First of all, congratulations to you for finding SOMETHING available for the days surrounding New Years Eve. This is often a difficult task for Madrid.
Hopefully you'll get some feedback from people who have stayed there recently. However, I know that
Hostal Lopez was completely renovated in the last 2 years.
Heating rooms only during certain hours has long been a common practice among "hostales" but I'm not sure that's still the case these years. I would imagine so.
You might even consider sending them a quick email with their question. I'm sure they'd let you know the status.
Good luck and enjoy your visit to Spain!
Saludos, MadridMan
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