Massachusetts Gov. Maura Healey announced a plan on Monday to save ratepayers in Massachusetts up to $5.8 billion on their energy bills in the next five years, with immediate relief in the form of a $50 credit for residential customers on electricity bills in April.
The move comes after consumers saw skyrocketing gas bills this winter. The $50 credit is set to go to National Grid, Eversource, and Unitil customers. In addition to the credit, which will cost the state $125 million and come out of alternative compliance payment funds previously collected to support clean energy, the administration has worked with utility companies to eliminate charges relating to the state’s solar carve out programs – which have met their goals of installing 1,600 megawatts of solar technology – over the next five years.
The Department of Public Utilities (DPU) currently offers discount rates to low-income customers but is now also working on establishing guidelines for a discount rate for moderate-income customers, and tiered discount rates for low-income customers who may be able to take advantage of deeper savings. The DPU is also working on reducing costs for customers by instituting a lower electricity rate for those who have adopted heat pumps.
There are several additional policies that the administration is pursuing to get to the $5.8 billion in savings like auto-enrollment in utility discount rates, energy-saving programs like the home energy audit and weatherization program, and opportunities to go solar. The breakdown is posted here.
“It’s never been more important to advance new programs that bring down costs,” said Energy and Environmental Affairs Secretary Rebecca Tepper, during a press conference announcing the new plan. “This winter has been a tough winter. When the weather is cold, we use more energy, and our bills go up, so we need to think about other ways that we might be able to save money, and our residents can’t really afford to wait on that.”
In the outline of the governor’s plan, she makes a commitment to filing legislation that will “make bills more transparent and easier to understand, smooth energy costs by entering into longer, more fixed price contracts, reduce the number of costs that are recovered based on how much you use, provide more options for customers to use energy when it’s the cheapest, and limit how often rates change and by how much.”
Last fall, the DPU approved gas rate increases of up to 30 percent, which were mainly tied to gas pipeline infrastructure maintenance projects and the state’s Mass Save energy efficiency program, which submits a new budget every three years.
Last month, lawmakers and the governor called on the DPU to lower bills by at least five percent for ratepayers as an unusually cold winter caused gas bills to balloon. National Grid and Eversource, the state’s largest utilities, responded by lowering residential bills by 10 percent during the months of March and April, though companies plan to recoup that money by adding it to consumers’ bills during the warmer months when heating bills are much lower.
The DPU also cut the proposed budget for Mass Save, which is funded through a surcharge on consumers bills, by $500 million as a way of lowering ratepayers’ bills, a move that climate activists called “short-sighted.” Since 2013, when Mass Save launched, the program has provided $31 billion in total benefits to customers.
Healey defended Mass Save at the press conference when asked whether the program’s funding mechanism should be changed. Without Mass Save, “electricity bills would be 14 percent higher than what they are,” she said.
Healey’s plan to save consumers money does not cut funding for climate initiatives, and she is making green, domestic energy a key part of making energy more affordable. “Increasing supplies of stable clean energy through local solar, as well as wind and hydro from Maine and Canada, are estimated to yield net benefits to electric customers of nearly $1.2 billion by 2030,” according to the plan.
Advocates for clean energy, energy affordability, and environmental justice applauded the administration’s initial efforts to lower costs as a good first step but cautioned that structural issues that keep rates high will need to be addressed.
“There needs to be a recognition that there’s no quick fix for any of these issues,” said Connie Martin, director of energy programming at a Lowell-based nonprofit called Community Teamwork, which provides resources for low-income residents. “Being able to announce a $50 reduction is huge, and we’ll see an immediate impact on families. But longer term, committing to make these changes over time and really starting to dig into the fees and the add-ons – that’s really where the savings and improvements are going to happen.”
Larry Chretien, executive director of the nonprofit Green Energy Consumers Alliance, said the Healey administration is on the right track. “This move will definitely provide relief,” he said. “Energy affordability and clean energy have been on the minds of policymakers at the state level all along, but I think they now are just doubling down on their commitment to both.”
This article first appeared on CommonWealth Beacon and is republished here under a Creative Commons license.
