high-volume energy users, which would include heat pump users.

However, several advocates for low-income households and clean energy — including Acadia Center, Conservation Law Foundation, Environmental Defense Fund, Low-Income Energy Affordability Network — as well as the state energy department and Attorney General Andrea Campbell argue that this approach is inadequate. They’ve submitted comments urging regulators to require National Grid to offer a heat pump rate similar to Unitil’s plan, but modified to work within National Grid’s pricing model.

“Every intervenor in the docket who commented on the electrification proposal in any capacity was negative on it,” Murray said. “And the [department of public utilities] in its questioning seemed fairly skeptical as well.”

National Grid declined to comment on the pending rate case.

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