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The approval by officials at the state Department of Public Utilities allows National Grid, the Northeast’s largest provider of natural gas, to start a five-year demonstration project of the technology. The state will still have to approve a detailed project plan, and it was unclear when the company hoped to break ground or where it expects to build the project.
“This is an important step toward mitigating the impacts of climate change, helping further reduce greenhouse gas emissions, and offering our customers affordable heating options,” said Christine Milligan, a spokeswoman for National Grid.
State officials said the project would cost nearly $16 million and result in residential customers seeing an increase in their utility bills between 24 cents and $3.48 per year, while low-income customers would experience a smaller increase.
The goal of National Grid’s project, state officials said, is to convert natural gas customers to use of geothermal energy in areas that would allow the company to avoid the expensive replacement of leak-prone pipes.
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Eversource’s demonstration project, which was approved by regulators more than a year ago, will address the challenges of installing a geothermal system in an urban environment, with energy provided to both homes and businesses.
State officials said no other geothermal projects are being considered.
Officials at Eversource called the state’s approval of their competitor’s project “great news.”
Eversource’s project, which is expected to be launched late next year, will cost more than $10 million over three years, officials there said.
“We believe both pilots are valuable in exploring the future role of gas in the Commonwealth as we examine all ways to reach carbon neutrality,” said Caroline Pretyman, a spokeswoman for Eversource.
Environmental advocates applauded the state’s approval of the project.
“It’s about time gas utilities acknowledge the damage caused by burning fuels in our homes,” said Caitlin Peale Sloan, vice president of the Conservation Law Foundation in Boston. “The fact that the industry is testing out new approaches to heating and cooling is definitely a step forward. Now the state needs to do its part and keep moving us toward a gas-free future.”
She and others urged the state to help more lower-income residents make the switch from using fossil fuels. They also called on the state to invest more in other technology that can heat and cool homes without fossil fuels, such as air source heat pumps, which draws on outside air to control temperatures.
“The big gas utilities still haven’t acknowledged the reality that in order to prevent the worst impacts of climate change, we must plan for a full transition off of fossil fuels, and that means the retirement of our gas infrastructure,” said Ben Hellerstein, state director of Environment Massachusetts.
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David Abel can be reached at david.abel@globe.com. Follow him on Twitter @davabel.