Are you tired of sky-high utility bills that seem to climb higher every year? You're not alone. Massachusetts residents are feeling the pinch, and the pressure is on for state regulators to find solutions fast. In an exclusive interview, the incoming head of the Department of Public Utilities (DPU) addressed these concerns amidst growing public frustration.
Just a day after Governor Maura Healey urged state regulators to explore every possible avenue for reducing gas and electric rates, Jeremy McDiarmid, the soon-to-be chair of the DPU, spoke with NewsCenter 5's Ben Simmoneau. His arrival comes at a critical time, as the DPU faces a rapidly approaching November 1st deadline to approve winter gas rates – rates that could very well increase, leading to yet another season of exorbitant heating costs.
Governor Healey has sent a direct message to the DPU in the form of a letter, demanding a meticulous, line-by-line review of every charge on state gas and electric bills. The goal? To identify charges that can be eliminated, reduced, or have their impact lessened on consumers. This is a big task, considering the complexity of utility billing. Think of it like forensic accounting, but for your energy bill.
"We're grateful for the governor's letter. We agree that energy affordability is a huge issue across the commonwealth," stated McDiarmid. "We're going to make sure that we continue to keep the consumers in mind and energy affordability as a top priority." This sounds promising, but can he deliver?
McDiarmid's background is in clean energy lobbying, a field often at odds with traditional utilities. He joined the commission just a month prior to this interview and is set to become chair on October 20th. His appointment, along with another new commissioner, came suddenly this summer, a direct response to the shockwaves caused by soaring gas and electric rates, particularly during the brutally cold winter months.
But here's where it gets controversial... Simmoneau directly confronted McDiarmid with a tough question: "Eversource and National Grid -- both companies -- have been granted year after year of pretty big rate increases. Were mistakes made by DPU in granting those rate increases?"
McDiarmid responded cautiously, "I can't speak to what happened before my time. Our job is to make sure that what we're doing is protecting the consumers, scrutinizing every single line item, and making sure that consumers get the reliable service they deserve for the lowest possible price." It's a standard answer, but does it sidestep accountability for past decisions? What do you think?
Whether that's currently happening is certainly debatable. State-mandated fees are a significant contributor to the skyrocketing delivery charges on your utility bills. These fees, in part, fund programs like Mass Save, which aims to promote energy efficiency (more on that later). But another major cost driver is the Gas System Enhancement Plan (GSEP). This state-designed program is intended to replace aging gas pipes. And this is the part most people miss... utilities are allowed to profit from it! GSEP's expansion is especially perplexing, considering the state's broader objective of phasing out natural gas in residential homes. Isn't it counterintuitive to invest heavily in gas infrastructure while simultaneously trying to move away from it?
Eversource, one of the state's largest utility providers, is now seeking DPU approval for a 13-17% rate hike this winter, citing infrastructure costs as the justification. This request comes on the heels of already painful rate increases.
Simmoneau pressed McDiarmid: "Given how high bills got last winter, what's your reaction to Eversource coming back this winter and asking for another double-digit rate increase?"
McDiarmid responded, "It's a pending proceeding in front of the department, so I can't talk much about it. But again, we are going to scrutinize everything that comes before us and make sure that only those costs that are in the interest of the customer are those that we approve." This raises a critical question: how does the DPU define "in the interest of the customer," and how rigorously will they apply that standard?
Adding fuel to the fire, Eversource's gas profit surged by a staggering 29% last year following previous rate hikes. Furthermore, Eversource CEO Joe Nolan has consistently ranked among the nation's highest-paid utility executives, earning $12.9 million in 2022, $18.9 million in 2023, and $13.6 million in 2024. Should executive compensation of this magnitude be a factor in the DPU's rate decisions? It's a question that resonates with many consumers who feel they are bearing the brunt of these costs.
Simmoneau directly asked if CEO compensation should be a factor. McDiarmid answered, "Again, we look at what comes before us. I understand that the governor's [energy] bill would give us more flexibility to look into such matters, and if that is to pass, we will certainly look hard at that as well." In other words, the DPU's ability to consider executive pay in rate decisions may depend on future legislation.
Finally, let's revisit Mass Save. The program has ballooned since its inception 15 years ago, reaching a staggering $4.5 billion this year. While this represents a slight reduction from the utilities' proposed $4.99 billion, it's still a massive investment, funded in part by those state-mandated fees on your bill. McDiarmid maintains confidence that the money invested in Mass Save is wisely spent, but emphasizes the need for limits and careful oversight.
"The department in the spring trimmed the budget of Mass Save to send a signal to the program administrators — the utilities and the Cape Light Compact — that the budgets for that are not unlimited," he explained. "We need to make sure that we're scrutinizing those dollars to make sure that they're well invested." The key takeaway? Even well-intentioned programs require diligent monitoring to ensure they are truly delivering value to consumers.
So, what are your thoughts? Are you optimistic about the DPU's ability to control rising utility costs? Do you believe programs like Mass Save are worth the investment? And most importantly, how should executive compensation factor into the equation? Share your opinions in the comments below!
