Massachusetts ups winter energy discounts for homes with heat pumps

Massachusetts electric utilities National Grid and Unitil are cutting winter electricity rates even further for homes with heat pumps, starting November 1. A heat pump is a system that both heats and cools a home using electricity, and it's seen as a key replacement for gas or oil furnaces. Massachusetts was already the first state to require major utilities to offer lower winter rates for heat pump households, a discount that saved more than 65,000 customers over $37 million last winter. The new rates go further by also lowering transmission charges, the fees that pay for moving power long distances, not just local delivery costs. For a household using 600 kWh a month, this should mean an extra $16 to $21 in monthly savings on top of last year's discount.

The idea behind these rates is that heat pumps use more power in winter, when the grid has spare capacity, so charging heat pump owners the same delivery rates as everyone else doesn't reflect actual costs. With the new pricing, an analysis by the group Switchbox found more than half of Massachusetts households would now save money by switching from gas heat to a heat pump.

Massachusetts remains the only state requiring this kind of rate for major utilities, though similar ideas are being tried or studied in Minnesota, Maine, New York, and Rhode Island. If you're in Massachusetts and already have a heat pump, or are thinking about installing one, this rate change is worth checking with your utility about, since it directly affects what you'd pay to run it this winter.