New electric rates for heat pump owners helped more than 140,000 Massachusetts households save money on their heating bills this winter.

Massachusetts consumers with home heat pumps saved some $37 million on their power bills — an average of more than $250 per customer — for the period from November 1 to March 31, compared to what they would have paid without the new seasonal rates. The seasonal rates are in effect until the end of April.

The state Department of Public Utilities is mulling a proposal to make its winter heat pump rates even lower.

In at least two additional states, conversations are happening about the possibility of creating discounted rates for customers using the fossil-fuel-free technology. Rhode Island is actively considering heat pump rates, and a new report from climate think tank Switchbox outlines the policy’s potential in New York.

“This was a big deal, for Massachusetts to be the first state to implement these rates with all of the major investor-owned utilities,” said Amanda Sachs, state policy manager at electrification nonprofit Rewiring America. ​“It really helps our case for electrification being a key part of energy affordability.”

Massachusetts, Rhode Island, and New York all have ambitious climate targets, cold weather, and lots of drafty old homes that use fossil-fuel heating. Heat pumps, which create no carbon emissions other than those associated with the electricity used to run them, are vital to decarbonizing each state’s buildings.

All three already have financial incentives in place to help residents with the up-front cost of installing heat pumps. Worries about high electricity rates, however, have been a more stubborn barrier to adoption, particularly for homeowners heating with natural gas, which has long been a less-expensive option.

Heat pump rates attempt to eliminate that obstacle by discounting the price of electricity for all the power consumed by houses using the equipment.

For example, even without special rates, nearly 45% of Massachusetts households would have saved money by switching to a heat pump, according to an analysis released last year by Switchbox. That number jumps to 64% with the existing heat pump discount and could go up to almost 82% if the deeper proposed cuts are implemented. Recent surges in oil prices could boost savings for homeowners using heating oil.

The logic behind these discounts is that traditional electricity rates overcharge heat pump owners for their share of grid construction and upkeep.

The delivery portion of a residential electric bill pays for the poles and wires needed to carry power to customers. Most of this charge is paid volumetrically: The more electricity you use, the more you pay. So if a homeowner installs a heat pump, their power consumption, and thus their delivery charges, will go up significantly.

It might seem to make sense on the surface, but it’s actually quite unfair, said Juan-Pablo Velez, Switchbox’s executive director.

That’s because the grid is built to work at the moments when demand is highest — those hot summer afternoons when everyone turns on their air conditioning at the same time. During the winter, demand is lower, and there’s plenty of room on the system for electrons to flow to heat pumps without the need for infrastructure improvements. So, delivering power to a growing number of heat pumps doesn’t really cost the utilities more in grid maintenance or upgrades, but consumers are still paying a lot more.

In New York, for example, it costs utilities 2% more to deliver energy to heat pump users than to other homes, but heat pump households pay more than twice as much in delivery charges as their neighbors who warm with fossil fuels, according to the new Switchbox report.

“Heat pump customers using the system in the winter are not driving the same infrastructure costs as the summer peaks,” Sachs said. A heat pump rate ​“fixes that mismatch to make electrification more affordable.”

These rates are not a permanent fix. As heat pump adoption grows, the grid will eventually experience peak demand in the winter, rather than the summer, upending the logic that supports the discounts. For now, however, this approach makes sense financially and environmentally, proponents say.

Massachusetts was the first state to require all of its major electric utilities to provide seasonal heat pump rates, knocking from 4.3 cents to 7.5 cents per kilowatt-hour off the standard winter price; during the summer, rates are the same for those who own heat pumps and those who don’t. Customers who received heat pump incentives from Mass Save, the state energy efficiency program, were automatically enrolled.

The state’s Department of Energy Resources and climate advocates would like to see even more of a discount. The energy department has asked utility regulators to approve a seasonal rate that would save heat pump owners from 12 to 17 cents per kilowatt-hour. At that level, houses switching to heat pumps from other sources would save a median of $687 each winter, according to Switchbox’s 2025 analysis.

“The current rates are still overcollecting from heat pump customers,” Velez said. ​“They didn’t reduce the rate enough.”

The case is still pending before regulators, who have said they intend to decide the matter in time for any potential new rates to take effect for the 2026–2027 heating season.

The action on heat pump rates is at an earlier stage in New York. There are no proposals before regulators yet, but Switchbox is attempting to jump-start the conversation with its new report on the potential for the state. That analysis finds that 72% of current natural gas customers would save money by switching to a heat pump if discounted rates were adopted, up from 27% under current rates. The organization plans to file the report as part of New York’s ​“Grid of the Future” proceedings, in which utility regulators are considering policies to prepare the grid for growing demand.

Rhode Island could be following in the footsteps of its northern neighbors as soon as this year. A climate action plan released in December identifies ​“ambitious adoption of heat pumps” as a key strategy in reaching the state’s emissions targets, a goal that dovetails nicely with heat pump rates, said James Rhodes, clean buildings director for Conservation Law Foundation, an environmental advocacy organization.

“If that’s our strategy, the first thing you have to do is make that an affordable decision,” he said. ​“The cost to serve a heat pump customer should not be multiple times higher than the cost to serve a non–heat pump customer.”

Rhodes had been tracking the progress of Massachusetts’ rates and promoting the idea to Rhode Island energy officials and the state’s major utility, Rhode Island Energy, but getting little traction. So the foundation intervened in Rhode Island Energy’s ongoing rate case, and earlier this month filed a proposal that would reduce delivery rates for heat pump owners by 5.8 cents per kilowatt-hour, according to analysis by Switchbox. Customers without heat pumps would see a rate increase of 0.29 cents per kilowatt-hour — for an average of $1.57 a month — to ensure the change is revenue-neutral for the utility.

A decision should be made in the case by the end of August, Rhodes said.

“This seems like a slam dunk,” he said. ​“I like to think this is going to be an inflection point, and I hope it is for the positive.”

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Sarah Shemkus

is a reporter at Canary Media who is based in Gloucester, Massachusetts, and covers New England.