By Maggie Molina | Tue, August 4, 26
As federal efforts threaten to weaken or dismantle common-sense energy efficiency programs, state and local leadership is more important than ever. Rising energy demand and spiking utility bills are pushing policymakers to prioritize strategies that provide both immediate and long-term relief. Energy efficiency, demand flexibility, and virtual power plants remain the most cost-effective tools available.
Massachusetts is a longtime national leader in energy conservation and has more recently emerged as a leader in energy justice. As its legislature debates how to confront mounting pressures over energy affordability, that leadership is now being tested. The role of low-cost, demand-side strategies, including energy efficiency, hangs in the balance. The Commonwealth has an opportunity to keep its commitment to lowering costs and expanding efficiency access, or risk retreating from programs that deliver proven value.
Why Massachusetts is prioritizing energy affordability
For months, concerns have mounted in Massachusetts over rising energy costs and affordability. New England customers have historically faced some of the highest energy prices in the country, largely because the region relies heavily on imported fossil fuels for electricity generation and heating, which leaves customers exposed to fuel price swings. This has contributed to one of the largest real electricity price increases in the country; from 2015 to 2025, prices jumped 3.2 cent per kilowatt hour, according to an analysis from LBNL. These trends have intensified calls for action in the Legislature, where policymakers are seeking durable, cost-effective solutions for households and businesses.
Energy efficiency is central to any affordability strategy. Mass Save, the nation's leading energy efficiency program, returns roughly $3 in savings for every $1 invested. All customers benefit, because efficiency reduces overall system demand, including at peak times when electricity is most expensive to deliver. By lowering peaks, efficiency and demand response programs reduce costs for everyone, not just program participants.
How various proposals would impact Mass Save
The Governor's office, Senate, and House of Representatives have each proposed energy affordability legislation, but their approaches to energy efficiency vary sharply. Some of the largest differences are centered on Mass Save, the nation's leading energy efficiency program.
Last year, the Healey administration proposed legislation to tackle energy affordability through several measures, including reforms to maximize and streamline energy efficiency investments (NEEP reviewed some of the proposed actions here). For Mass Save, the proposal would maintain nation-leading commitments to efficiency, electrification, and greenhouse gas reduction while providing greater flexibility for program financing, implementation, and utility business models.
This year, the Massachusetts House passed an energy affordability bill that would take a markedly different approach by cutting Mass Save by $1 billion in the middle of the program cycle. The proposal sparked significant backlash from the state's local business community and advocates. Although framed as a cut to marketing and administration, it would instead disrupt programs, leave contractors uncertain about future budgets, and reduce essential services for customers seeking energy upgrades to lower bills. Slashing energy efficiency budgets would also undercut efforts to reach underserved customers most in need of affordability assistance, including renters and small businesses.
The Senate passed its version of the bill in July, which aims to save $14 billion for customers through numerous strategies. Unlike the House bill, it would preserve Mass Save budgets. Its energy efficiency proposal would reform payments to utilities and implement oversight and administration reforms.
The Senate's oversight proposal would create a new, secondary financial review board overseeing Mass Save reforms in addition to the existing MA Energy Efficiency Advisory Council (EEAC) and Department of Public Utilities (DPU). The House version also included an oversight change, proposing a requirement that the inspector general investigate the administration of the Mass Save program. Both proposals would add unnecessary and duplicative oversight of Mass Save that already exists through the EEAC and DPU.
The Senate bill would also establish a prescriptive cap on Mass Save's program planning and administration budgets, limiting them to 5% of total expenditures. While states define planning and administration differently, a national review of efficiency programs found that administration, marketing, and outreach costs typically range from 14% to 45%, depending on the program type (see LBNL study). This contrast underscores how restrictive a 5% cap could be.
Income verification proposal would reverse progress on energy justice
Energy affordability is the driving factor for policy reforms, yet an element of these proposals related to income eligibility requirements would roll back efforts to reach more customers with energy upgrades that can lower bills.
