Electric Rates

History of Eversource Rates

Chart 1: Components of Eversource residential rates applicable on January 1 — 2015 to 2025

Chart 1 (above) and Chart 2 (below) show the history of the components of Eversource’s rates. Some notes about the charts:

• Rates are shown in dollars per kilowatt hour (kwh). For example, the total rate for Supply Charges in January 2015, which shows as 0.14070 is 14 cents per kwh. The “kilowatt hour” is the standard unit for measuring electric power for residential billing.
• The Supply Charges shown (the yellow top segment of each bar) are the rates for Eversource fixed Basic Service. In recent years, very few ratepayers actually pay this charge. While all ratepayers in Boston, Cambridge, and Watertown pay Eversource for delivering power to their home, most purchase their power from a municipal aggregator or competitive supplier. For a chart showing the declining share of basic service customers, see the 2021 Annual RPS Compliance Executive Summary at page 3. Charges from an alternative supplier are shown as such on the Eversource bill.
• The rates in the chart are the R1 Rates for non-heating customers. The R3 rates for heating customers are the same in most components, but the base distribution charge is a little lower (0.7 cents per kwh lower in January 2025). Low-income customers received a discount of 42% off these rates as of January 2025. The rates shown are for the eastern market area of Eversource or, in earlier years when the market area was not consolidated, the Boston portion of that area.
• The “Portfolio Standards” line in the chart is an estimate of the cost of compliance with Massachusetts laws that require power retailers to purchase a share of their wholesale power from renewable sources. These laws are referred to as renewable portfolio standards or “RPS.” The chart backs the RPS cost out of the supply charge, which normally includes it (whether power is purchased from Eversource or an alternative supplier). Expenditures for RPS compliance are treated as confidential in individual company rate filings and the estimates here are very rough modeled averages for all suppliers. The estimates appear in the Avoided Energy Supply Cost study. Actual Eversource RPS compliance costs for this purpose may be above or below these estimates.

Chart 1 shows that costs other than power supply costs have more than doubled over the past 10 years. Chart 2 shows the same components adjusted for general price inflation. All non-supply components of the rate show increases in real terms.

Chart 2: Components of Eversource residential rates applicable on January 1 — 2015 to 2025
(inflation-adjusted by the Consumer Price Index for Urban Consumers in the Northeast)

Components of Eversource Rate

Focusing on rates as of January 2025, Chart 3 highlights the relative share of the components, using the same breakdown as in Charts 1 and 2.

Chart 3: Relative share of components of Eversource residential rate, January 1, 2025

Looking at each of the components in turn as they appear in Charts 1 through 3:

• Supply Charges, the largest component of cost, have fluctuated, but have not trended upwards — basic service supply charges (excluding RPS costs) were lower in 2025 than in 2015. Natural gas now accounts for the majority of power generation in New England and over 75% of the power generation in Massachusetts. Nationally, natural gas prices have been flat to down for the past couple of decades; regional gas costs are more subject to seasonal spikes, but have followed the same trend. See national commodity gas prices here; for a comparison of national to regional gas prices, see Figure 3 in the 2024 Avoided Energy Supply Cost study. More expensive generators (coal, oil, nuclear) have reduced output or have been decommissioned. For power generation trends, see EIA-923 Power Plant Operations Report, downloadable here and analyzed in the attached sheet.
• Delivery Charges, the second largest component of cost, have risen from 6.6 cents to 11.9 per kwh since 2015 — an 80% increase or 36% when adjusted for inflation. Delivery charges as shown in this chart consist primarily of local distribution (53% in 2025) and regional transmission (38% in 2025). Costs for local distribution — the wires, transformers, and substations on the streets — have risen 35% since 2015, only slightly faster than inflation. Transmission charges, however, have more than doubled from $0.01915 to $0.04545. Transmission charges are regulated by the Federal Energy Regulatory Commission and transmission development is overseen by ISO-New England.
• Residential assistance — the cost of providing discounts to low-income ratepayers (spread across other ratepayers) — has drifted upwards relative to overall costs. In part, this reflects policy decisions to increase the low-income discount from 27% in 2015 to 42% in 2025. I have not analyzed how other factors explain the inflation-adjusted tripling of the costs of residential assistance program. Eligibility for assistance is based on participation in any of several means-tested programs like MassHealth.
• Grid modernization charges, including advanced metering infrastructure charges, are based on an initiative by the Department of Public Utilities dating back to 2012 (see DPU docket 12-76, especially final order). The DPU requires the electric utilities to develop grid modernization plans and to pursue grid modernization investments. DPU allows the utilities to recover these investments through dedicated charges. See for example DPU 24-58 in which DPU approved Eversource’s current charge of $0.00221/kwh for grid modernization or DPU 24-45 in which DPU approved Eversource’s current charge for advanced metering infrastructure of $0.00294/kwh.
• Portfolio standards — the rising cost of complying with renewable portfolio standards reflects (a) increases in the share of renewable energy that the standards require utilities to purchase; (b) layering of additional standards, for example the Clean Peak Standard. As noted above, the compliance costs of portfolio standards are built into supply rates on electric bills and are not published for individual utilities. The estimates shown in the charts above are modeled Massachusetts averages. For in-depth analysis of the costs of portfolio standards, see the 2024 Avoided Energy Supply Cost Study, Section 7 and DOER’s RPS Compliance Reports. As noted in this previous post there are modest additional charges built into supply costs (FCM and RGGI charges), which add approximately $0.0020/kwh to the rates; these costs are not reflected in the analysis here.
• Environmental Charges in Delivery — this component is composed of four types of charge illustrated in the graphic further below. Two types account for 96% of the environmental charges in delivery:
  • Mass Save Energy Efficiency Charges increased approximately 130% (more than doubled) from 2015 to 2025. These charges are comprised of a fixed charge of $0.0025/kwh and a reconciling factor which is set periodically to cover the growing budget, $0.02861/kwh in 2025. For more discussion, please see this previous post.
  • Solar programs. There are five distinct solar charges, but the Net Metering Recovery Surcharge and the Distributed Solar Charge (SMART) account for more than 100% of the category — the remaining three minor charges added up to a small net negative in 2025 rates.
    • The Net Metering Recovery Surcharge (NMRS). Through the NMRS, “the electric distribution companies, including NSTAR Electric, recover from all ratepayers the costs for compensating net metering customers.” Order in DPU 24-171. Simply put, the basic distribution rate is set by dividing allowed costs by expected kilowatt hours of sold power; to the extent some customers with solar installations are able to reduce their distribution costs or even receive net distribution credits, this lost revenue needs to be recovered from all ratepayers through the NMRS. The NMRS more than doubled from 2023 to 2024 and will apparently remain at its current level through 2025 into 2026.
    • The Distributed Solar Charge compensates the utilities for solar incentives paid to participants in the SMART program. The charge has increased since 2019 when it was instituted, but declined from 2024 to 2025. For more information, see Exhibits in DPU 24-174.

Chart 4: Relative share of subcomponents of Environmental Costs in Delivery — these rate subcomponents add to 15% of total Eversource residential rate, January 1, 2025 (as shown in Chart 3)

Comparison to Belmont Light

Chart 5: January 2025 rate components — Belmont vs. Eversource

Eversource serves my constituents in Boston, Cambridge, and Watertown. Belmont has its own municipal utility. Chart 5 compares Eversource and Belmont Light Rates. Belmont Light last raised rates as of January 1, 2023.

