The Massachusetts House Energy Affordability Bill Doesn't Get the Job Done!

On February 26^th the Massachusetts House Ways and Means Committee released a new version of an energy affordability bill, H.5151 "An Act Relative to Energy Affordability, Clean Power, and Economic Competitiveness."   While this bill does preserve the state’s pollution reduction targets (an earlier version of the bill did not!) it drastically cuts the state’s energy efficiency program, Mass Save by $1 billion.

Once again I believe the  MA General Court has skewed priorities. Here are the facts:

• Failure to Curb Gas Spending: Environmental advocates, including the Conservation Law Foundation noted that the bill does not attempt to reduce the high costs associated with gas infrastructure, particularly the rapid, state-mandated (under the GSEP Program) replacement of pipes, which is a big contributor to high consumer bills.
• Continuation of Gas Subsidies: The legislation does not address the ongoing build-out of gas infrastructure, despite state and community goals to transition off fossil fuels and work towards community electrification and geothermal projects.
• Underlying Drivers Not addressed: Rather than scapegoat the Mass Save Program we need to address the core drivers of escalating utility costs, including high expenditures on leak-prone pipe infrastructure that we are not planning to use in 25 years!

Gas Infrastructure Costs are the Fundamental Problem:

• Rising GSEP Costs: The Gas System Enhancement Plan (GSEP), which allows utilities to quickly pass costs for replacing pipes to customers, has seen costs rise significantly, reaching over $800 million annually in recent years.
• Infrastructure Charges: The costs of maintaining and repairing aging, leaking local gas pipes now make up a larger portion of consumer bills than the actual cost of the gas supply. 

 Proposed Solutions Not Fully Adopted:

• Prohibiting Cost Passing: Earlier proposals (such as H.2698 and S.2291) aimed to prevent utilities from charging ratepayers for the construction or expansion of new interstate gas infrastructure, but these have not been central to the current House bill

For every one dollar spent on Mass Save, residents receive $2.69 back in benefits, according to the Acadia Center. The program improves energy efficiency and allows residents to save on certain appliances and insulate their homes, leading to lower overall energy costs. 

Important Facts to Know

In Massachusetts, gas ratepayers are charged roughly $1 billion annually for the construction of new pipes and the replacement of aging, leak-prone infrastructure. In 2023 alone, existing ratepayers were charged $160 million just to subsidize the connection of new customers to the gas system, a cost that averaged $9,000 per new connection. 

Key details on gas infrastructure costs passed to ratepayers include:

• System Expansion & Hookups: Since 2018, 80 percent of the costs for connecting new customers to the gas system in Massachusetts have been subsidized by existing ratepayers.
• Pipe Replacement Costs: The Gas System Enhancement Plan (GSEP) in Massachusetts, which replaces leak-prone pipes, has cost ratepayers $6.2 billion over the last decade, with 2024 costs reaching over $814 million.
• Rising Costs: The cost of adding new customers increased by 50% between 2020 and 2023.

The Senate is also expected to draft their own version of the bill and then the two bills would need to be reconciled. Hopefully the Senate will not include the drastic cuts to the Mass Save Program.