Mass. regulator orders National Grid to set lower winter rate for heat pumps

This story was first published by Energy News Network.

Environmental advocates are hailing a decision by Massachusetts regulators that will give more than 1.3 million households access to lower winter electricity prices if they use a heat pump in their home.

Public utilities regulators on Monday ordered National Grid, the state’s second-largest electric company, to develop a lower seasonal rate for houses with heat pumps. The decision comes three months after the state approved a similar rate plan by Unitil, an electric utility that serves 108,500 Massachusetts households.

“They hit the nail on the head here,” said Kyle Murray, Massachusetts program director for climate and energy nonprofit Acadia Center.

Heat pumps are a major element of Massachusetts’ strategy for going carbon neutral by 2050. However, high electricity prices and historically low natural gas prices make switching to a heat pump financially difficult for many people. Unitil’s pricing plan is an attempt to bridge that affordability gap and make heat pumps more accessible, said spokesperson Alec O’Meara.

National Grid had proposed a technology-neutral ​“electrification rate” that would have offered a discounted rate to high-volume electric consumers, whether the power demand was coming from an efficient heat pump, inefficient electric resistance heat, or even a pool heater. Environmental activists, advocates for low-income households, a solar industry group, the state energy department, and the state attorney general all filed comments objecting to this approach and pushing for a heat pump–specific rate like Unitil’s.

“The proposal that National Grid had filed wasn’t going to do anything to ensure that customers who opted into their electrification rate were actually participating in our decarbonization efforts,” said Priya Gandbhir, a senior attorney with the Conservation Law Foundation, one of the groups that pushed for a heat pump–specific rate.

In their order, regulators sided with the objectors. They concluded that National Grid’s proposal did not meet the state’s legal mandates to consider the impact of rate design changes on greenhouse gas emissions and energy efficiency, as opposed to Unitil’s approach, which removes a barrier to lower emissions and greater efficiency.

“The heat pump rate will reduce kilowatt- hour electricity rates for these customers during winter, when heat pumps replace fossil-fuel heating equipment, furthering the reduction of greenhouse gas emissions,” said Alanna Kelly, spokesperson for the state department of public utilities.

The order also encouraged National Grid to create the rate quickly so that it could be in effect before the coming winter heating season.