Clean Energy & Lower Costs: Understanding Governor Healey’s Energy Affordability Bill

Blog
By Sophia Gosselin-Smoske

Energy affordability has emerged as a top policy priority across New England, especially following a winter of sharply rising energy costs spurring widespread concern. In response, Massachusetts Governor Maura Healy issued a $50 credit to all residential customers of investor-owned utilities, an immediate action paired with a broader commitment to advance long-term solutions. Delivering on that promise, Governor Healey introduced H.4144, “An Act Relative to Energy Affordability, Independence, and Innovation.” This sweeping bill aims to lower energy costs for ratepayers and generate more than $10 billion in savings over the next decade. Many of the bill’s provisions would hold relevance to non-profits and public sector organizations in Massachusetts, working to meet their clean energy and cost-saving goals.

The following sections break down key components of the bill, including reforms to major state energy programs, pathways to reduce ratepayer costs, expanded access to clean energy, and clearer steps towards a modernized grid to help stakeholders understand how this legislation could affect their energy planning and priorities.

Table of Contents

Energy Program Reform

Mass Save

The Governor’s Energy Affordability Bill (the bill) proposes major updates to the Mass Save Energy Efficiency Program to better align with the state’s climate goals and improve access for low- and moderate-income customers. Key changes include:

  • Centering building decarbonization and load management as the primary focus; shifting from solely energy efficiency.
  • Removing gas utilities from administering the program and phasing out incentives for fossil fuel equipment. Instead, electric utilities and municipal aggregators would solely oversee implementation, but gas utilities would still be required to provide funding and resources through 2040.
  • Changing program oversight from the Energy Efficiency Advisory Council (EEAC) to the Building Decarbonization Advisory Council (BDAC). This transition would preserve the EEAC’s existing structures while shifting the group’s focus to match that of the revised Mass Save plan.
  • The Department of Energy Resources (DOER) would assess the state’s remaining decarbonization and energy efficiency potential to help shape future incentives.

While these changes would reduce incentives for efficient gas technologies, they would also open new opportunities for affordable clean energy, including for nonprofits and public entities. Exceptions to the discontinuation of fossil fuel investment would be made for low-income households, emergency facilities, hospitals, or hard to electrify uses.

Solar

Consolidated Applications

The bill would require the DOER and investor-owned utilities to develop a single, streamlined application for distributed generation (e.g. solar) and storage systems. This common application would cover interconnection, net metering, and incentive program participation, reducing paperwork, delays, and administrative costs, overall saving time and resources.

SMART Program & Net Metering

The bill would repeal outdated solar incentive laws and formalize the Solar Massachusetts Renewable Target (SMART) program as the state’s primary solar incentive tool. The bill also would require the SMART program to implement a new, flexible incentive model, supporting the state’s climate goals while prioritizing ratepayer costs. Additionally, the SMART program would now account for project development and interconnection costs. While the program structure would be re-evaluated every three years, program incentives would be assessed and changed annually to align with market conditions. These changes have largely already been implemented through the most recent iteration of the SMART program regulations, released on June 20, 2025.

The bill additionally would mandate that all net-metered solar facilities be enrolled in the SMART program starting in 2026 and reform net metering compensation for solar systems that are interconnected starting in 2026 (excluding residential, rooftop, and cap-exempt facilities).

This requirement would impact those who prefer to retain ownership of their Renewable Energy Certificates (RECs) to meet local climate laws, such as Boston’s BERDO or Cambridge’s BEUDO. This could limit flexibility in how local solar projects are used for emissions’ compliance.

Alternative Portfolio Standard Repeal

The bill would repeal the state’s Alternative Portfolio Standard (APS), like the Renewable Portfolio Standard (RPS), requiring a 0.25% increase each year of eligible technologies into the state’s energy portfolio. APS technologies include:

  • Heat pumps (air and ground source)
  • Solar thermal
  • Deep geothermal
  • Combined heat and power plants (CHP)
  • Fuel cells, and more.

This repeal would take effect in 2028 and would instruct DOER to manage a smooth transition for qualified generating units, giving the market time to adjust.

While repealing the APS could slightly lower overall electricity supply costs, it would also reduce support for technologies that have helped institutions meet their decarbonization goals.

