How energy affordability in Massachusetts reached crisis mode
This week on the Codcast, CommonWealth Beacon reporter Jordan Wolman speaks with Kyle Murray, director of state program implementation in Massachusetts for the environmental nonprofit Acadia Center, and Dan Dolan, president of the New England Power Generators Association, about those tradeoffs and why the costs of electricity and gas are so expensive in the Bay State in the first place.
Jordan Wolman: Do we really have high energy costs? Is that narrative true relative to the rest of the country?
Kyle Murray:
“If you look at New England as a region, it it devoid of those natural fossil resources that have been talked about. It is a heavily forested area which leads to very high costs and we are also an older region in terms of our infrastructure. So we are seeing significant costs in terms of replacing that infracture, and versus other areas that are maybe a bit more spaced out, so we do see higher costs in those areas.”
“We do have some of the highest rates and some of the highest bills in the country. Now, the “why” is an important question and we would pin a lot of this on our over reliance on natural gas as a resource. We as a region rely over 50% on natural gas for both electric and gas supply, so when you see those prices spike, you see costs go up”
“As Dan pointed out, those renewable resources unfortunately have not come online as fast as we would have hoped, and part of that is due to the Trump administration… Part of that is also on us as a state, we have not really done enough. We tried to take a sort of cautious approach towards moving forwards with these big resource solicitations, and unfortunately as a result we are kind of behind where we would have hoped to be, as we are now seeing prices associated with natural gas start to spike.”
“Those delivery charges that we have are higher than other regions. And again, we do pin those mainly on aging infrastructure, heavily forested area, and lot of storm damage, which really hurt us as a region”
Jordan Wolman: Two factors I want to throw into this conversation: the fact that electricity demand is going to go up, and that we want to meeting that riding demand with cleaner sources. In terms of how you see the current affordability crisis meeting those two factors in the future?
Kyle Murray:
“It’s going to be a challenge. Like Dan has noted, this is a supply challenge as well. Our solutions are not limited to bringing in a ton of new supply. There is this assumption, a lot of the modeling has shown demand growth doubling, tripling in certain aspects, as we are absolutely, as we electrify, going to see demand growth… The question is how much. And there’s a lot more that we can do to be creative on limited demand growth that I think really will help curb the need for additional supply. We’re going to need more, but how much really is the big question. There’s a lot to be done on time of use (TOU) rates, rate structures, that can incentivize different hours of usage. Also there’s this idea that electrification means just demand growth. That isn’t necessarily the case. An EV is at the end of the day also a big battery. So yes, they draw from the grid, but they can also be used as a resource for the grid to export power during those peak periods. So there’s also additional things to be done on transmission to other regions of the country and other countries. There’s discussions that are going on with Nova Scotia right now to bring in offshore wind – those will take time, you know, not saying that’s going to be an overnight solution in any way or in any way guaranteed, but there’s also regions of this country that have, you know, have significant clean resources that with additional transmission we could hopefully bring into the mix. So I just get a little frustrated when we talk about demand and the like, you know, you know, use going up that it’s just given that it’s just treated as a given that well, it’s going to double or triple. There’s things to be done on transmission. There’s things to be done. A demand reduction if energy efficiency, a key resource has driven has kept demand low. You know, gas and electric demand have been flat or lower for the past, I don’t know, 15 years or so as a result of a lot of the work we’ve done in energy efficiency.”
“And I think it’s important to note too, you’re seeing a lot of strange bedfellows as you’re seeing fossil fuel companies now pushing the Trump administration to allow for production of offshore wind. You know, I think there’s an acknowledgement that we really need these, this additional supply to to come online. I will note that ISO New England which is our regional grid administrator has been in charge of interconnecting new generation and managing wholesale markets has not until very recently moved to really modernize its processes for studying new generators trying to interconnect. And you know that’s similar for new distributed generation trying to interconnect at the local utility level. And ISO New England has recently overhauled some of their processes. So we may start seeing some additional interconnection happen at a quicker rate. I also would just flag, Dan noted the that heat wave where we hit, you know, really extreme power usage. Really important to note the role that solar played in suppressing prices on that day without it. You know, I think the 7:00 PM peak, you know, ISO was around 1500 per MW hour. Something along the lines of there. But at around 2:00 PM, even though, even though energy use was higher, the, the peak was only around $200 per MW hour. I’m going off of memory here, so feel free to fact check me on that. But I mean, this really shows the important role that peak reduction can play. Like you know, $1500 per MW hour to 200 or something is a really really extreme difference.”
