An Act protecting consumers from unreasonable utility rate increases

194th Legislature (2025-2026) Introduced by Jo Comerford and 3 co-sponsors

The bill caps utilities’ allowed return on equity in base-rate cases to the four-year average ROE of neighboring states, reducing potential rate increases for consumers.

Overview

Bill number/title: SD 2145, "An Act protecting consumers from unreasonable utility rate increases"

Status: Proposed bill

Introduced: November 29, 2025

Subject area: Telecommunications, Utilities, and Energy

Primary sponsor: Senator Joanne M. Comerford; co-petitioners include Steven G. Xiarhos, John C. Velis, and Adam Gómez

Purpose and intent

The bill seeks to limit the level of allowed returns on equity (ROE) that Massachusetts electric and gas utilities may earn in base-rate proceedings. By tying the permitted ROE to the average ROE approved in neighboring states over the previous four years, the measure aims to restrain rate increases that result from higher utility profits, thereby protecting consumers from “unreasonable” rate hikes.

Key provisions

Insertion of new Section 94J into Chapter 164: The bill adds a new provision governing base-rate proceedings before the Department (under section 94) for electric and gas utilities.

Section 94J(a) – ROE cap:

In any base-rate proceeding, the Department may not approve an allowed ROE higher than the four-year average of ROEs approved in neighboring states (Connecticut, Rhode Island, Maine, Vermont, New Hampshire).
A waiver to exceed this cap is permissible only if there is a specific showing that the constitutional rights of the electric or gas company would otherwise be violated.

Section 94J(b) – Exclusions from ROE calculations:

The determination of the allowed ROE shall not include compensation related to programs under section 21 of chapter 25 or any performance incentives designed to promote the efficient, clean, and reliable operation of the electric or gas system.

Section 94J(c) – Definition of “neighboring states”:

The term refers to Connecticut, Rhode Island, Maine, Vermont, and New Hampshire.

Affected parties

Electric and gas utilities regulated by the Massachusetts Department of Public Utilities (DPU): Subject to a potentially lower ROE in base-rate cases.

Ratepayers/consumers: Potentially benefit from slower or reduced rate increases stemming from lower allowable ROEs.

Massachusetts Department of Public Utilities (DPU): Responsible for applying the new ROE standard in base-rate proceedings.

Industry investors and utility companies: May experience changes to allowed profitability and rate-case dynamics.

Procedural and timeline aspects

The proposal amends Chapter 164 by introducing new Section 94J, shaping how base-rate proceedings determine ROE.

The measure specifies that deviation from the cap requires a constitutional rights showing, introducing a higher evidentiary bar for waivers.

Neighboring-states comparator and four-year lookback period establish a clear, data-driven benchmark for ROE.

Potential impact

Potential reduction in the allowed rate of return for Massachusetts electric and gas utilities in future rate cases.

Expected moderation of customer bill impacts from rate increases, subject to the ROE benchmark and any waivers.

Clarification that incentive programs and certain compensation are excluded from ROE calculations, focusing ROE on base-rate components.

Bill