• For comparability, the rate categories are simplified from the greater detail in the Eversource Charts above.
• “Distribution” combines the rate elements referred to in the Eversource charts above as “Delivery charges”, “Grid Modernization”, and “Residential Assistance.” However, it excludes Transmission charges (which were bundled with “Delivery” in the Eversource Charts). Distribution is a little higher for Eversource than for Belmont, but the difference is modest ($0.00974/kwh). This helpful Reddit post suggests that higher distribution costs are to be expected for Eversource given the the complexities of a dense urban grid, but the comparison cannot be made with confidence.
• The “Generation” charge comparison makes Eversource rates look high, but most Eversource customers do not buy power generation from Eversource, using alternative suppliers, likely municipal aggregators. Eversource is limited by law in its ability to buy longer term contracts, so its rates tend to fluctuate and Chart 5 reflects January rates.
• “Transmission” charges are similar, which is to be expected since Belmont receives its power through Eversource’s substation in Cambridge.
• The most striking difference is as to “Conservation” charges — Belmont’s “Conservation” charges are a small fraction of Eversource’s delivery charges for environmental policies (only $0.00240 vs. $0.05390/kwh, under 5%); Belmont’s per kwh conservation charge is also less than 10% of Eversource’s Mass Save charge alone ($0.03111). Belmont does provide residential incentives for heat pumps and other energy saving measures, but at a much more modest level than Mass Save and Belmont does not make the substantial investment in low income environmental improvements that Mass Save does.
• Note that Chart 5 does not include a measure of Renewable Portfolio Standard Compliance costs. These costs are left embedded in Generation charges. Belmont attempts to cover all of its purchases with renewable credits so that its power is 100% “green.” Belmont does publish (2024-05-15 Power Supply Presentation) the costs of its RECS (unlike Eversource), and they work out to only approximately $0.01/kwh — half the generic estimated level used in the Eversource charts above. While not segregated in Chart 5, RPS costs are included in the Bill Impacts table further below.

Bill Impacts

Table 1: Estimated annual bill impact of environmental policies at January 2025 rates

	Non-Heating Customer	Heating Customer
Belmont Light Conservation Charge	$15.26	$21.46
Belmont Light approximate cost of 100% green policy	$63.60	$89.40
Belmont Light est. total cost of environmental policies	$78.86	$110.86
Memo: Eversource Mass Save Charge alone	$197.86	$278.12
Eversource Environmental Costs in Delivery (incl. Mass Save)	$342.79	$481.84
Statewide modeled average costs of RPS compliance	$151.62	$213.13
Eversource est. total cost of environmental policies	$494.41	$694.97

Several notes about Table 1:

• Eversource estimates monthly usage of 530kwh for non-heating customers and 745kwh for heating customers in its bill impact spreadsheet filed for its energy efficiency plan three year plan. Table 1 shows annual bill impacts assuming these monthly average usage levels.
• As noted in this previous post there are additional modest indirect charges built into supply costs (the FCM and RGGI charges), which add very approximately another $12 per household per year; these charges are not included in table 1.
• Table 1 reflects January 2025 rates, before the Mass Save budget cuts ordered by DPU on February 28, 2025; these cuts will likely reduce the Eversource Mass Save charge by 15%, roughly $30 to $40.

Electric Rates in other Service Areas

The impact of policy-driven charges on electric rates in other service areas may be greater than in the Eversource area analyzed here. In building to the conclusion that the Mass Save budget for the 2025-2027 Three Year Plan should be cut by $500,000,000, the DPU made the following observation:

Notably, these Three-Year Plans are one of several legislatively mandated policy initiatives designed to further the Commonwealth’s critical energy policy goals. Initiatives such as net metering, the Solar Massachusetts Renewable Target (“SMART”) Program, off-shore wind and energy storage procurements, electric vehicle infrastructure programs, grid modernization, AMI, gas system enhancement programs, and ESMPs each deliver essential benefits to the residents and workers of the Commonwealth. And like the Three-Year Plans, these initiatives are also funded through reconciling mechanisms that allow the electric distribution and gas companies to recover the cost of these programs directly from ratepayers. Currently, when combined with energy efficiency, these programs constitute 17.5 to 24.5 percent of residential electric bills, depending on the Program Administrator (see, e.g., Exh. NSTAR-Electric-6 (Rev)).

