Why are electric and gas bills so high?

Shock and anger have spread across Massachusetts as electric and gas bills have soared. The high cost of infrastructure, rising energy prices, and the coldest winter in several years have all led to higher bills for ratepayers. South Coast residents and beyond want to know: what are legislators doing about it?

Freetown’s Russell Warwick said that since building his home in 2003, his monthly geothermal electric heating bills have never exceeded $600. In January, Warwick’s bill was over $1,000, and families across the state saw similar increases. 

Late last month, anger boiled over for dozens more New Bedford residents and their local and state representatives. An information session at Pulaski Elementary School was supposed to be an opportunity for Eversource employees to help residents understand the increases on their bills — but after the Eversource representatives said they wouldn’t hold a question-and-answer session after their presentation, residents were left more riled up than before the meeting.

“I would’ve cancelled the meeting,” said Ward 1 City Councilor Leo Choquette, the meeting’s host. Eversource didn’t tell Choquette it had cancelled the group Q&A until 25 minutes before the meeting, he said afterward. “Some people here are very upset.”

New Bedford’s Elijah DeSousa, who started a 30,000-member Facebook group called “Citizens Against Eversource,” gave an impassioned speech to those gathered at Pulaski. He said his group will organize a statewide ballot initiative that could cap ratepayer increases. DeSousa and many others in the audience blamed the green energy incentives in Massachusetts as a major cost-driver.

Mayor Jon Mitchell and state Representatives Steven Ouellette, Mark Sylvia, and Chris Hendricks said at the meeting that they’ve been suffering from very high energy bills, too. Mitchell, who spoke before the Pulaski meeting, said he asked his wife how many months were reflected in their most recent bill — and was surprised to find that it was just one. 

The state representatives ended up fielding questions from the Pulaski audience. They have since told The Light that their offices have been inundated with phone calls and emails. So why are bills so high? 

Breaking down your energy bill — and which costs are rising

A large portion of the price of energy, be it gas or electric, comes from delivery charges — the price of bringing the energy to your home. In New Bedford, it’s about 65% of your bill. Investor-owned utilities companies have been raising rates over time, with the state Department of Public Utilities approving an annual winter increase going into effect Nov. 1, 2024.

Eversource provides natural gas and electricity to customers in New Bedford. Eversource’s customer bills increased up to 30% for natural gas customers. New Bedford is one of Eversource’s NSTAR territories, where delivery rates increased 24%.

The DPU has more significant oversight on distribution charges than any other line on customers’ gas and electric bills, according to documents from a recent briefing that state energy officials recently gave for state House members and staff.  The briefing outlined the DPU’s extensive review process for rate increases. (The DPU declined to comment after repeated requests from The Light.) 

Distribution charges increase based on supply and demand. They’re how Massachusetts residents pay for delivery services, badly needed infrastructure upgrades, green energy incentives, and cost-assistance programs, according to Eversource, which supplies energy for gas and electric heating to residential properties.

Still, says William Hinkle, a spokesperson for Eversource, higher usage this winter mostly drove high bills. The delivery charge can vary based on whether the energy is gas or electric, he said, but that rate gets multiplied by the amount of energy you use.

In January, Hinkle said, electric usage was 19% higher than it was in December, and 39% higher than it was in November. So, in January, when it was colder than it had been in years, the November changes became noticeable.

Hinkle didn’t say whether Eversource’s profits increased this year, but the utility reported that its 2024 earnings increased 29% on gas distribution. Hinkle said that after $442 million in full-year losses in 2023, when Eversource exited the offshore wind industry, it made sense that earnings increased in 2024. 

Eversource said it plans to invest $24.2 billion in gas distribution networks and electric transmission from 2025 to 2029, — an increase of nearly 10% on its previous plan for 2024 to 2028.

It is also subject to the state’s 2014 Gas Leaks Act, which requires utility companies to submit plans to the DPU to replace old natural gas infrastructure. A 2022 act requires gas distribution companies to consider using advanced leak repair technology and renewable thermal energy infrastructure.

Eversource’s critics

New Bedford’s Democratic Rep. Christopher Hendricks called pipeline replacements essential, but lamented that the cost allows utility companies to raise their rates so much. He said there needs to be a long-term solution to take the burden off customers.

Jess Nahigian, deputy director of Sierra Club Massachusetts, said that the delivery charge has a much bigger impact on your bill than the rising cost of energy. She blamed rate increases on “unnecessary spending” on new gas pipelines and unwarranted high profit margins. She pointed out that Eversource CEO Joe Nolan’s overall compensation is almost $19 million.

“[In 2024] they spent over a billion dollars investing in new pipelines,” said Nahigian. “They’re making that profit off of building those new pipelines. And the way they’re making that profit is they’re passing the cost onto us, the customers.”

A portion of delivery costs — about 15% in the New Bedford area, according to Nahigian — goes towards the MassSave program. That’s an energy efficiency initiative that offers no-cost services to improve a home’s energy efficiency, such as home energy assessments. 