Affordability

On Bill Financing

Another beneficial provision in the bill would introduce a Pay-As-You-Save (PAYS) or on-bill financing mechanism to help customers afford the upfront cost of clean energy and efficiency upgrades they otherwise couldn’t. This program would allow utility off-takers to finance improvements, such as heat pumps, insulation, or solar, through a line item on their utility bill. Repayment would be offset by energy savings generated through the invested project, bringing overall net savings on their utility bill. Directed to be available by January 1, 2028, the program would be funded through utility distribution rates.

This is a highly promising tool to expand access to energy-saving technologies, particularly for nonprofits and public entities who have limited capital to spend on larger projects.

Holistic Tariff Review

The bill would direct the DPU to undertake a comprehensive review of how utilities recover costs from customers across all utility tariffs (e.g. energy efficiency, renewable energy) to develop a new cost recovery framework by 2028 that aligns with modern grid planning and can reduce reliance on reconciliation charges.

The review proposes to consolidate line items on utility bills and prioritize transparency through stakeholder input.

The bill would also require a closer look at how utility costs are passed on to customers by July 2026, including exploration of alternatives to volumetric bill charges ($/kWh) to prevent large monthly swings in costs, enabling more consistent and predictable utility costs throughout the year.

These reforms would offer a promising path toward more affordable and stable energy costs, especially for nonprofits and public institutions that need budget predictability to plan energy investments.

Access to Clean Energy

Public Entity Procurement

The bill would clarify the General Law enabling nonprofit and public entities to collectively purchase electricity, gas, and related energy services through a public instrumentality. This group buying approach lowers costs, enhances consumer protections, and supports long-term energy planning. While the law was originally enacted with flexibility for evolving energy services, ambiguous language has hindered the adoption of newer technologies, like solar, battery storage, and EVs, particularly at the municipal level. The proposed amendment would clarify to explicitly support deployment of clean energy technologies aligned with the Commonwealth’s Clean Energy and Climate Plan.

This update would empower energy-buying consortiums, like PowerOptions, to provide affordable energy services to its Members, helping to accelerate decarbonization and promote energy savings.

DOER Clean Energy Procurement

The bill would create a new Division of Clean Energy Procurement, responsible for coordinating the state’s efforts to buy clean energy services (e.g. demand response, transmission, energy storage, etc.) and related environmental benefits (e.g. renewable energy credits). This change would enable Massachusetts to meet its ambitious climate goals through strategic purchasing of renewable electricity. Additionally, the bill would set a target for Massachusetts to procure more than 10 gigawatts of offshore wind power by 2040, with expanded opportunity for municipal and non-governmental participation in procurements. These changes would influence long-term electricity pricing, future infrastructure investments, and expand opportunities for broader participation in the clean energy transition.

These provisions would represent a positive step for PowerOptions’ Members, enabling them to bring currently available renewable energy (like solar) online more quickly and creating new opportunities to access offshore wind, ultimately diversifying the clean energy resources available to their communities.

Landlord Sub-Metering for Electrification

The bill would authorize landlords of multi-family residential buildings to use certified energy monitoring systems for building-wide clean heating and cooling systems to bill tenants based on their individual energy use. Landlords would be allowed to apply savings from on-site renewable energy to reduce tenants’ bills, paving the way for a more equitable integration of clean energy in rental housing.

This would be especially impactful to affordable housing providers, enabling them to adopt building-wide clean energy technologies while delivering cost savings to the residents who need them most.

Renewable Natural Gas

The bill would authorize commercial and industrial customers to procure renewable natural gas (RNG) (e.g. anaerobic digestion or landfill gas capture). Through bilateral agreements with their utility, these customers would now be able to invest in RNG systems, if costs are not shifted to non-participating ratepayers.

This provision would be particularly beneficial for medium-to-large energy users (i.e.  municipal buildings, colleges, and healthcare facilities) to decarbonize hard-to-electrify loads (e.g. Combined Heating and Power (CHP) plants).

Innovation & Grid Modernization

Comprehensive Load Management

The bill would expand the scope of the utilities’ Electric Sector Modernization Plans (ESMPs), which guide the transition to a cleaner, more resilient, and equitable electric grid. New requirements would mandate a comprehensive guide to future grid infrastructure development, designed to accommodate projected demand, support clean energy goals, and maximize ratepayer savings. Some load management strategies that would be considered include virtual power plants and flexible interconnection.

