Our Stance on Seasonal Heat Pump Rates
Re: D.P.U. 25-08 - Petition of Massachusetts Department of Energy Resources for Requesting the Department of Public Utilities Open an Investigation into a Seasonal Heat Pump Rate
June 22, 2025
Mark D. Marini, Secretary
Department of Public Utilities
One South Station, 3rd Floor
Boston, MA 02110
Re: D.P.U. 25-08 - Petition of Massachusetts Department of Energy Resources for Requesting the Department of Public Utilities Open an Investigation into a Seasonal Heat Pump Rate
Dear Secretary Marini,
I run Laminar Collective, a community-based research group focused on making electrification more affordable for consumers in the Boston metro area. We represent more than 850+ households who follow our research & several hundred of which have heat pumps.
I write today to support the DOER petition and IRWG recommendations for statewide seasonal heat pump rates, and to respectfully challenge several objections raised by the Distribution Companies in their joint filing of June 2, 2025.
Summary of Benefits of the DOER Petition, and Deeper Seasonal Heat Pump Rates
DOER’s proposed seasonal heat pump rates is a win for consumers and ratepayers.
Based on ISO New England's 2024 data, our winter peak load reaches only 76.55% of our maximum grid capacity in December and 74.11% in January. We have already built and paid for infrastructure to handle 24,871 MW of peak summer demand.
That infrastructure sits underutilized for significant portions of the year.
If we already paid for the grid capacity, we should use it as much as we can. And that’s why the DPU has a unique opportunity here to help ratepayers get the most for their money, and to provide households & homeowners with a more affordable heating option in heat pumps at an uncertain time in world energy markets.
Summary of Concerns
The Distribution Companies argue that establishing these seasonal heat pump rates beyond what has already been approved (a ~15% discounted rate) may not be worth the confusion, given that they already have plans to transition to AMI (i.e. smart meters) enabled time-of-use rates.
They also worry that once heat pump adoption accelerates to the point where the winter peak exceeds the summer peak, additional infrastructure investments will need to be made to accommodate peak demand, and that would increase costs for ratepayers overall (regardless of heat pump usage).
The Attorney General’s Office echoes these concerns, and I appreciate them looking out for ratepayers across the state.
Let me be clear: if we are a few short years from AMI-enabled time-of-use rates being deployed, and the winter peak is set to surpass the summertime peak by the end of this decade, I’d concur.
But based on realistic timelines, I do not think that will be the case.
The Distribution Companies' Timeline Concerns Are Overblown
The Distribution Companies argue that implementing a near-term seasonal rate design could cause "instability and confusion" when transitioning to AMI-enabled time-of-use rates. This concern, while understandable in theory, ignores the practical reality of AMI deployment timelines.
There is no solid timeline for comprehensive time-of-use rate implementation after AMI rollout. The Distribution Companies themselves acknowledge that Eversource and National Grid are only "beginning to roll out AMI meters in 2025." It will take multiple years to complete the rollout of smart meters.
In the absence of a solid timeline, we can default to prior examples: in California, Pacific Gas & Electric, the utility covering Northern California, took ten years to fully roll out time-of-use rates to consumers in California.
Even if we assume that MA is an easier market to tackle and it takes five years after AMI meter deployment, we’re still looking at the first half of the 2030s.
If we’re confident that time-of-use rates were 3 or 4 years away, sure – let’s consider whether it’s worth having more extensive heat pump rate discounts. But that’s not the case right now. And I think we can do a lot of good for consumers in the next 7 to 8 year period.
We are Far (10 Years) From a Winter Peak
The Distribution Companies argue that the proposed seasonal rates would "send price signals tied to the seasonal characteristics of a specific end use technology rather than to system marginal costs." This criticism would be valid if we were designing permanent rate structures, but we're not.
Current system marginal costs clearly favor winter usage over summer usage – that's precisely why seasonal differentiation makes economic sense today. The Distribution Companies' own data shows they anticipate winter peaking "within approximately the next ten years," which would be nearly 2035. Here’s ISO New England’s 10-year Electricity Demand Forecast:
This forecast was made prior to the latest legislative news on the national level re: incentive rollback in the potential reconciliation bill being debated right now in the Senate. If parity by 2033 is the baseline expectation, I wouldn’t be surprised that it gets pushed back by a year or 2 if the 25C and 25D incentives were substantially reduced.
Regarding Price Shock, Consumers Are Used to Phased Decreases in Incentives
The utilities bring up price shock upon the end of heat pump rates as a concern. I think that is a valid concern, but I also believe that consumers are well aware that incentive programs don't exist in perpetuity.
The Mass Save programs itself, for example, is phasing out in the coming decade with a $1,000 decrease in the maximum whole-home heat pump rebate every year. Given that every ratepayer receiving the heat pump rate is aware of the Mass Save program (as one proposed registration method is tied to Mass Save), I think they’ll understand a phased decrease in the heat pump rate discount as we approach a full cutover time-of-use rates.
Framing the deeper heat pump rate discount as a way to reach winter-summer parity on the grid would additionally create the expectation that these rates fulfill a purpose, and once that purpose has been fulfilled, we can operate on time-of-use. As a matter of fact, the IRWG recommendations already include provisions for monitoring and evaluation, including "a built-in glide path from seasonal rates to advanced, AMI-enabled rates" with "periodic re-evaluation and a possible sunset date for the seasonal rate offering."
The Path Forward
Mr. Secretary, this seasonal heat pump rate investigation represents exactly the kind of practical, win-win policy opportunity that rarely comes along. We can:
Reduce energy burden for thousands of heat pump customers
Make better use of existing grid infrastructure we've already paid for
Support the Commonwealth's climate goals through accelerated electrification
Establish monitoring and evaluation mechanisms to inform future rate design
The Distribution Companies' concerns about future transitions and administrative complexity are valid, but given the potentially decade-long timeline to full rollout of AMI-enabled time-of-use rates, I do think there’s a great opportunity for an intermediate, near-term solution in seasonal heat pump rates.
The consumers we work with daily are counting on leadership that prioritizes practical solutions over theoretical concerns. This is a change that makes sense financially, socially, and environmentally. If the Dept. of Public Utilities isn’t going to advocate for the public, what are they going to advocate for?
Respectfully,
Kit Wu1
Founder, Laminar Collective
cc: dpu.efiling@mass.gov, Marc Tassone → Scott Seigal, Hearing Officer
With substantial research support from Angelina Flores, & Tess Shotland
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Thanks for speaking up and sharing your wise strategies, Kit!