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Bill

SD 1986

An Act relative to fair and stable utility pricing

194th Legislature (2025-2026) Introduced by Paul Mark and 1 co-sponsor

Imposes an inflation-based cap on standard service electricity rates and adds strict, public, regulator-approved oversight for rate increases.

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Bill Summary · SD 1986

Summary: An Act relative to fair and stable utility pricing (Senate Docket No. 1986)

Status: Proposed bill (introduced in the 2025-2026 General Court). The bill was introduced in Senate on November 29, 2025 (S. 1986) and previously filed in the 2023-24 session as S.2149. The text provided reflects amendments to Chapter 164 of the General Laws.

Purpose and intent

  • Establish fairer and more stable pricing for electricity customers by limiting rapid rate increases and imposing a formal oversight framework for electric utility pricing.
  • Introduce performance-based rate mechanisms to align costs with service quality and reliability.
  • Increase transparency and public participation in rate-setting processes.

Key provisions and changes

Section 1: Inflation cap on standard service transition rates

  • Amends Chapter 164, §1B(e) to implement an inflation-based cap beginning March 1, 2026.
  • The total, average rates for distribution company customers on standard service transition rates may not exceed an annual inflation cap equal to the prior year’s CPI growth as published by the U.S. Bureau of Labor Statistics.
  • The rate reduction and inflation cap must be implemented, reviewed, approved, and enforced under the department’s rules and regulations, with the goal of maintaining the economic value of the reduction during the standard service transition rate period.

Section 2: New rate-increase approval and public-notice process

  • Adds new Section 1B½ establishing a formal process for rate increases.
  • A rate increase (defined broadly to cover various charges and services) cannot be instituted without department approval and 60 days’ public notice.
  • Requires clear notice of proposed changes to the schedule and effective date.
  • The department must hold a public hearing, investigate the proposed changes, and can suspend the changes pending a decision.
  • After the last hearing, the department has up to 90 days to issue a final order; ongoing hearings may occur if proportional rate adjustments occur in the future (including possible reductions).
  • Local government involvement: upon notice of a proposed rate increase, the department must notify affected municipalities’ chief executives and publish hearing notices in local newspapers; hearings can be held in each city or town upon request.

Section 3: Promotion of performance-based rates

  • Amends Section 1E to empower the department to promulgate rules for performance-based rates for distribution, transmission, and gas companies.
  • Establishes service quality standards covering customer service, outages, infrastructure upgrades, repairs, maintenance, telephone and billing service, public safety, etc.
  • Requires benchmarks for employee staffing levels and training.
  • Clarifies that costs for advertising, promotional marketing, and charitable contributions cannot be included in the rate base.

Who is affected

  • Electric utilities (distribution, transmission, and generation/service providers) and retail customers in the Commonwealth.
  • Massachusetts Department of Public Utilities (or relevant energy department) as the primary regulator and administrator of hearings, orders, and rules.
  • Municipalities and their elected leaders, who must be notified of proposed rate changes and may host hearings.

Procedural and timeline aspects

  • Inflation cap effective March 1, 2026.
  • Rate increases require 60 days’ notice and department approval, plus public hearings.
  • Public hearing process: expeditious conduct, with 90-day post-hearing timeline for department orders.
  • Local notice requirements: municipalities must be informed; hearings may be held in affected cities/towns.
  • Performance-based rate rules would be promulgated by the department, with emphasis on service quality metrics and excluding certain costs from rate calculations.

Bottom line

The bill aims to stabilize utility pricing through an inflation-based cap on standard service rates and enhanced regulatory oversight of rate increases, while encouraging performance-based rate design anchored to service quality. It broadens public involvement in rate decisions and seeks to ensure that rate reductions remain in place during transition periods.

Compiled from official sources — confirm details with the bill’s official record.

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