Fairer Rates for Heat Pumps
The problem
Heat pumps can help Maryland households cut pollution and heat homes more efficiently, but current electric rates can make winter heating with heat pumps more expensive than it should be.
When a household installs a heat pump, it uses more electricity in winter. Customers should pay for that electricity, but current electric delivery rates overcharge heat pump users for grid costs, even when the grid already has extra room. In Maryland, the grid is largely built to meet peak demand in summer, so winter heat pump use often relies on spare capacity that already exists.
The Solution
Maryland can address this through fairer rates for heat pumps.
Fairer heat pump rates would keep the standard supply charge per kWh while avoiding higher delivery charges when heat pump users are relying on existing grid capacity. That would make bills fairer for heat pump households while having little impact on other customers.
Other states pioneering fairer electric rates
Massachusetts has already adopted moderately fairer electric rates. Starting November 1, 2025, the state’s major investor-owned utilities began offering lower winter rates for heat pump households, with estimated savings of $70 to $140 per month off the average winter bill for households. Regulators are considering even more fair rates that would provide more than $600 in savings each winter for 4 out of 5 households.