BOSTON — Senate Democrats unveiled their long-awaited answer Wednesday morning to the soaring utility bills that have become a defining election year issue on Beacon Hill, proposing legislation they say will result in more than $14 billion in ratepayer savings over a decade by changing how gas and electric utilities do business and paring back gas infrastructure spending that has helped drive costs up.
The bill (S 3143) was being polled out of the Senate Ways and Means Committee and is scheduled for debate next Wednesday, July 1. It lands as Massachusetts households shoulder some of the highest energy costs in the country and as summer air conditioning demand threatens to push electric bills higher yet -- a mirror of the same affordability pressure that drove the House to act over the winter.
Senate leaders framed their bill as a hunt for “pockets of overspending and overcharging that in some cases are legacies of past policies that have exhausted their usefulness” within the utilities in what they said is a sharper turn against the companies than the House took.
Sen. Michael Barrett, the primary architect of the bill but not a member of Ways and Means, told reporters the legislation tackles “a number of issues involving the gas and electric utilities” because “that is where the money is.” He also made clear that he sees value in investing, particularly in energy efficiency programs.
“We represent constituents who want manageable bills and affordable bills today, but they also want manageable and affordable bills tomorrow. They’re not dumb, they know that investing $1 today is worthwhile if it’ll yield sufficient savings two weeks from now, two years from now, down the road. They’re interested in saving money today, but saving money next year too,” the Lexington Democrat said. “They’re interested in their family’s futures, and not just their family’s present. So we don’t assume for a moment that constituents are only interested in immediate relief. They’re interested in total relief and in total savings.”
Bay State electric bills have climbed from roughly $130 to $160 a month a decade ago to a peak around $250, while a typical winter gas bill has jumped from about $140 to more than $320, according to utility filings with the Department of Public Utilities. The median Massachusetts household spent about 3% of its income on energy in 2024, just above the national average.
Senate, House zero in on different primary targets
The bill advancing in the Senate finds savings in a very different way from the bill (H 5175) the House passed 128-27 in February. Senate leaders predict savings of more than $14 billion over 10 years, compared with the roughly $9 billion over a decade the House claimed for its version. Eventually, negotiators from each branch will have to reconcile the approaches before anything becomes law.
While representatives leaned on a roughly $1 billion cut to the Mass Save energy efficiency program, Barrett had said repeatedly he would not follow suit and instead trained his attention on the Gas System Enhancement Program.
Rather than cut the Mass Save budget, the Senate Ways and Means bill would cap the program’s planning and administration spending at 5% of funds, prohibit mid-term budget increases without offsets elsewhere, make mandatory “performance incentives” paid to utilities now optional, and install a new, temporary five-person oversight board to scrutinize the program as a whole.
On GSEP, the bill phases the program out entirely by 2030. Until then, the legislation would narrow the program to leak-prone pipe, ending the wholesale replacement of all old pipe that critics say inflated costs.
Barrett said the contrast between the House and Senate approaches runs deeper than which programs takes a hit. While the House found its headline savings inside Mass Save, the Senate instead trains its fire on the utilities themselves.
Barrett highlighted six things in the Senate bill that he said will save ratepayers the greatest amount of money: letting utilities securitize, or refinance at lower cost, certain grid modernization, storm recovery and gas transition expenses (estimated 10-year savings of up to $7.1 billion, or about half of the entire Senate proposal); moving towards a streamlined comprehensive distribution planning (estimated savings of $1.79 billion), phasing out the GSEP program (estimated $1.46 billion savings), directing the DPU to investigate price markups realized in basic service procurements (estimated $1 billion savings), removing the six-month limit on basic service contracts negotiated by utilities (estimated $780 million savings), and ordering the DPU to review rate reforms that cut bills (estimated $750 million savings).
Of those six ideas, Barrett said the House bill included only the removal of the six-month limit on basic service contracts.
“If you want to save people serious money, you do have to take a fair but tough look again at the gas and electric utilities and the way they make money and collect change from our constituents,” he said. The senator added, “If you’re going to leave all that money on the table -- and it is true that essentially all of the top six are problematic in the eyes of the gas and electric utilities -- then you’re not going to be able to cut bills in a serious way. You can’t find enough alternatives to being fair but tough on the current system of charging and overcharging. You just can’t do the job. You’ve got to take on these very difficult and hard to penetrate sources of cost.”
