New England electricity customers could receive nearly $1 billion in refunds and see lower energy costs moving forward following a federal ruling aimed at reducing utility profits.
The Federal Energy Regulatory Commission’s decision lowers the return on equity, or profit, that transmission companies can earn on investments across the region.
Officials say the move comes after more than a decade of advocacy by the Massachusetts Attorney General’s Office and other regional partners. If upheld, the order is expected to result in about $900 million in refunds to ratepayers across New England and more than $100 million in annual savings. Massachusetts customers make up roughly half of those affected.
“People’s energy costs are far too high, and we fought for a long time in this case to lower people’s bills,” said Maura Healey. “This decision makes clear that utilities should not be allowed to make exorbitant profits on the backs of ratepayers and that those profits should go back in people’s pockets where they belong. I am going to continue to oppose big rate increases to lower people’s bills.”
Attorney General Andrea Joy Campbell said the ruling reflects years of work to challenge excessive transmission costs.
“As Massachusetts’ ratepayer advocate, my role is to ensure that utility rates are just and reasonable and that consumers are not paying more than they should,” Campbell said. “This decision reflects years of work to challenge excessive transmission profits and deliver meaningful relief. My office will continue to hold utility companies accountable and push for greater oversight to protect residents from unjustified and unreasonable costs.”
Energy and Environmental Affairs Secretary Rebecca Tepper called the ruling a “landmark decision” that will provide savings for families and businesses.
“Transmission costs are one of the fastest growing components of our electricity bills,” Tepper said. “We have been pushing for FERC to cut transmission profits and institute greater oversight for several years. This is a landmark decision by FERC that will result in real savings for families and businesses now and in the future. We’re going to keep fighting to lower people’s energy bills.”
The order, issued March 19, reduces the profit margin allowed for companies that operate high-voltage transmission systems—the infrastructure that delivers electricity from power plants to local distribution networks.
Because the case has been under review for years, federal regulators also directed transmission owners to issue refunds reflecting the lower profit rate.
The case dates back to 2011, when a coalition led by Massachusetts officials filed a complaint arguing that transmission-related costs passed on to customers were excessive. Officials say the ruling also aims to reduce incentives for unnecessary infrastructure spending.
The timing and method for issuing refunds have not yet been determined. State officials said they plan to work with regulators and utility companies to ensure customers receive relief as quickly as possible.
Officials also noted that transmission costs have been rising in recent years, driven in part by investments to repair or replace aging infrastructure. They say additional oversight measures are underway to increase transparency and control costs across the region.
