Press Release: 5/21/2025

Mass. Gov. Healey Introduces Energy Affordability Bill

 

Date: May 20, 2025

Published in: RTO Insider

Author: Jon Lamson

Massachusetts Gov. Maura Healey (D) has filed a major energy bill that her administration says would save ratepayers $10 billion over the next decade through major changes to clean energy procurement, decarbonization financing, net metering, competitive electricity supply and utility accountability.

The bill introduced by the Healey administration will likely serve as a starting point for negotiations among Massachusetts lawmakers over the coming months.

High natural gas prices over the past winter have led to increased political pressure on lawmakers to provide short-term rate relief. (See Massachusetts Lawmakers Focusing on Energy Affordability in 2025.) The coldest winter in a decade, combined with increased supply and distribution charges, caused average bills to increase by about 18% compared to the previous winter.

The state also faces long-term cost pressures associated with the clean energy transition and will need major investments in electrification, grid infrastructure and clean energy generation to meet its 2030 climate target. The affordability bill, filed with the House of Representatives on May 13, aims to address these issues through a myriad of changes to state energy policy.

“The legislation takes a comprehensive approach to driving down rising energy costs, making our state more energy independent, sparking innovation in the energy sector, and improving accountability and consumer protection standards,” Healey wrote in a letter to legislators accompanying the bill.

The bill has received positive reactions from multiple influential organizations in the state representing labor, power generation, real estate and environmental interests. However, it remains early in the legislative process, and advocates stressed that there is plenty of work remaining to refine the bill and better understand how it would affect energy costs and clean energy development.

“I like the direction,” said Sen. Mike Barrett (D), co-chair of the Legislature’s Joint Committee on Telecommunications, Utilities and Energy. “The Legislature always wants to learn a whole bunch about the details, but the thrust of the bill is right on. … There are no obvious red flags.”

“I give the administration a lot of credit for looking at this comprehensively,” said Casey Bowers, vice president of government affairs at the Environmental League of Massachusetts.

“We see this as a good start,” said Kat Burnham, senior principal at Advanced Energy United. “We look forward to working with the administration to iron out some potential wrinkles.”

New Renewable Generation

The bill would significantly overhaul the state’s process for procuring clean energy, authorizing the Department of Energy Resources to directly procure resources.

Currently, procurements are conducted through the state’s electric distribution companies, with the DOER negotiating the contracts.

The administration said that allowing the DOER to directly procure energy would eliminate fees charged by the utilities for serving as the contracting agent. It estimated that avoiding these fees could save ratepayers “billions in costs over the coming decades.”

Dan Dolan, president of the New England Power Generators Association, said the group is “closely reviewing the potential significant increase in the commonwealth’s authority regarding electricity resource planning and contracting,” adding that “new and existing power generation will be necessary to meet growing electric demand reliably and at competitive prices.”

With an eye to the development of small modular nuclear reactors, the bill would also repeal a 1982 law requiring a statewide ballot initiative to approve any new nuclear facilities.

On interconnection, the bill would direct EDCs to develop a “flexible interconnection program designed to enable the efficient connection of new customer loads and to maximize the deployment of distributed energy resources, while minimizing associated electric infrastructure costs.” The new processes would allow new load and DERs connecting to the distribution system to agree to face curtailment in certain circumstances, allowing them to reduce interconnection costs and delays.

The administration has also proposed lowering the value of net metering credits for new large resources, estimating that this would save ratepayers $380 million over 10 years. This proposal could face opposition from solar developers, and some in the industry have already expressed concern that this would make some projects non-viable.

The bill would also phase out the state’s Alternative Portfolio Standard (APS), which incentivizes alternative energy resources including combined heat and power plants, biomass generation units and fuel cells. The administration said the APS “costs ratepayers up to $60 million per year and is set to increase.”

Larry Chretien, executive director of the Green Energy Consumers Alliance, said the APS “never really made sense, and really doesn’t now.” He said the state should focus on incentivizing heat pumps and Class I renewables, which include wind, solar, hydropower, geothermal and some biomass resources.

Competitive Electricity Supply

The legislation would also add consumer protection regulations to the residential electric supply market. It includes proposals to ban automatic renewals and cancellation fees, limit changes to rates, prevent suppliers from selling clean energy products that do not qualify for the state’s clean electricity standards, and increase transparency and oversight requirements.

“The language proposed by the administration is good and tough,” said Sen. Barrett, who has previously supported a full ban on direct-to-consumer electricity supply vendors.

A potential ban on retail suppliers gained some traction during the previous legislative session, with support from the Attorney General’s Office, the city of Boston, the Healey administration and the Senate, but it was ultimately left out of an omnibus bill passed in late 2024 because of opposition in the House. (See Mass. Clean Energy Permitting, Gas Reform Bill Back on Track.)

Barrett said he does not mind a “legitimate compromise” but emphasized the importance of ensuring the administration’s proposal is not diluted.

Chretien said he still thinks the data justify a ban on residential suppliers but said the provisions in the bill “would minimize harm and abuse” and would push some predatory companies to leave the market.

A 2025 report by the AGO found that residential competitive supply customers experienced $73.7 million in net losses from July 2023 to June 2024, with the greatest losses experienced by lower-income customers.

Chris Ercoli, CEO of the Retail Energy Advancement League, said in a statement that “while this bill is attempting to improve consumer protections, we want to be certain the measures don’t impair cost-saving options or product innovation.”

Rate Reduction Bonds

The bill would also allow gas and electric utilities to issue rate reduction bonds to help pay for some of the initial costs of the energy transition. The administration estimated that this could save $5 billion over the next decade.

United’s Burnham said these bonds could be an “important tool to manage some of those upfront costs that can be a bit of a shock for ratepayers.”

Some other stakeholders expressed skepticism about whether the method would provide overall savings.

“You want to make sure that you’re doing cost reduction and not cost deferral,” Barrett said. He added that he would be concerned about interest expenses associated with deferring costs and stressed the importance of thoroughly studying how the proposal would affect long-term ratepayer costs.

Accountability

The Healey administration also proposes a series of regulatory changes intended to increase utility accountability.

The bill would explicitly ban utilities from using ratepayer funds for lobbying or advertising. It would also give the Department of Public Utilities authority to audit utility management and require changes based on audit findings.

On the transmission side, the bill would give the state increased authority over asset-condition projects. It would require transmission companies to file with the state’s Energy Facilities Siting Board (EFSB) “any proposed reconductoring, replacement or rebuilding of a transmission facility or group of transmission facilities on an existing transmission corridor that has an estimated cost of at least $25 million.”

After a project submission, the EFSB director could require the company to undergo the full application process for a consolidated transmission and distribution infrastructure facility permit. This decision would be informed by project need, near-term reliability risks and whether alternatives, including advanced transmission technologies, were considered.