It’s not every day that a reporter shows up to your house with a calculator and asks you to do some math. But Jose Juste was up for the challenge.
Juste and his family live in a three-bedroom colonial-style home on a busy street in Newburyport. As he sat in his living room, a minisplit — a type of heat pump — hummed behind him.
Because the family heats the first floor of their house with two of these devices, they qualified for the new Massachusetts seasonal heat pump rate and got a break on their utility bills this winter. The discount comes on the distribution charge on their bills, which covers the cost of the poles, wires and substations required to get electricity to homes and businesses.
The state required its three major electric utilities to offer this new rate to residential customers this winter, hoping it would encourage more people to ditch their oil or natural gas furnaces for heat pumps, a climate-friendly alternative. According to the utility companies, about 140,000 households have enrolled so far.
Calculator in hand, Juste sorted through a pile of recent electric bills, preparing to figure out how much he saved this winter.
In November, Juste’s bill from National Grid included a $55 distribution charge, a sum that’s calculated by multiplying how much energy he used (expressed in kilowatt-hours) by the distribution rate. Without the heat pump rate, he calculated his distribution charge would have been about $97.
“So in the month of November,” he said, while tapping away at a small calculator, “it was a savings of $42 — which is pretty good.”
The heat pump rate is in effect between Nov. 1 and April 30. Juste hasn’t received his April bill yet, but so far he’s saved a total of about $269.
People who heat their whole homes with heat pumps are expected to save more. In announcing the new rate last fall, state officials predicted the average household would save $540 in the first winter of the program.
For Nate Heard of Shutesbury, the savings were just about that. Heard and his family heat their five-bedroom home with a geothermal heat pump system. They used more electricity than Juste’s family this past winter, and typically paid $120 – $145 in monthly distribution charges. Like Juste, Heard hasn’t received his April bill yet, but in the first five months with the heat pump rate, he saved $509.
In a region known for high electricity prices, the new rate doesn’t make it cheap to run a heat pump. But at a time when the cost of so many everyday expenses is rising, “everything helps,” Juste said.
The push for heat pumps
About three-quarters of homes in New England use fossil fuels like oil, natural gas and propane for heat. As a result, buildings are one of the largest sources of climate pollution in the region, second only to the transportation sector.
To reduce these planet-warming emissions, New England is relying on a two-pronged strategy.
Part one: electrify everything. For buildings, this entails convincing people to replace fossil fuel heating systems with electric heat — specifically heat pumps, which use less energy than traditional electric heating systems.
Part two: green the grid. This means running the electric grid increasingly on renewables and nuclear power.
Making these transitions was never going to be easy, Massachusetts energy officials have said, but one big obstacle they’ve run up against is the high cost of electricity. It’s hard to make the case for a home retrofit if it increases monthly utility bills.
Without the heat pump rate, installing an electric heat pump doesn’t guarantee lower home heating costs. A study commissioned by several environmental groups in 2025 found that with standard electric rates, residents in just 27% of Massachusetts homes heated by natural gas would reduce their bills by installing heat pumps. The picture was rosier for homes heated by oil, propane or electric resistance heating.
The calculus changes for many households, however, with a discounted heat pump rate. In fact, the study predicted that with the lower rate, 64% of all homes would save money by making the switch.
The logic behind the heat pump rate
The new heat pump rate was designed to strike a balance between making heat pumps more affordable for residents to operate, while also preventing price increases for people who don’t have them, said Elizabeth Mahony, commissioner of the Massachusetts Department of Energy Resources.
“Customers on heat pumps are still going to pay for their fair share,” she said. “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 rate is based on the idea that the New England grid, with all its poles and wires, is built to meet peak demand. The region hits that high point on hot afternoons in the summer, when everyone cranks their air conditioners. But in the winter, there’s extra capacity on the grid. So even when people install heat pumps, it doesn’t strain the system or require utilities to build costly, new infrastructure.
“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, an advocacy group that supported the new heat pump rate.
While the heat pump rate is saving some customers money now, it may be a temporary solution. Over the next decade, as more people buy EVs and install heat pumps, electricity demand in the winter is expected to rise significantly. By the mid-2030s, ISO New England, the regional grid operator, expects peak demand to shift from summer to winter.
At that point, the heat pump rate will no longer make sense, said Mark Kresowick, a senior policy director at the nonprofit research organization American Council for an Energy Efficient Economy. By then, he expects Massachusetts and many other New England states to have shifted the whole structure of electricity pricing.
Instead of a heat pump discount in winter months, he said, all customers could get lower rates for using electricity during off-peak times, like at night, a system known as “time of use rates.”
“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,” Kresowick said.
Until that happens, officials in other New England states are watching to see how Massachusetts’ first winter with a discounted heat pump rate goes. Mahony, at the Department of Energy Resources, said she speaks regularly with her counterparts in other states, and some — like those in Maine, Connecticut and Rhode Island — are particularly interested.
“We feel like we had a very successful winter,” she said, “but we’re going to get a lot of data in, to show us whether or not we are right.”
This article was originally published on WBUR.org.
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