On July 1 the Senate passed a major energy affordability bill, which is projected to save constituents more than $14 billion over a decade.
Before the debate began, I wrote a blog summarizing the bill and the work my team and I were engaged in to file amendments, adding policies to an already transformative base bill. During debate, I took a moment to film a video explaining where the $14 billion in savings are achieved.
Ultimately, of the nine amendments I filed, three were adopted:
#1 – Protect Constituents From Unreasonable Utility Profits
Utilities in Massachusetts are allowed to earn profit rates (return on equity, or ROE) that are far higher than what national research says is necessary — sometimes 9.5–10%, when the real cost of attracting investment is closer to 7.9%. That small difference adds up fast and means hundreds of millions of dollars in extra costs on constituents’ utility bills.
This amendment directs the Department of Public Utilities to investigate these excessive profit margins and crack down on any ROE levels that overcharge ratepayers.
#3 – Facilitate Energy Siting in Municipalities
The 2024 energy siting and permitting law gives municipalities 12 months to decide on applications for small clean‑energy facilities and requires one Local Government Representative to manage that process. But many small towns don’t have staff to take on that role whenever an application comes in.
This amendment lets municipalities use the existing 53G consultant process — where the applicant pays a consultant for the necessary reviews and technical work. When a town hires a 53G consultant, the 12‑month timeline wouldn’t start until the contract is signed, ensuring municipalities have the capacity they need to do the job right.
#4 – Require transmission companies to participate in ISO-NE
This amendment would require all transmission companies in Massachusetts to participate in ISO‑New England. That change would let the Attorney General petition the Federal Energy Regulatory Commission (FERC) to eliminate the extra 0.5% “RTO adder” these companies currently collect just for participating voluntarily.
The adder was created about 20 years ago to encourage formation of regional transmission organizations, but ISO‑NE membership is now essential for transmission companies. The RTO adder has effectively become a needless bonus for utilities, with no benefit to ratepayers.
Ending the RTO adder will save Massachusetts consumers more than $10 million every year.
A full summary of the bill passed by the Senate is below. The House previously passed its own energy affordability legislation, which will need to be reconciled with the Senate’s bill before a final bill can be sent to the Governor to be signed into law.
The House previously passed its own energy affordability bill, so a conference committee will be established to negotiate the differences between the House and Senate versions.
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The legislation targets the biggest cost drivers that Massachusetts residents face on their monthly bills, including fees, surcharges, and rate adjustments.
Cutting Out the Intermediary on Energy Purchasing — Up to $420 Million in Savings
Right now, utility companies act as intermediaries when Massachusetts buys clean energy, and they collect a fee for that role. This bill lets the state negotiate those contracts directly, cutting out the fee and saving ratepayers up to $420 million.
Evening Out Seasonal Price Spikes — $780 Million in Savings
Energy prices for customers on basic service contracts are currently locked in every six months, which can cause sudden jumps in what residents pay. The bill gives regulators more flexibility in how and when prices are set, which is expected to save ratepayers $780 million
Reviewing Hidden Charges That Spike During Peak Months — $750 Million in Savings
Bills often include separate ‘reconciling charges’ that aren’t reviewed consistently. The bill requires regulators to reform these charges, particularly ones that spike during high-demand months, which will save residents an estimated $750 million.
Investigating Markups on Electric Bills — Up to $1 Billion in Savings
A new state investigation will examine whether customers have been overcharged when utilities didn’t actively shop for the best electricity rates. Between 2015 and 2024, Massachusetts customers may have paid an estimated $3.4 billion more than necessary. This investigation could lead to savings of up to $1 billion, or roughly $12 a month for a typical household.
Cracking Down on Predatory Energy Suppliers — More Than $650 Million in Savings
So-called ‘competitive’ energy suppliers have used aggressive sales tactics to lure customers in with low introductory rates only to sharply raise prices later. Over the past decade, customers who switched to these suppliers paid an estimated $738.7 million more than if they’d simply stayed with their regular utility. The bill strengthens consumer protections and enforcement, to save ratepayers a projected $650 million.
Helping Utilities Pay Down Debt Without Passing It to Customers — Up to $7.1 Billion in Savings
The bill allows utility companies to finance certain costs, like those from storm recovery and grid upgrades, at lower interest rates instead of borrowing at higher costs and passing those costs on to residents. This alone could save ratepayers up to $7.1 billion over 10 years.
Streamlining the Gas Pipe Repair Program — $1.46 Billion in Savings
The Gas System Enhancement Plan, a program meant to incentivize utilities to fix aging, leak-prone gas pipes, has ballooned in cost, making up an estimated eight to 11 per cent of a typical gas bill, while allowing companies to skip standard cost reviews. The bill narrows the program to focus only on pipes that actually need repair, phases it out by 2030, and restores normal oversight, saving ratepayers an estimated $1.46 billion.
Making Solar and Clean Energy More Affordable Up Front — $540 Million in Savings
For homeowners who want to install solar panels or battery storage but can’t afford the upfront cost, the bill creates a way to finance that equipment through their utility bill over time. By doing so, it potentially saves consumers $540 million as more households take advantage of it.
Cutting Red Tape in Energy Planning — $1.7 Billion in Savings
Utility companies currently plan infrastructure projects through multiple, disconnected approval processes, which can overwhelm regulators and often lead to duplicated or unnecessary spending. The bill requires a single, streamlined planning process, helping avoid wasteful projects and saving residents an estimated $1.7 billion.
Strengthening the Mass Save Program
The legislation strengthens the Mass Save program, which helps residents weatherize homes and upgrade to energy-efficient equipment, by making it more accountable and effective. The bill caps the program’s administrative spending, removes a requirement that utility companies automatically receive bonus payments, and creates a new oversight board to keep the program focused on results.
Protecting Massachusetts’ Climate Leadership
The bill preserves the state’s commitment to clean energy by adjusting the pace of certain renewable energy purchasing requirements to reflect federal setbacks to offshore wind, supporting renewable natural gas made from food and organic waste, and allowing outside investment in upgrading the electric grid to handle growing demand.
Full details of the legislation are available in a fact sheet and bill text.
