Con Edison Heat Pump Customers Missing Out on $131 Million in Bill Savings

NEW YORK, NY – July 9, 2025 – A coalition of leading advocacy groups—Rewiring America, Environmental Defense Fund, and Alliance for a Green Economy—recently unveiled a proposal to improve energy affordability and access for Con Edison customers with heat pumps through new electric rate offerings. Submitted in the Con Edison rate case, the collective proposals (see links below) show that despite more than 43,000 heat pump installations, fewer than 1% of heat pump adopters are enrolled in the utility rate designed to help them save—leaving $131 million in bill savings unrealized.

“New Yorkers are stepping up to electrify their homes, but outdated electricity pricing is holding them back,” stated Alex Lopez, Senior Manager of Regulatory Policy at Rewiring America. “We’re leaving real money on the table for households, especially low-income families, and missing an opportunity to unlock grid flexibility.” 

In addition to climate, air quality, comfort, and public health benefits, heat pumps can significantly reduce monthly electricity bills—especially when coupled with rate structures that reflect the benefits these efficient appliances bring to our energy system. Heat pumps also enhance grid flexibility by optimizing energy use during off-peak periods, allowing homes to use power when it’s less busy and overall demand for electricity is lower. Despite Con Edison completing 43,852 heat pump installations through its Clean Heat program, a mere 425 heat pump customers are enrolled in the designated heat pump rate. This underutilization stems from a lack of effective customer education and confusing electricity pricing built around unfamiliar demand-based charges.

Modeling shows a clear path to substantial savings: simpler, more transparent electric rates could save typical customers $439 to $509 annually. If all Clean Heat participants switched to these improved rates, up to $131 million in customer bill savings could be unlocked over the 2026-2028 rate period. This would also significantly reduce the energy burden for low-income families by around 28%, lowering their annual electricity bills from 5.6% to 4.6% of household income. This represents a crucial step towards energy equity given the median energy burden for African American households in New York is 43% higher than that of white, non-Hispanic households.

The proposed solution calls for:

• Two Easy-to-Understand Rates: Both options give customers more predictability and control over energy costs:

  1. Seasonal Flat Rate: Allows customers to save on home heating with lower winter rates and a familiar price per kilowatt-hour.
  2. Smarter Time-of-Use Rate: Makes it easier for customers to shift usage and save via winter discounts and a shorter on-peak period.

  Both rates are revenue-neutral and grounded in cost causation, meaning they won’t shift costs onto non-heat pump customers. 

• Smarter Rate Enablement Tools: Empowers customers to choose the best rate with personalized bill comparisons backed by real household energy data.
• Integrated Rate Education: Makes rate selection a core part of Clean Heat and other electrification efforts by equipping installers and customer service representatives to offer personalized rate guidance at the point of installation.

"Con Edison's current electric rates misalign with heat pump usage, charging heat pump users more and hindering climate progress," said Erin Murphy, Environmental Defense Fund’s Director & Sr. Attorney, Clean Air & Energy Markets. "Our proposed rates can facilitate widespread heat pump adoption with affordable monthly bills, and achievement of New York's decarbonization goals."

New York’s landmark Climate Leadership and Community Protection Act mandates a 40% reduction in greenhouse gas emissions by 2030 and net-zero emissions by 2050. Buildings currently account for over 30% of statewide emissions—primarily from fossil fuel-based heating. Transitioning to efficient, electric heat pumps is one of the fastest and most scalable solutions—and New York must install 1 to 2 million residential heat pumps by 2030 to meet its targets.

But under the current default rate design, many households face steep winter electric bills when switching to heat pumps—undermining adoption. The coalition urges the Public Service Commission to swiftly approve these critical reforms, setting a precedent for customer-centric rate design and ensuring the promise of clean energy translates into tangible savings for New Yorkers. 

"Our proposal outlines a clear strategy for streamlining Con Edison's rate structures, enabling heat pump owners to fully realize substantial cost savings and significantly contributing to New York's clean energy transition,” said Jessica Azulay, Executive Director of Alliance for a Green Economy.

Proposals

• Testimony of Alex Lopez, Rewiring America, filed by AGREE: Explains the need for improved customer outreach and education to better access rate options.
• Testimony of Ron Nelson, Current Energy Group, filed by EDF: Presents two proposed rates to make monthly bills more consistent and affordable for heat pump customers.
• The testimonies are part of Case 25-E-0072 before the New York Public Service Commission, which will determine Con Edison’s electric rates for the coming years.