Massachusetts utility bills are climbing. Here are four possible fixes.

Boston Globe

23-05-2025

The largest parts of Healey's plan focused on stretching out financing of charges on bills and auditing utilities to ensure costs for items such as lobbying are not included on bills.
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There are several other options to address the rising costs — including how we pay for the Mass Save efficiency program, low-income energy subsidies, and infrastructure upgrades. And, of course, there's the eternal question of how much utilities should be able to profit from their services. While Healey's bill touches on some of these areas, industry observers say there's much more that could be done.
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'There's no easy button to push,' said John Odell, Worcester's chief of sustainability who has worked in and around the utility business for decades. 'You need to streamline where you can, but also look at multiple avenues to manage costs and lower folks' bills. It's not going to be just do this one thing and you solve the problem. It'll be a whole bunch of things.'
No matter how the state chooses to regulate utilities, Massachusetts faces several nearly intractable challenges that push up energy prices. Consumers here use less electricity per capita than other states where many more homes use electricity for winter heating. That means the fixed cost of building and maintaining the electrical grid is spread over less total usage, driving up the per kilowatt charge needed to cover those costs. And the state has limited access to electric transmission lines and gas pipelines, which drives up prices when supplies get tight.
Mass Save
Mass Save, established by the Legislature in 2008 to reduce energy usage and climate-related emissions by making buildings more energy efficient, has been one factor pushing up prices.
The program pays for free home energy assessments and subsidized home improvements such as added insulation, as well as conversions from gas or oil boilers to heat pumps. The program is mainly paid for by charges on utility bills, amounting to almost 10 percent of a typical electric bill and 15 to 20 percent on gas bills.
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Spending has ballooned from $356 million in 2010, when the program started, to almost $1.5 billion in the first three quarters of 2024. In February, Massachusetts utility regulators
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Mass Save proponents note that consumers who make their homes more efficient save money, by using less gas or electricity. And all of the savings together help lower demand for gas and electricity, reducing overall prices for everyone. 'The cheapest kilowatt hour is the one that you don't consume,' said Doug Horton, Eversource's vice president of distribution rates and regulatory requirements.
Under the governor's plan, utilities could issue bonds to stretch out
each year's bill for Mass Save and a few other programs over 20 years, instead of paying all in one year. Customers would see a much smaller charge on monthly bills, although the added interest cost from the bonds means they'd be paying more over the long run.
Hessann Farooqi, executive director of the nonprofit Boston Climate Action Network, would prefer a simpler solution: use general tax revenue instead of charges on utility bills.
'We don't need to overthink this,' Farooqi said. 'We know that tax revenue is a key way to finance anything that's important in the state.'
Low-income subsidies
There's little debate that Massachusetts should help lower-income households struggling with high energy bills, but the cost rises as other costs on the bill increase. Gas customers mainly get help from the federal Home Energy Assistance Program, funded from the federal budget (though President Trump has
Low-income electric customers qualify for a discounted rate, which is covered by a charge on the bills of higher-income customers. The program doesn't get its own line item on the bill but is included in the general
charge for distributing power. In March, the governor
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If utilities did not provide a lower rate for low-income households, those customers might run up bills at higher rates they would be unable to pay. All of the remaining customers would have to cover those losses, Eversource's Horton said. 'We're trying to meet customers where they are, providing a critical service, so they're able to afford the bills we're sending,' he said.
Infrastructure
Another factor contributing to higher bills is a charge to pay for modernizing the electric grid to handle higher loads as more people switch to electric heat pumps and electric vehicles.
On the gas side, legislators created a program in 2014 called the Gas System Enhancement Plan allowing utilities to charge customers to pay for fixing aging, leaky pipes. With inflation pushing up construction costs and more leaks occurring, the charges have grown to represent more than 10 percent of gas bills.
So last month, regulators moved to reduce the charges by lowering annual spending limits and removing some interest payments, as well as giving the utilities incentives to deal with leaks without construction (such as by taking sections of pipe out of service). The changes could lower the charges on bills by almost one-fifth, state officials said.
'If policymakers really want to improve affordability, there's got to be much more focus on driving down... capital spending on the distribution system,' said Dorie Seavey, senior research scientist at Groundwork Data, who has analyzed systems in Massachusetts, Pennsylvania, and Illinois.
Profits
A final factor in bills that lawmakers could influence, though one the governor did not take on directly, is the profit margin built in for utilities. Known as the return on equity, the calculation is hotly debated when the companies seek approval for their rates every few years.
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For example, in National Grid's most recent electric rate case, decided last year, the state DPU approved a profit rate of 9.35 percent, less than the 10.5 percent National Grid wanted but higher than the 9 percent rate the attorney general and some consumer advocates argued was more appropriate.
The profit margin adds to the cost of any infrastructure projects that regulators approve, noted Kyle Murray, director of state program implementation at Acadia Center, a nonprofit focused on clean energy policy.
'Return on equity is certainly something to look at,' said Murray, who has made filings asking regulators to lower the profit rate. 'They're making profits off of every additional pipeline. Every pipe that gets put in the ground, that is profit for them."
But Connecticut may stand as a warning against reducing the rate of return too much. After legislators changed the rate calculation formula, regulators there lowered several components of utility returns, which in part caused Standard & Poor's to
The utilities must be able to raise capital by borrowing money or selling stock in order to expand and update their networks, Eversource's Horton said.
'We have to be able to pay back our debt lenders and equity investors,' he said. 'There's a lot of focus, as there should be, on the amount of equity return that is built into rates, and that is a key focus of regulation.'
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Aaron Pressman can be reached at