While he forecast overall savings during a 10-year timeline, Barrett during a briefing on the bill did not describe how much a typical ratepayer could expect to save or when they might first experience noticeable savings in their monthly bills.
Stocking the toolbox with tools
Barrett explained that the Senate approach is to authorize securitization, not require it. He said the “secret sauce of savings for securitization comes in the form of not assigning or allowing the usual return on equity, which is roughly about 10% on all new construction.”
Normally, Barrett explained, a utility finances new construction half by selling bonds and half by issuing stock, and ratepayers end up covering the roughly 10% return owed to those stock investors. Securitization replaces that mix with 100% low-cost debt, which Barrett referred to as “so-called rate reduction bonds” with no return on equity required. That happens only when, “in exceptional circumstances the DPU and the utility can negotiate an agreement whereby they forego profit on an important cluster of construction projects,” he said.
He said the Healey administration “would like to use securitization very carefully and very judiciously in this period of very high energy costs, in order to give occasional but real relief over the course of the next 10 years.” He said senators “think it should be used very carefully, rarely.”
“Here’s the way I imagine it working: We can project that the electric side of the house in the utility business here in the state’s going to enjoy some wonderful years over the next 20 or so years ... You’re going to have to have a new grid, and AI, to the degree that it comes to New England, is going to accelerate that. They’re going to make a lot of money on the electric side. We’re going to have to have every tool in the toolbox to offset the increased costs. People’s electric bills are going to go up under any scenario that anyone envisions,” Barrett said. He added, “This will be the backdrop in front of which a governor engages a utility and selectively decides to give ratepayers a break using securitization. If you keep securitization out of the mix altogether, I think you’re making a serious strategic mistake.”
GSEP, created in a 2014 gas leaks law, lets utilities recover the cost of replacing aging, leak-prone pipe through a surcharge on customer bills. Spending has reached $6.2 billion since then and is projected to total $42 billion by the time the work is fully paid off.
The DPU is already ratcheting down the GSEP revenue cap towards 1.5%, but the Senate goes further by ending the bonus payments the program provides in 2030 and reverting pipeline work to a pre-2014 review process that weighs each project’s necessity. The Senate pegs the GSEP changes at about $1.46 billion in savings.
“The utilities are responsible for operating a safe, reliable system, and always have been. That predates GSEP by a century,” Barrett said in response to concerns that phasing out the program could lead to a less safe gas system. He added, “One thing I would want everyone to recognize is that when the gas company replaces pipe under the old system, they still get their 10% markup, their 10% statutory rate of return, in addition to all their costs back. What’s different about GSEP is that they get it paid in real time. The ordinary rate case represents or imposes a delay of one to five years after the work is done. That is where the savings come. That’s called regulatory lag, and it’s not a glitch in the system, it’s a feature.”
Senate President Karen Spilka said the legislation “would make real and tangible changes when people open up their energy bills every month” at a time of “reckless federal actions.” She cast the bill as cutting costs without steering the state off its climate commitments.
But the Senate does pull back on clean energy mandates in at least two places in the bill. It would slow down the planned acceleration in the Renewable Portfolio Standard, the schedule that requires utilities to steadily increase clean electricity purchases, from increases of 3% a year for 2027, 2028 and 2029 to 1% a year; and it would cut net metering credits paid to large solar and wind facilities for the surplus power they send back to the grid. Those provisions are projected to yield $213 million and $75 million in savings, respectively.
Unless it is added through a floor amendment next week, the Senate bill will not include a repeal of the 1982 voter law that requires that proposed new nuclear fission facilities in Massachusetts secure approval of a majority of voters through a statewide ballot initiative. The governor proposed that last year in a bid to open the door to greater deployment of newer nuclear energy facilities and the House included it in its energy bill, assuring that it will at least be on the negotiating table during eventual conference committee talks.
Under legislative rules, the House and Senate can keep talks on an energy bill alive throughout 2026 as long as they move the competing bills into a conference committee by July 31.
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