Massachusetts Cuts Energy Efficiency Program Budget by $500 Million to Lower Costs to Customers

The Massachusetts Department of Public Utilities on Feb. 28 ordered a $500 million reduction in budget for the 2025-2027 energy efficiency plan to limit costs to ratepayers. The three-year plan was proposed by the state’s electric and gas utilities and the Cape Light Compact, which administer the Mass Save energy efficiency program. Mass Save’s budget cut could decrease total residential program budgets by 25 percent for gas and 15 percent for electric. The program has saved 18 million megawatt-hours of annual electricity consumption for consumers since 2010, which has led to lower energy bills.

The department directed utilities to partner with the Energy Efficiency Advisory Council and the state legislature to find other sources of funding for Mass Save, so that the program does not rely entirely on customers for funding. As a result of the budget cut, the energy efficiency surcharge will be reduced on future residential customer bills. Currently, the surcharge is mentioned on electric bills but forms a portion of the delivery fee on gas bills. The department directed each gas company to list the surcharge as a separate line item on bills going forward in order to provide more transparency to gas customers on their bill components.

Every three years, utility companies work with the council and stakeholders to produce proposed energy efficiency strategies to reduce energy demand and consumption, and decrease energy costs for consumers. Last year, the state’s gas and electric distribution companies filed their 2025-2027 efficiency plans for the department’s approval.

Along with the budget cut, the department approved enhancements to strengthen Mass Save’s benefits for residents and businesses across the state. The 2025-2027 Plan also prioritizes environmental justice investments, expanding the definition of moderate-income customer to include more households that could benefit from the investments. In its order, the department also approved new electrification pool proposals to expand the deployment of energy-efficient heat pumps while minimizing the costs to consumers.