“It’s important to center our state’s climate commitments as part of this. And, you know, and to factor in the fact that these are real costs that we have associated with climate issues. We are seeing increases in storm damage as a result of the increased climate impacts we were having. But at the end of the day, you know a lot of people are just going to come back to talking about affordability, what they see on their what they see on their energy bill at the end of the day, you get your electric bill and people are rightfully upset about that. So then the question I think partially becomes what impacts can these additional resources have on affordability? And much has been made of the fact that, you know, we there was a proposed pipeline back in 2016, 2015 around that time that didn’t end up going through. And you know, when you hear a lot of rhetoric around if only we got that pipeline, we would have affordable energy in New England. We disagree with that premise. I personally disagree with that premise because we’ve actually interestingly enough seen an expansion of gas into New England. There has been you know through incremental increases. There has been around since I think it’s 2014, 2015, 2016 around 30% increase in gas flow into the region and gas supply during that time gas demand has been flat or lowered and yet what we have seen during that period is continued increase in cost. So there is this sort of counterfactual that is very tough to to to go against. We’re saying like if only we had this thing, we would have been have lower bills. But we sort of ran an experiment in real time. We increase gas supply by around 30% and we did not see a correlating drop in supply costs.”
Jordan Wolman: So, Kyle, so let’s get into the public policy portion. You know, we need to talk about Mass Save, which, you know, was the most contentious part of the energy affordability bill that the House passed last month. That bill, which was prompted by Governor Healy, who filed her own version of it in 2025, would cut Mass Save by $1 billion with AB. That’s a big part of this public policy portion of the bill that we’re talking about. Walk me through the trade-offs of a decision like that. Again, it hasn’t been fully, you know, it still needs to pass the Senate is a long legislative process here, but just the policy signal that that sends. I think it’s worth talking through those trade-offs.
“Yeah, I have many thoughts, as you might imagine, the 1st is just basic math. So they, there is a flag in the bill that there that the cuts are supposed to focus on administration and marketing and advertising. By about the time this bill will be done, let’s roughly estimate September-ish. But you know, but when it goes through, you know, a lot of work to be done and then it takes a few months to implement, you know, the program administrators to actually implement these cuts. So you’re largely focusing on 2027. The marketing and administration budget for 2027 is $150 million. Is that high? That’s debatable. You know, we can have a conversation about that, but there is nowhere near a billion dollars in marketing and administration. The vast majority of the money in Mass Save goes to incentives. So what is going to be cut is incentives. The program itself will be cut and very likely many parts of the program will be shut down. Is that is that acceptable? I don’t know, not to me, but I would just appreciate when having this discussion if people would be candid about what these a billion dollar cut would actually do to the program. Now it’s important to note that any investments that Mass Save has to make have to be cost effective. They run through a very strict calculator to look at is this investment cost effective? And those are run before the Department of Public Utilities. So investments that Mass Save makes already have to be cost effective. And you know, the figure is generally a three-to-one return on for every $1 you invest in Mass Save, there are about $3 in benefits you get from the program. There has been a trend recently of people kind of not really believing the benefits are real because you know, looking at public health benefits, climate benefits. So some of the things we’ve started to focus on a bit are purely electric gas and delivered fuel supply and infrastructure savings as a result of this. And I can say that from 2016 to 2024, electric, gas and supply and deliver fuel supply and infrastructure savings was over $16 billion. So if we did not have Mass Save in place, we would have had to pay $16 billion additional on those side of things. For that we invested $8 billion in Mass Save. So invested $8 billion in Mass Save, avoided 16 billion in electric, gas and delivered fuels supply and infrastructure. So that’s literally it’s a program that saves money and that is what very much frustrates me when it is discussed purely in terms of costs. We do not talk about the benefits of the program as much.”
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