Hinkle said that a $5 billion MassSave budget, approved in November, represented about 60% of the increase that people in New Bedford, an NStar Gas Service area, saw on their bills.

In response to complaints about high bills, the DPU approved a $500 million cut to the MassSave budget. Some say this is not enough, while others say it is just a short-term solution, which will have a negative impact in the future. 

So what now? Legislators respond

In addition to cutting $500 million from MassSave, DPU released an Energy Affordability Agenda, designed to give $220 million in immediate relief, and save $5.8 billion over five years. 

This includes a $50 credit on electricity bills for the month of April for Eversource, National Grid, and Unitil customers — and more savings for people who use heat pumps. The DPU also approved a temporary reduction in gas bills. 

New Bedford’s Rep. Antonio Cabral sent a letter to Attorney General Andrea Campbell in February requesting that she reevaluate whether rate increases have been “appropriate and realistic.” 

All five of New Bedford’s state representatives asked to sign on to the letter — although Westport’s Rep. Steven Ouellette’s name was inadvertently left off — and Sen. Mark Montigny sent his own letters to Campbell, the Executive Office of Energy and Environmental Affairs, and the chair of the DPU.

“There is simply no excuse why a 30% increase was rubber stamped by the DPU, and it must never be allowed,” Montigny wrote in a statement to The New Bedford Light. “The DPU, Attorney General, and administration officials must pursue far more aggressive measures to help ratepayers, many of whom are on fixed-incomes and simply cannot afford the escalating rates. We cannot afford to pay some of the highest energy rates in the nation and therefore must examine all cost drivers, including MassSave, through intensive auditing and cost controls.” 

Cabral expressed a similar concern with transparency, questioning the process for rate increase approval. 

But Rep. Christopher Markey is hopeful for the future of energy in the commonwealth. He just said it might take a while. 

Markey said the end goal is having a new economy in New England, based on generating electricity through offshore wind, coupled with hydro power, a gas pipeline and nuclear energy. But, he said, creating new infrastructure is expensive, so it can’t happen all at once.

“Having a well balanced portfolio of energy is really important,” Markey said. “Having an economy like offshore wind is something that is going to be much different than we’ve ever experienced … There’s going to be reliable renewable energy off the shore of New England, and we don’t have to get our energy and transport it all the way from Louisiana or Texas, or Mississippi or Alabama. So it’s a big difference in what we see as an infrastructure improvement for our economy.”

Gov. Maura Healey has plans to file an energy affordability and independence bill in the coming weeks, but heading into warmer months, electric bills are still a concern. The extended weather forecast for Massachusetts predicts a hotter, drier summer than we’re used to, and electric bills apply to air conditioning as well as heating. 

MassSave cuts — not the root of the problem

Mark Dyen, who used to administer MassSave, is now a volunteer working with Gas Transition Allies and 350 Massachusetts, a climate justice advocacy organization. He said the state program is crucial because it’s publicly funded and free to users. 

That means the advice customers get on how to make their homes more energy efficient is more objective than if it came from a private company, Dyen said. And it’s set up to be cost-effective. 

Dyen said cutting MassSave was the easiest thing for the DPU to do because it doesn’t hurt the gas and electric companies. But it’s not the root of the problem.  

“The governor wanted to show that she was concerned with the high bills. And I think everybody in the government, everybody in the state government who deals with this, was shocked by how much the bills went up,” Dyen said. 

“When the gas company officials were challenged, ‘why are the bills so high?’ They did not say, ‘oh, it’s because we’ve been raising the cost of the distribution system … for the past seven years, but nobody noticed because it was pretty warm.’ They said, ‘oh, the MassSave rate increase just went into effect.’”

Rather than cuts to the MassSave budget, Dyen would like to see more regulatory oversight to control gas company spending on pipeline replacements.

But Markey of New Bedford said he is concerned about the way MassSave is budgeted. Because the program has a pot of money available for a certain period — the now $4.5 billion covers three years — Markey worries that it encourages spending and unnecessary hiring. 

“I think just a big pile of money going at a quick rate is never really healthy to one, accomplish the goal, and, two, to do it in an efficient way.”

Dyen said that part of MassSave’s mission is to encourage people to install heat pumps, which run on electricity and energy-efficiently transfer heat cheaply, lessening the need for gas and lowering electric bills in energy-inefficient homes. Hinkle said that as more gas customers take advantage of heat pump incentives, that funding comes from the energy efficiency surcharge in a natural gas bill. 

Hendricks saw it differently. 

“When someone utilizes MassSave, they’re losing customers. That’s their whole business,” he said. So, by replacing pipeline — which Hendricks said is necessary — Eversource can recoup costs in delivery charges. 

Hinkle said he thinks the cuts to MassSave will have a positive impact, but said Eversource is still working closely with administration and elected officials to keep energy affordable as Massachusetts makes an energy transition.

Colin Hogan contributed to this report.