Massachusetts Senate Bill S2238

Massachusetts 2025-2026 Regular Session

• Introduced: 2/27/25
• Refer: 2/27/25

Caption

Protecting consumers from unreasonable utility rate increases

Impact

If enacted, S2238 would amend Chapter 164 of the General Laws to include a new section that sets restrictions on how utility companies can set rates. This could lead to more competitive pricing for consumers and potentially lower utility bills. The law would necessitate that electric and gas companies provide justification for any higher returns, supporting accountability and transparency in rate setting. By limiting the allowed return on equity, the bill seeks to align Massachusetts utilities with those in nearby states, theoretically providing a cushion against unreasonably high rate increases.

Summary

Senate Bill S2238 aims to protect consumers from unreasonable utility rate increases by establishing regulations on the allowed return on equity for electric and gas companies. Specifically, it mandates that in any base rate proceeding conducted by the department overseeing these utilities, the approved return on equity cannot exceed the average approved in neighboring states over the past four years. This provision is designed to ensure that utility companies do not impose excessive costs on consumers while still maintaining appropriate profit margins.

Contention

Several points of contention may arise regarding this bill. Supporters may argue that it is a necessary step towards enhancing consumer rights and ensuring fair pricing in utility markets. They may highlight the need for consumer protection in the face of rising costs of living. On the other hand, opponents, including utility companies, could express concerns that such restrictions may hinder their ability to invest in infrastructure, leading to suboptimal service delivery and operational challenges. They might argue that the ability to maintain a higher return on equity is crucial for long-term sustainability and service reliability.