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on state energy policy.
Diagnosis: utilities are overcharging HP customers for the grid
Problem: when gas homes get HPs, energy bills usually go up
Impact: heat pumps become cheapest way to heat most NY homes
Solution: charge HP customers less using heat pump rate
energy use
energy bills-56%+20%
Why is this overcharging?
Most of the new load from heat pumps occurs in winter.
Winter to summer peak in... PJM ComEd Zone: 65-70%, MISO LRZ 4: 80%
Why is this overcharging?
Most of the new load from heat pumps occurs in winter.
'26 PJM load forecast: winter peak does not cross summer in ComEd Zone by 2045
This incremental load doesn't trigger grid upgrades. It uses spare capacity.
Why do overpayments create a cross-subsidy to everyone else?
What if we fixed this overcharge?
Natural Gas
All Fuels
Energy
Burdens
"LMI electrification could raise energy burdens!"
With discounts + HP rate, it could significantly cut energy burdens.
What is the financial impact?
New HP customers: don't overpay to begin with
What is the financial impact?
Existing customers: small subsidy removed
New HP customers: don't overpay to begin with
Fair rates can be combined with those that promote efficiency: seasonal + TOU rates
These rates tackle fairness:
customer revenue = cost-of-service.
Many ways to do this: higher fixed charge for HP customers, etc.
Virtue of simple seasonal charge to achieve fairness: can be retroactively applied.
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Heat Pump Rates in NY
By Juan-Pablo Velez
