Gov. Healey unveils energy affordability legislation

Gov. Maura Healey on May 13 announced the filing of legislation intended to lower energy costs for consumers, bring more energy into Massachusetts, increase utility accountability and promote innovation.

Her Energy Affordability, Independence and Innovation Act would make reforms that include eliminating or reducing certain charges on utility bills, taking steps to ensure that utilities aren’t passing unnecessary costs onto ratepayers, and reducing barriers to cutting-edge nuclear technologies.

The administration estimates that the bill could save Massachusetts customers $10 billion over 10 years — on top of $6 billion in estimated savings from her Energy Affordability Agenda announced in March.

The administration said it worked with businesses, energy experts, developers and universities “to put forward the best ideas to drive down costs and get things built in Massachusetts,” adding that the bill will “protect ratepayers from subsidizing infrastructure that doesn’t serve them.” Energy and Environmental Affairs Secretary Rebecca Tepper said the bill “tackles Massachusetts’ lack of homegrown energy … and an absence of oversight of costly grid upgrades.”

To reduce utility bill volatility and rate shocks, the legislation would require the Department of Public Utilities to review and reform all charges on bills and establish a cap on month-to-month bill increases.

The legislation would allow utilities to finance Mass Save, Electric Sector Modernization Plans, storm response, and other programs through rate reduction bonds, intended to create the ability to reduce ratepayer costs by up to $5 billion in the first 10 years.

The administration said its bill would reduce the value of net metering credits for new, large net metering facilities, with the intention of reducing the net metering surcharge. The bill would also phase out the Alternative Portfolio Standard charge.

The bill would expand the state’s authority to procure new sources of energy generation, energy storage, and demand response, which is expected to accelerate the development of low-cost electricity generation throughout the region. Giving the state the authority to procure energy directly would eliminate fees the state is currently required to pay to utilities for entering into such contracts, which would save ratepayers billions of dollars over the life of the contracts.

The bill would also require utilities to update their interconnection process to reduce the time and cost for customers to connect new loads, solar and storage projects to the grid.

The bill would give the DPU and electric utilities more flexibility in how electric power supply is purchased and prices are set by eliminating the requirement that forces utilities to buy electricity every six months, regardless of current market conditions.

The bill would authorize the DPU or an outside firm to audit utilities’ management and operations, and would ban the use of ratepayer funds for advertising, lobbying, entertainment, and other costs.

The Energy Facilities Siting Board would get new oversight authority over transmission projects. New “Energy Ready Zones” would build out utility infrastructure intended to support housing and economic development without increasing costs to ratepayers at large.

A compromise proposal would end “unscrupulous practices” in the competitive supply industry — barring the most predatory marketing practices, eliminating automatic renewals and variable rate contracts, establishing new licensing requirements for door-to-door and telemarketing firms, and strengthening oversight.

Gas companies would be authorized to own and operate geothermal heat loops that serve individual customers, intended to help universities, hospitals, and other large building owners afford geothermal heating and cooling while insulating other ratepayers from associated costs.

The bill would prohibit utility shutoffs due to financial hardship during heat waves, expand the moderate-income discount rate to gas customers, and authorize utilities to establish programs that allow individual customers to finance clean heating, weatherization and other home upgrades through their bills over time, reducing the need for up-front incentives paid for through utility rates.