Industry analysis of gas heat pumps seriously flawed, People’s Counsel tells Public Service Commission
BALTIMORE – A study commissioned by Washington Gas significantly overstates the greenhouse gas reduction benefits of gas heat pumps relative to electric heat pumps, the Office of People’s Counsel said in a filing today with the Public Service Commission. When the study’s errors are corrected, it offers no support for continuation of the utility’s gas heat pump pilot program, OPC’s filing said. Consequently, OPC’s filing requests that the Commission end the pilot.
“Washington Gas paints a much rosier picture of the greenhouse gas reduction potential of gas heat pumps than the facts warrant,” said People’s Counsel David S. Lapp. “In fact, electric heat pumps have far more potential to reduce CO2 emissions in Maryland than gas heat pumps.”
OPC’s filing was made in response to Washington Gas’s January filing of a “preliminary market assessment” of gas heat pump technology following the Commission’s approval in 2021 of a pilot program for gas heat pumps. The utility’s assessment, prepared by the industry group GTI Energy, argues that gas heat pumps have “the potential to yield significantly higher efficiencies” compared to electric heat pumps. That argument, however, is based on two key erroneous assumptions, OPC’s analysis pointed out:
- WGL used the wrong “coefficient of performance”—an industry measure of heat pump efficiency—for the electric heat pump the study compared to a gas heat pump; and
- WGL overstated electric heat pump emissions by assuming the electricity powering the electric heat pump is all fossil-fuel generation, when Maryland’s electricity policies require an increasingly lower-carbon generation mix.
Correcting for these deficiencies, OPC explained, results in calculations showing that the electric heat pump Washington Gas analyzed has a carbon intensity that is 48 percent lower than the carbon intensity of the gas heat pump it analyzed.
Washington Gas’s filing contains little information about gas heat pump costs—except to acknowledge they have a “higher” incremental cost. “Washington Gas’s study concludes that gas heat pumps have ‘promising potential,’” Lapp said. “But its study entirely fails to support the notion that gas heat pumps will ever be cost-competitive with electric heat pumps.”
OPC’s filing, based on a technical review by the consulting firm Synapse Energy Economics, also explained that gas heat pumps today are not readily available for residential customers, while electric heat pumps are widely available with rapidly developing technological improvements, making them capable of performing at high levels of efficiency at extremely low temperatures. Moreover, many electric heat pumps qualify for significant tax credits under the 2022 Inflation Reduction Act because of their high efficiency.
OPC’s filing follows its request earlier this month that the Commission open a comprehensive proceeding on gas utility operations, for long-term planning and more immediate priority actions. “The Commission should not handle important issues that concern the future use of gas in a piecemeal, case-by-case fashion,” Lapp said. “That approach fails to account for the long-term interests of utility customers in avoiding investments in fossil-fuel technologies that will become cost-prohibitive.”
The Maryland Office of People’s Counsel is an independent state agency that represents Maryland’s residential consumers of electric, natural gas, telecommunications, private water and certain transportation matters before the Public Service Commission, federal regulatory agencies and the courts.
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