BOSTON — The state's largest utilities are testing geothermal systems to determine if the renewable energy source could help reduce the state's reliance on natural gas and oil to heat and cool Massachusetts homes.

Eversource is gearing up to test geothermal heating and cooling systems at several sites around the state. One pilot project would be located in the Merrimack Valley, where a natural gas disaster in 2018 killed a teenager, injured dozens and damaged hundreds of homes.

A $56 million settlement between state regulators and Columbia Gas of Massachusetts, which was bought by Eversource, included $4 million for a geothermal test project.

Meanwhile, National Grid has asked the Department of Public Utilities for permission to begin a five-year, $15.6 million pilot project testing geothermal heating and cooling in a number of homes and buildings.

Geothermal systems use underground wells and pumps installed inside a building to pull the Earth's heat out of the ground to warm buildings in winter, or to send heat from buildings into the ground in the summer.

But the systems don't come cheap. The U.S. Department of Energy estimates a homeowner will pay $10,000 to $30,000 to install one.

National Grid said it believes one way to reduce costs is by using a loop system that ties in multiple homes or buildings.

"This should lower the cost of the geothermal service, further accelerating the adoption of this technology," Owen Brady-Traczyk, who manages National Grid's Future of Heat program, said in testimony to DPU commissioners. "The company intends to test this hypothesis and, if proven to be true, begin to determine the optimal ways to deploy shared loop systems."

National Grid has asked state regulators for the authority to charge more than 900,000 gas customers a fee to pay for the pilot project. The charge would add $3 to $4 to a customer's monthly bills, depending on household income and whether they are residential or commercial customers.

The company also wants to charge participating customers a monthly fee of $150 to $225, depending on whether they are residential or commercial.

In testimony, company officials suggested there would be a savings for participants because they wouldn't pay monthly gas or oil charges.

Massachusetts has committed to an ambitious goal of reducing greenhouse gas emissions to 1990 levels over the next 30 years. A climate change bill signed by Gov. Charlie Baker last month requires the state to meet incremental reductions every five years to reach the goal.

"Achieving these emission targets will require significant changes in the way energy is produced, distributed and consumed," Brady-Traczyk said.

Environmental groups say while the state is pursuing solar, wind power and other renewable energies, geothermal needs to be a part of the mix.

"We shouldn't be installing new gas infrastructure when we know we're going to be decarbonizing by 2050," said Audrey Schulman, founder and co-executive director of HEET, a nonprofit that promotes geothermal energy. "We need to be aggressive about pursuing non-fossil fuel sources of energy."

The group released a study two years ago showing that geothermal energy could heat and cool all of the homes and buildings in the state.

State regulators will hold live-streamed public hearings on National Grid's geothermal project next month.

Christian M. Wade covers the Massachusetts Statehouse for North of Boston Media Group’s newspapers and websites. Email him at cwade@cnhinews.com

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