Governor Healey Proposes Energy Cost Savings Legislation

Leominster, Massachusetts – Governor Maura Healey introduced new legislation on Tuesday, aimed at saving Massachusetts residents approximately $10 billion in energy costs over the next decade. The proposed reforms focus on utility billing practices, aiming to eliminate certain charges and enhance oversight to avoid unnecessary expenses for consumers.

At a press conference, the governor reiterated her commitment to lowering electric, gas, and heating bills, recognizing that prior efforts to reduce costs were not sufficient. This new proposal builds upon earlier energy plans announced in March, which anticipated a collective energy bill reduction of $220 million starting in April. The measures from these previous initiatives are expected to save electric and gas customers nearly $6 billion over the next five years.

The governor’s plan includes a variety of significant changes to utility billing. These adjustments involve the elimination or substantial reduction of various electric and gas charges, aimed at providing immediate relief to consumers. Among the key proposals is the reworking of net metering charges, establishing caps on month-to-month bill increases to shield customers from sudden spikes in charges.

In addition, the legislation seeks to broaden Massachusetts’ energy portfolio by relaxing restrictions on emerging nuclear technologies, allowing new energy sources to be procured, such as hydro power from Canada and energy storage solutions. Furthermore, the Department of Public Utilities (DPU) or an external firm will be backed to audit utility management and operations, ensuring greater cost transparency and accountability to ratepayers.

The legislation also includes provisions to protect vulnerable populations. Utility shutoffs will be banned during heat waves for customers experiencing financial difficulties, along with proposed discounted rates for mid-income gas customers. Additionally, gas companies will be permitted to install geothermal heat loops for individual customers, supporting large building owners while safeguarding other ratepayers.

Financial Support and Infrastructure Improvements

Plans outlined in the legislation will enable utilities to develop programs that allow customers to finance clean heating and weatherization upgrades through monthly billing, which helps minimize upfront expenses. The Healey administration has identified three primary areas where projected savings could arise: saving $6.9 billion by eliminating unnecessary costs, $2.5 billion through increased accountability, and $900 million for customer support initiatives.

This restructuring would permit utilities to finance energy efficiency programs via rate reduction bonds, potentially yielding up to $5 billion in cost reductions for consumers within the first decade of implementation. The new legislation also proposes lowering net metering credits, which would lead to a decrease in net metering surcharges on bills, offering an estimated $380 million in savings over ten years. Additionally, phasing out the Alternative Portfolio Standard charge could lead to annual savings of at least $60 million.

Consumer Protections and Competitive Suppliers

As part of a comprehensive consumer protection strategy, the legislation outlines reforms for third-party competitive electricity suppliers to better guard consumers against potential exploitation. Although these reforms do not prohibit third-party suppliers, they include stricter licensing requirements and the elimination of automatic renewals, ensuring customers have greater control over their energy options.

Advocacy groups, business organizations, and unions have positively received the proposed legislation, acknowledging its potential to decrease energy costs and modernize infrastructure. However, there remains some criticism regarding the lack of detail concerning the translation of proposed measures into tangible cost savings for consumers.

Overall, the new legislative measures proposed by Governor Healey signify a noteworthy step in addressing the pressing economic issue of energy affordability in Massachusetts, with the goal of balancing immediate cost reduction with the need for future energy demand and clean energy solutions.

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