If you’re shocked by your electric bill you’re not alone. Here are six reasons your Massachusetts electric bill is sky-high:

1. Limited Gas Supply But Rising Demand

This situation follows a basic principle of economics: when supply is fixed and demand rises, price goes up.

Massachusetts uses more natural gas than any other state in New England to generate our electricity and heat homes. Due to its geographic location, Massachusetts cannot drill for natural gas locally. Instead, the state relies on natural gas transported through thousands of miles of underground pipelines from other states. This transportation adds costs that states with local drilling like Texas, Louisiana, or Pennsylvania, do not face.

Additionally, the number of gas pipelines is limited. This means that regardless of increasing demand, the supply of natural gas to Massachusetts remains constant.

Every time a new construction home is built or electricity power plant is constructed, the demand for natural gas increases. Massachusetts sees an average of 15,000 to 20,000 new construction homes each year. With each new property, the price of natural gas increases.

Massachusetts is also competing for natural gas with other states in the region. Added demand in states like Rhode Island, New York, or New Hampshire impacts the price of electricity Massachusetts pays as well.

2. Massachusetts Is Extremely Regulated

More regulations means utility companies must hire more people. Increased expenses for utility companies cause the price of electricity to go up.

Massachusetts is one of the top ten most regulated states according to US News. These extensive regulations significantly contribute to higher electric bills.

Every regulation requires employees to implement and enforce it. These tasks need to be planned, executed, and monitored by full-time, salaried utility workers.

Often, the individuals in these positions are not earning minimum wage. They are lawyers, consultants, officers, and other highly educated and highly salaried workers. The only way to cover these costs is through the price of electricity.

You might notice various charges on your electric bill, such as “Renewable Energy” charges or “Distributed Solar” charges. These are examples of government regulations contributing to the high price of electricity in Massachusetts.

3. Utility Companies Are Monopolies

Three major utility companies saturate the market and own nearly all of the infrastructure. Since there is no competition, there’s no pressure to lower electricity rates.

In Massachusetts, only three utility companies dominate the market: Eversource, National Grid, and Unitil. While Unitil serves close to 100,000 residents, Eversource and National Grid serve the majority of the remaining 7 million people in the state.

Municipal Light Plants (MLPs) are trying to balance this by providing their own electricity services to their residents. However, as of 2024, only about 14% of towns offer MLPs, leaving Eversource and National Grid with a significant hold over the population.

Utility companies also control 97% of the infrastructure that transmits and transports electricity in the country: transmission lines, transformers, utility poles, etc. This makes it extremely difficult for new utility companies to enter the market and compete.

With little competition, existing utility companies have little incentive to lower their prices. They are not significantly threatened by MLPs or third-party electric suppliers. This monopoly in the utility industry means higher prices for consumers with few alternatives.

4. Well-Overdue Infrastructure Upgrades

Aging utility infrastructure is unable to meet the energy demands of a 7 million person population.

Boston, MA was one of the first cities to get electricity back in the 1800s. Since then, only minor upgrades have been made to our electrical system. As a result, much of our infrastructure consists of the oldest electrical equipment in the country. These systems are now tasked with powering the third most densely populated state in America and are struggling to keep up.

Every infrastructure upgrade that has been made was funded by increasing the price of electricity. Consumers bear the cost all utility company operations, including upgrades and maintenance, staffing and personnel, regulation compliance, research and development, and more. The price of electricity is directly linked to the overhead costs of utility companies.

5. Premium Labor Costs for Utility Workers

High labor costs are passed onto consumers, making electricity more expensive compared to states with lower labor costs.

Massachusetts ranks third in the country for the highest labor costs. In the utility industry, coastal states with strong unions and higher education rates contribute to premium wages for utility workers. On average, a utility worker’s salary at Eversource exceeds $100,000. In contrast, Utah, the state with the lowest electricity rate as of 2024, has an average utility worker salary of about $49,000.

Massachusetts utility workers also benefit from robust pension programs upon retiring. Many of these programs guarantee pay for the rest of their lives. These wages and pensions represent significant expenses for utility companies, which subsequently raise the price of electricity to cover these costs.

6. Year Round Intense Energy Demand

The need for continuous heating or cooling of homes means that energy consumption remains high, driving up the overall demand for electricity and contributing to higher electricity costs.

In the Northeast region, either heating or air conditioning is needed nearly every day to keep homes at a comfortable temperature. Brief periods during the fall and spring may not require these devices, but the region experiences very cold winters and very hot summers. This results in the persistent demand for energy.

In contrast, other states, like Florida, do not need to worry about heating in the winter. While Florida does have hot summers that spike energy demand for air conditioning, temperature control is largely unnecessary for the other half of the year.

On the chart below, the red bars represent temperatures that are higher than comfortable room temperature range (between 68 and 72 degrees) and warrant the use of air conditioning, blue represents temperatures that are lower than comfortable room temperature and warrant the use of heat, and the green bars represent temperatures that fall within the comfortable room temperature range. As shown, only two months of the year averaged comfortable room temperatures and AC or heat were required for the others.

What Can You Do to Lower Your Electric Bills?

Use Less Electricity

One way to reduce your electric bill is to decrease how much electricity you use. This can be achieved by making changes to your home and energy habits. A home energy audit is a great place to start. A professional assessor can tell you what areas of your home are using the most energy and how you can manage them. Upgrades like improving insulation, installing energy-efficient windows, investing in energy-efficient appliances, and switching to LED lights can help, but these measures will only take you so far. You’ll still be subjected to rate changes and you’ll still be pulling all your energy from the grid.

Switch to a Third-Party Supplier

Massachusetts is a deregulated market and allows consumers to choose their electric supply company. Third-party suppliers may offer lower, fixed rates or renewable energy options. If you choose to switch to a third-party supplier, your local utility company will remain responsible for delivering the electricity and handling outages. Your bill will reflect a delivery charge from your utility company and a supply charge from your third-party supplier. You should carefully evaluate and thoroughly read offers from third-party suppliers before making the switch.

Get Solar Panels

The only way to significantly decrease and often eliminate your electric bill is to live off a private energy source like a solar panel system. Solar energy is accessible, affordable, and consistently reliable. Photovoltaic technology is powered by the most abundant renewable energy source in the universe: the sun. Taking advantage of the sun’s ample power allows people to live more independently from the grid.

Embrace Solar for Energy Independence

If you’re sick of absurd electricity rates in Massachusetts and want to start generating your own electricity with solar panels, we are here to help. Give us a call at (508) 717-3820 or fill out the form below and we’ll reach out to you.