Additionally, the ESMPs would now include climate risk assessments, adaptation plans, meaningful community engagement, third-party review, and clear implementation timelines. Utilities would submit updated ESMPs reflecting these additions within one year of the bill’s passage.

Once implemented by each utility, these strategies would modernize the grid, enhance its resilience, and better support the state’s growing renewable energy resources, delivering long-term savings and benefits to all residents of the Commonwealth.

Flexible Interconnection

To help accelerate clean energy development while managing costs, the bill proposes a Flexible Interconnection Program, a new approach designed to connect more renewable projects without expensive infrastructure upgrades. Currently, the grid does not allow new solar or other energy projects to connect to the grid if the project would overload the system for an hour or more a year. Adding these new systems requires costly and time-consuming grid upgrades.  Flexible interconnection would accelerate clean energy installations and reduce costs for developers and ratepayers alike by enabling targeted curtailment (temporarily reducing or pausing energy flow) when the grid is most strained. By adjusting system behavior, more clean energy would become operational faster and at a lower cost.

The implementation of a flexible interconnection program would mean accelerated and more affordable interconnection pathways to bring clean energy projects online sooner, helping institutions save money and contribute to their climate goals.

Geothermal

The bill would significantly expand the role of gas utilities in delivering thermal energy, particularly through geothermal networks. Gas companies would now be permitted to make, sell, and distribute geothermal energy to both large-scale networks and individual customers, so long as reasonable benefits are delivered to ratepayers. These changes build on the state’s 2024 Climate Act and signals a long-term shift from natural gas to cleaner heating alternatives.

Additionally, the bill would also initiate a formal investigation into expanding geothermal access for municipalities currently without natural gas service. If approved, gas companies could build and maintain geothermal systems for individual customers in these areas, benefiting schools, hospitals, and other large campuses.

These provisions would expand geothermal access for our Members who lack upfront capital to invest in thermal resources, supporting their decarbonization goals. Utility oversight would also eliminate the burden of system maintenance that would also prevent our Members from investing in successful long-term thermal networks.

Microgrids

The bill would make it significantly easier for government and critical facilities (e.g. hospitals, schools, water treatment plants, and municipal buildings) to develop and operate microgrids within investor-owned utility territory. The bill would authorize these systems to be built across public rights-of-way, provided they don’t shift costs to other utility customers, improving

accessibility and feasibility. The program would intend to be operational by mid-2027.

This program would be highly valuable for municipalities, healthcare facilities, and schools, as it would provide a pathway for these entities to invest in microgrids, enhancing their energy resiliency, and aligning with the state’s clean energy goals.

Nuclear

The bill would repeal a longstanding law that requires statewide voter approval before any new nuclear power facility could be developed in Massachusetts.

While new projects would still need to undergo rigorous municipal, state and federal permitting, removing this requirement would clear a major hurdle for consideration of small modular nuclear reactors, an emissions-free, localized energy source.

What’s Ahead

The bill has initiated the legislative process, with a public hearing held on June 25, 2025. Municipal leaders, college representatives, and clean energy advocates shared both support and concern about various provisions of the bill.

In the months ahead, lawmakers will propose changes, debate, and vote on the contents of the bill. If the two chambers (the House & Senate) pass different versions, a small group of legislators will meet to find a compromise. Once agreed upon, the final bill will go to the Governor to be signed into law, realizing these beneficial changes.

Although the official deadline to pass bills for this legislative session is July 31, 2026, new legislative rules allow lawmakers more flexibility to continue working beyond this deadline.

Stay Connected and Informed

At PowerOptions, we are excited about the potential impact of these measures on our Membership and the Commonwealth’s energy landscape. We will continue to monitor the regulatory process closely to ensure these provisions deliver meaningful benefits and help our Members achieve their clean energy goals
If you have questions about what these legislative changes mean for you, we’re here to help. Contact our Regulatory and Policy Analyst, Sophia Gosselin-Smoske, at sgosselinsmoske@poweroptions.org.

We'll contact you shortly.