DPU Cuts MassSave Funding by $500 Million, Approves Gas Bill Reductions

The Department of Public Utilities ordered a reduction of the total three-year budget for the MassSave energy efficiency program by $500 million on Friday to reduce gas bills.

The reduction is the latest in a series of measures responding to Massachusetts residents’ concern over increasing gas prices. After residents and state leaders criticized Eversource and National Grid’s rate increases, the DPU ordered the companies to lower gas bills by at least 5 percent. Both companies submitted individual proposals to reduce rates, catalyzing a new round of criticisms over National Grid’s addition of carrying fees.

The company amended its earlier proposal to charge customers a carrying fee for the deferred collection the same day as DPU’s latest order.

In its order, the DPU stated that the “responsibility of weighing the bill impacts of these three-year plans rests squarely with the department.”

“We take our responsibility as the stewards of ratepayer funds seriously,” the company added.

The residential program budgets will drop by 25 percent for gas and 15 percent for electric in total, the impact on individual customers will vary depending on their utility provider.

Massachusetts residents saw their winter gas bills skyrocket due to higher energy efficiency charges in the delivery portion of the bill, which went towards funding the MassSave program.

In addition to the budget reduction, the order required that MassSave program administrators find alternative sources of funding to support decarbonization, instead of solely relying “on funding provided by ratepayers.”

Penni Conner, executive vice president of customer experience at Eversource, wrote in a statement that “this is the most immediate step the state can take to provide long-term rate relief” while remaining “steadfastly committed to the MassSave programs.”

Ilan Levy, a Cambridge resident, acknowledged the importance of sustainability, but said that sky-high gas rates are a price too high to pay.

“We have to pay for it. It’s a difficult choice, but is there a way that we can do it differently?” Levy said.

The DPU’s announcement is expected to provide much awaited relief for residents, who have struggled with higher bills in January and February due to the colder winter.

Proposals put forth by utility companies such as Eversource and National Grid have been approved, meaning residents can expect a reduction of around 10 percent in their March and April gas bills.

He also expressed frustration that with the arrival of the warmer months, residents will receive minimal benefits from the rate cuts, while still reeling from their exorbitant bills in the winter months.

“Basically, we are going to be refunded a minimum compared to the last three bills that we have received, which were staggering, to say the least,” Levy said.

In response to the criticism, Eversource emphasised that all utility companies are required to adjust the gas supply rate outside of scheduled adjustments if supply costs increase or decrease by more than 5 percent.

This prompted a rate adjustment that went into effect on Feb 1, due to higher costs of gas that Eversource purchased from the market in January, driven by colder temperatures in the regions where the gas is produced.

The DPU did not respond to requests for comment.

The DPU’s reduction of the MassSave budget as a whole could also mean some companies do not need to defer costs any further, and can expect normal summer bills.

“Customers will not be charged interest on this deferral,” the DPU wrote in a statement.

As an additional safety net, the DPU also extended the service shut-off moratorium from March 15 to April 1, meaning DPU-regulated utilities companies cannot shut off services to homes experiencing financial hardship.

“This is how the collaborative process is intended to work — a wide variety of diverse stakeholders come together to develop a plan aimed at achieving Massachusetts’ ambitious clean energy targets, and that plan then receives a thorough regulatory review to ensure all aspects of the program respond to customer needs,” Conner said.

As the DPU continues to work to lower residents’ gas bills, Levy said he hopes to see increased transparency and advocacy from the organization.

“I want a clear understanding of where the costs are, and why we’re paying so much, and when those increases are implemented,” he said. “Also, why the DPU allowed Eversource and the other gas companies to hike, so substantially, the delivery charge in October.”

“Please clarify the way that this is set up so that the actual user can read the bill and understand where the money goes,” he added.

—Staff writer Stephanie Dragoi can be reached at stephanie.dragoi@thecrimson.com.

—Staff writer Thamini Vijeyasingam can be reached at thamini.vijeyasingam@thecrimson.com. Follow her on X @vijeyasingam.