Designing Better Rates for Heat Pump Customers

The document analyzes four case studies of 'electrification-friendly' electric rates in Massachusetts, Minnesota, Maine, and Maryland. It finds that rates specifically designed for heat pump users or those with significant seasonal differentiation provide the greatest bill savings. The analysis emphasizes that automatic enrollment strategies are more effective at reaching customers than optional opt-in rates.

• Eversource Massachusetts implemented a heat pump customer sub-class that lowers winter per-kWh distribution and transmission charges by nearly 60% to reflect that these customers primarily add demand in winter, resulting in an average annual bill improvement of $770.
• Xcel Minnesota provides an electric space heating rate for customers using electricity as their primary heating system, offering a lower winter per-kWh energy charge which results in an average annual bill improvement of $689.
• Pepco Maryland utilizes a standard residential rate with winter per-kWh delivery rates approximately half of the summer rates, providing a modest average annual bill improvement of $87 for electrified heating customers.
• Central Maine Power (CMP) offers an optional electric technology rate that increases the monthly fixed charge from $30 to $40 but lowers the year-round per-kWh charge by nearly 30%, leading to an average annual bill improvement of $212.
• Automatic enrollment strategies, such as those used by Eversource Massachusetts and Xcel Minnesota for rebate recipients, are more effective at delivering benefits than opt-in rates, which are used by only a minority of heat pump users in the Central Maine Power territory.

APA

RMI (2026). Designing Better Rates for Heat Pump Customers. https://rmi.org/resources/designing-better-rates-for-heat-pump-customers/

Chicago

RMI. Designing Better Rates for Heat Pump Customers. 2026. https://rmi.org/resources/designing-better-rates-for-heat-pump-customers/.

Wikipedia

{{cite report |author=RMI |title=Designing Better Rates for Heat Pump Customers |date=17 June 2026 |url=https://rmi.org/resources/designing-better-rates-for-heat-pump-customers/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2026designing, author = {{RMI}}, title = {{Designing Better Rates for Heat Pump Customers}}, institution = {RMI}, year = {2026}, month = jun, url = {https://rmi.org/resources/designing-better-rates-for-heat-pump-customers/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }