Winter Utility Bills: No Good Choice for MA Residents

Image by user GT1976 on Wikimedia Commons

If you need immediate assistance with utility bills, please check out the following resources: 

MA Cold Relief Brochure – includes local agency info

Fuel Assistance Programs

LIHEAP Application – Low Income Home Energy Assistance Program
MA Good Neighbor Energy Fund – operated by Salvation Army

Local agency information by town

Massachusetts Department of Housing and Community Development
Cold Relief Heatline: (800) 632-8175

For utility company problems, please call the Department of Public Utilities (DPU) 

Phone: 1-877-886-5066

Utility shut-off restrictions: Between November 15 and March 15, utility service cannot be shutoff if it is needed to heat your home.

At the end of September, the MA Department of Public Utilities (DPU) rubber-stamped National Grid’s proposed rate hikes that will increase thousands of ratepayers’ monthly electric bills by $114 on average. While the DPU claims that state law prevented them from acting differently, the process and outcome point to serious systemic issues within MA’s utility system. Despite the state’s “consumer choice” program of electricity supply, most residents are left with little choice in getting affordable, reliable, and clean energy. In the current climate of high inflation, long term effects of the COVID pandemic, and an expected winter surge of new cases, residents need assurance that they can afford to keep their heat on.

Local media outlets widely covered the proposed increases, but the actual process to approve the rates is largely inscrutable to the public. With certain types of proposed rate hikes, there is a public hearing and forum for written comments, at least lending the illusion of public input. However, that is not the case with the type of change in question – a Basic Service filing. National Grid submitted their request on September 21, and the DPU approved on September 27, just four business days later. That is because these changes only affect the supply portion of your bill (typically 25-50% of the total bill). 

Since 1997, MA law mandates a competitive energy supply market, meaning the investor-owned utilities (IOUs) that we pay (Eversource, National Grid, Unitil, etc) are only responsible for the distribution of electricity – getting it from the generation source to its destination. MA residents can individually contract with any energy supplier they choose, theoretically creating an open market that will lead to lower prices and more options for clean energy. In practice ratepayers are instead forced to navigate a labyrinth of scams and predatory suppliers who use misleading contracts to take advantage of residents. According to a 2021 report filed by the MA Attorney General’s Office (AGO), ratepayers on individual contracts with competitive suppliers overpaid by more than $426 million over a 5-year period, when compared to the Basic Service rates offered by IOUs. This accounts for ~450,000 customers, adding up to ~$950 in excess bills per customer. The AGO and several lawmakers have proposed legislation to ban suppliers from signing up new residential customers, which would be a good start but insufficient to fix a broken system where ratepayers are subject to unfair rate hikes by the IOUs.

If an IOU ratepayer does not procure energy from a competitive supplier, they’re automatically enrolled in Basic Service with their IOU. The IOU will buy electricity on the competitive market and deliver it to their customers without marking up the supply cost. Each IOU submits their Basic Service supply rates twice a year, and the DPU double checks that the bids are fair before signing off. When approving National Grid’s latest rate hikes, the DPU acknowledged that many customers receive electricity directly from competitive suppliers and therefore will not be affected by the rate hikes. However, in the very same letter, the DPU “strongly urges customers to exercise caution” when navigating the competitive supply market. Ratepayers are effectively stuck between a rock and a hard place; you’ve either been up-charged hundreds of dollars on your individual contract already, or your bill will be hiked up $114 due to the IOUs newest proposal.

Alternatively, The 1997 energy deregulation bill also opened the door for municipal aggregation programs – where a city or town can contract with electricity suppliers to buy power in bulk on behalf of its residents, often at lower rates than the IOUs offer. These programs are an excellent way for municipalities to leverage better services for their residents.  If your community has such a program, you will be automatically enrolled. Many cities and towns also offer higher proportions of renewable energy supply – up to 100% – at rates that are still lower than the IOUs’. Short of establishing a new publicly-owned municipal utility – which is virtually impossible under MA law – this is the best bet for more community say over your energy supply. If your community has such a program (check here), you won’t be affected by the new rate hikes. However, the DPU is responsible for approving new municipal aggregation plans, and they frequently drag out the process, preventing ratepayers from accessing cheaper, cleaner energy. In fact, the mayor of Beverly filed a letter with the DPU last week, pointing out that their application has been pending for 18 months, despite being nearly identical to dozens of previously approved plans. Again, the DPU is allowing rates to sharply increase while holding the door shut on any alternatives for residents.

In their approval to National Grid, the DPU did agree with the AGO that the Basic Service procurement process is broken. They even agreed to host a public forum to address electricity supply and affordability “in the coming weeks”. This will be an excellent opportunity for residents, community groups, and elected officials to make their voices heard about how the IOUs and the DPU have failed ratepayers. We will share further information about this hearing once it’s available.
For a state that touts “consumer choice” in its electricity supply, residents this winter are given little choice at all to avoid high bills and move toward a cleaner, more just energy system. This is the result of an energy grid that’s far too dependent on natural gas as well as a regulatory body that serves the interests of the IOUs over the public. In the long term, we need publicly-owned utilities – democratically accountable to MA residents – that will deliver lower prices, better reliability, and an easier path to decarbonization. In the short term, we need a moratorium on rate hikes, relief for outstanding utilitydebt from the past two-and-half-years, and immediate steps to increase capacity for renewable energy and cease the consumption of fossil fuels.

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