In the wake of skyrocketing energy costs over the past winter and the loss of federal support for state clean energy initiatives, Massachusetts policymakers are facing difficult questions about balancing decarbonization with energy affordability in the state’s 2025/26 legislative session.

Lawmakers have passed major climate and energy bills in each of Massachusetts’ past three sessions. Most recently the House and Senate agreed to compromise legislation after the conclusion of formal sessions in 2024, overhauling clean energy permitting and siting, updating utility regulations to enable gas pipe decommissioning and authorizing a sizeable procurement of energy storage resources. (See Mass. Clean Energy Permitting, Gas Reform Bill Back on Track and Compromise Climate Bill Finally Approved by Mass. Legislature.)

The two prior bills, passed in 2021 and 2022, included sector specific decarbonization targets, a new opt-in municipal building code, authorization for offshore wind procurements, electric vehicle rebates and EV sales mandates.

Sen. Mike Barrett (D), co-chair of the legislature’s Joint Committee on Telecommunications, Utilities and Energy (TUE), told RTO Insider his “first priority is to make sure Massachusetts emerges from the Trump years with its climate capacity intact.”

“We are basically trying to change over an entire economy,” Barrett said. He added the state should avoid “unintentionally paralleling federal cutbacks with cutbacks of our own. We can’t compensate literally for the missing federal dollars, but we want to sustain a very serious state effort, rather than throw up our hands.”

If the Trump administration prevents additional offshore wind procurements, Massachusetts should consider focusing its efforts on rooftop solar, which does not rely on federal approvals, Barrett said. He added the state’s decarbonization strategy is meant to be flexible, and the state could amend its clean energy procurement laws to readjust its strategy.

Barrett also emphasized the importance of maintaining sources of work for the state’s clean energy workforce throughout President Donald Trump’s second term, and that pivoting toward distributed energy resources could help provide these opportunities.

“You might concede that Trump can slow you down, but you don’t want to give him the opportunity to destroy the effort altogether,” Barrett said.

Rising Energy Costs

The winter of 2024/25 was the first since 2014 to feature sustained below-normal temperatures, driving a significant increase in natural gas prices and demand. On Feb. 1, gas supply rates increased 16 to 22% for customers of the state’s investor-owned gas utilities. The supply rate increase coincided with increased delivery fees, which were caused in part by adjustments to the Mass Save efficiency program and continued investments to repair and replace leaky pipes.

High residential energy costs caused significant public pressure on state officials to provide ratepayer relief, and the Department of Public Utilities required temporary reductions in delivery fees and ordered $500 million in cuts from the 2025/27 plan for Mass Save “to protect ratepayers from excessive bill impacts.” The Mass Save cuts drew some criticism from clean energy advocates, who argued the move would hurt ratepayers in the long run.

Meanwhile, Gov. Maura Healey (D) announced in March an “energy affordability agenda,” returning to ratepayers $125 million in funds collected from alternative compliance payments for state clean electricity standards. Healey also committed to filing “an energy affordability and independence bill to explore new ways we can make Massachusetts more affordable.”

Residential Competitive Supply Ban

Heightened attention on energy costs may boost efforts to ban competitive residential electricity suppliers, a proposal that fell short in the negotiations for the 2024 compromise bill. Healey, the Office of the Attorney General (AGO), the city of Boston and top senators all expressed support for a ban during the session, but the proposal ultimately was derailed by opposition in the House.

Competitive suppliers in the state currently are allowed to market directly to ratepayers, and the state has struggled to prevent predatory suppliers from locking customers into deceptive and expensive supply contracts. Supporters of the industry have argued that predatory practices can be addressed through reforms, while critics have argued that a ban is the best way to protect consumers.

“I don’t think any of us are backing off on the determination to bar competitive suppliers from selling to low-income households door to door,” Barrett said.

A 2024 report by the AGO estimated that residential customers of competitive electricity suppliers paid over $577 million more than basic utility service customers over an eight-year period. The report also found that “low-income consumers and people of color continue to suffer a disproportionate amount of the consumer harm.”

Larry Chretien, executive director of the Green Energy Consumers Alliance, said a ban is “is likely the easiest thing to do to make energy more affordable, because it doesn’t require taking money from one account … it doesn’t require tax dollars, and it doesn’t require raising one person’s rate to lower another person’s rate.”

“We’re going to hope that the House takes an open-minded view of this,” Chretien added.

Utility Reforms

While lawmakers and advocates are quick to support the idea of energy affordability, in practice, the concept can motivate widely ranging policies with varying effects on decarbonization efforts.

Kyle Murray, director of state program implementation at the Acadia Center, said he would like to see the energy affordability bill include limits on utilities’ return on equity, potentially restricting ROE to an average of the surrounding Northeast states.

“Our position has long been that utility return on equity is really inflated and could serve to come down a few points,” Murray said, while also acknowledging that passing ROE reforms would be challenging due to the complexity of utility ratemaking and likely opposition from investor-owned utilities.

Murray also said he hopes lawmakers will consider changing the funding mechanism for some programs currently funded through volumetric charges in electricity and gas rates. He said funding programs like low-income discounts, Mass Save and renewable energy charges through fixed bill charges or through the tax base could save most ratepayers money.

He also expressed interest in legislation limiting the expansion of the state’s gas network, a priority shared by Mass Power Forward, a large coalition of climate and environmental justice groups.

One of the main bills backed by the coalition would prohibit the state Energy Facilities Siting Board from approving new fossil infrastructure within five miles of state-designated environmental justice communities. The group also is pushing for legislation to prevent utilities from using ratepayer funds to cover the costs of industry associations, lobbying activities and promotional advertising.

Mass Power Forward coordinator Claire-Karl Müller said lawmakers should address utility incentives that encourage expansion of the gas network and undermine Massachusetts’ decarbonization mandates and long-term strategy to reduce gas reliance. (See Massachusetts Moves to Limit New Gas Infrastructure.)

“If you’re in a hole, stop digging,” Müller said. “We have to stop expanding the gas system immediately.”

The coalition’s other priorities include a proposal to make fossil fuel companies pay for the costs of climate resilience through a “climate change superfund,” as well as new outdoor and indoor air pollution protections for vulnerable communities.

Looking Forward

The state is in the early stages of its 2025/26 legislative session, which will conclude at the end of July 2026. Lawmakers already have submitted nearly 250 bills to the TUE committee, which has yet to begin bill hearings.

The House TUE co-chair, Rep. Mark Cusack (D), is new to the committee this year, and it remains to be seen whether his priorities will differ from Rep. Jeff Roy (D), who served as the House co-chair from 2021 through 2024. Roy was not reappointed to the committee after the Boston Globe reported he had a romantic relationship with a lobbyist working for clients regulated by the committee, including a third-party electricity supplier.

While no longer serving on the TUE committee, Roy has been appointed to House leadership by speaker Ron Mariano (D) and could remain an influential voice in the House on energy issues. Neither Cusack nor Roy responded to requests for comment.

Meanwhile, the Healey administration is expected to file energy affordability legislation in the near future, which should help define the scope of the legislature’s discussions and negotiations on climate and energy issues.

A spokesperson for the Massachusetts Executive Office of Energy & Environmental Affairs said Healey soon will “file an energy affordability and independence bill to explore new ways we can make Massachusetts more affordable,” adding that the administration “will use every tool we have to help make sure families and businesses can afford to heat their homes and keep the lights on.”