Massachusetts recently advanced energy justice through stronger stakeholder engagement and more participatory planning. Acting on this stakeholder engagement in the most recent three-year energy efficiency plan, Mass Save expanded no-cost services for moderate-income households by allowing income self-attestation.
The income self-attestation policy was adopted for these no-cost programs after program administrators found that documentation requirements were discouraging participation, especially among renters, households with irregular income, and people with limited English proficiency. The policy still includes safeguards: households that later sought other enhanced moderate-income incentives would complete formal income verification.
Both the House and Senate proposals would reinstate income verification for some moderate-income customers who currently qualify for Mass Save through self-attestation, particularly those in designated equity communities. These communities are generally lower-income areas with a high share of residents who have not previously been served by Mass Save. The change could again exclude moderate-income households, and landlords would need to show that at least 50 percent of renters' incomes qualify for the building to be eligible.
This proposed requirement is unnecessary and would create a significant administrative barrier (and related costs) to serving the customers most at risk.
Many proposals are under consideration to improve energy affordability
The omnibus energy bills include a wide range of proposals intended to lower energy costs, protect consumers, and modernize the Commonwealth's energy system.
A few examples in the Senate proposal include phasing out the Gas System Enhancement Plan - a program designed to repair or replace aged gas infrastructure - which is projected to save $1.46 billion; a review of utility return on equity; and establishing heat-season shutoff protections for consumers. Both Senate and Governor's proposals would authorize securitization, i.e., rate reduction bonds as a tool to lower consumer costs (see NEEP post).
Notable provisions in the Senate and Governor's bills that would bolster demand-side resources including:
- Promoting virtual power plants to reduce peak load.
- Codifying building decarbonization as a goal of Mass Save.
- Streamlining program administration by moving all efficiency programs under electric utilities to reduce the number of program administrators and lower costs.
Codifying building decarbonization as a Mass Save goal would align with the state's climate priorities. However, the Senate proposal could also remove the requirement that Mass Save's greenhouse gas (GHG) targets be set by the executive branch during plan development. Under the 2021 Climate Law, each three-year plan must meet a GHG reduction target tied to the Commonwealth's long-term emissions limits and the Secretary of the Executive Office of Energy and Environmental Affairs (EEA) establishes that target early in the planning cycle so it can guide program design. The Senate proposal appears to eliminate this step, requiring the EEA Secretary to set the GHG reduction only after the three-year plan has already been approved by the Department of Public Utilities. This change would make it unclear how Mass Save's savings targets should be established.
Both the House and Senate proposals direct utilities to develop inclusive utility investment (IUI) programs, which let customers pay for efficiency upgrades through an electric-bill tariff. The House bill would require a program by 2028 and the Senate bill by 2029. Also known as on-bill tariffs, IUI can reduce reliance on ratepayer incentives while offering low- or no-upfront-cost options. Because payments and upgrade benefits stay with the meter if a customer moves, the model can lower participant bills and reduce system costs by avoiding infrastructure spending. Strong customer protections will be essential to ensure clear expectations and cost safeguards.
The choice ahead
While most state legislatures have adjourned for the year, Massachusetts lawmakers are still negotiating bills on top-priority issues, including energy affordability. Due to a rule change this session, legislators can continue working on priorities throughout the fall. The Senate bill was reported by the Senate Ways and Means Committee as a redrafted version of the House-passed bill, leaving the two chambers now to reconcile their energy affordability proposals.
As those negotiations continue, lawmakers have a clear opportunity to pursue policies that lower energy costs while preserving the programs that deliver the greatest value to customers. Energy efficiency remains one of the Commonwealth's most cost-effective tools for reducing energy bills and advancing clean energy goals. Strengthening – not scaling back – programs like Mass Save will help ensure Massachusetts residents and businesses benefit from both immediate savings and long-term resilience.