DPU Order dated February 28, 2025 at page 208-9 in Three Year Efficiency Plan Docket 24-149 (emphasis added and link added).

In the analysis presented in this post, which reflects the latest rates (January 1, 2025 still effective in March 2025), the policy driven charges inventoried by DPU (environmental charges and grid modernization) comprise 16.9% of Eversource’s rates. Eversource’s bill impact exhibit, cited by DPU, shows a slightly higher policy-driven share, 18.0% in 2024 and 20.0% in 2025, but that exhibit is intended to isolate the impact of the increase in energy efficiency charges and as to 2025 does not reflect concurrent increases in other rate components. It does appear that as to policy-driven charges, Eversource is near the middle of the pack. Policy driven charges are relatively higher in some other utility service territories.

Note on executive compensation

After original publication of this post, a constituent wrote asking about executive compensation as a component of the increases. This question has to viewed on two different levels: (a) base and incentive compensation from the regulated NSTAR entity; (b) ownership compensation at the Eversource corporate level.

Base and incentive compensation

The Department of Public Utilities does review executive compensation — more broadly, employee compensation — as part of its Performance Based Rate reviews. Performance based rates are evaluated in depth every five years and updated annually. The last full update of NSTAR’s rates was in 2022, through DPU Docket 22-22. The final order in that case devotes over 20 pages (pages 149-171) to discussion of employee compensation issues, including a specific discussion of incentive compensation for executives. The company is required to demonstrate that there is parity between union and non-union compensation growth and that non-union compensation is reasonable — in relation both to business strategy and to similar jobs in other companies. NSTAR’s submissions on these issues were not contested by any party in the heavily litigated proceeding. Non-union incentive compensation was finalized at a total of $6.5 million with an additional $0.6 million for the CEO and CFO — see pages 158, 160 (note 82), and 164 of the final order. The Massachusetts supplement to FERC Form 1 details base salaries for the top compensated officers in 2022 in the lower six figures. These are relatively small amounts in the context of NSTAR’s roughly $5 billion in total revenue (page 533 of the final order; note that roughly $1 billion in revenue is derived from base distribution charges, which account for 6 cents per kwh in residential rates).

Ownership compensation

Notwithstanding his limited salary and incentives within the regulated NSTAR entity, NSTAR’s Chair, Joe Nolan, is also compensated (a) with salary and incentives paid by ratepayers in other territories served by other Eversource companies and (b) with stock and other ownership interests. Neither category of additional compensation is paid by NSTAR electric ratepayers. The ownership compensation is paid effectively by the company investors. Including all his additional compensation, his total package in 2022 was reported at over $13 million. That compensation rose to $19 million in 2023, ranking him 9th among major utility executives nationwide. While very high executive compensation levels across the economy are deeply troubling, state utility regulators appear not to have a handle that would allow them to address this excess. See this discussion from the New Hampshire consumer advocate. To keep the numbers in perspective, if $10 million per year from this package were rebated to NSTAR customers, the rate impact would be approximately $0.00050 per kwh hour, as compared to a total 2025 rate of $0.34844 per kwh hour. [As a comparison, the statutory systems benefit charge of $0.0025/kwh yields approximately $50 million in revenue to NSTAR according to Appendix C of the 2025-27 three year plan.]

Resources

• Spreadsheet of all computations and sources in this post
• DPU’s bill explanation page
• Governor Healey’s Energy Affordability Agenda
• Assistance with paying utility bills
• Additional background resources on gas and electric costs
• What’s in my electric bill (online bill analysis tool)

Links to Eversource Rate Filings in DPU File Room

Rate year	DPU Docket	Summary rate filing file name (rate sheet as of 1/1 for rate year)
2015	14-121	NSTAR_rev_umbrella_filing_121814.pdf
2016	15-152	Eversource_Supp_Filing_12-1-15.pdf
2017	16-172	Updated_Initial_Filing_12-1-16.pdf
2018	17-157	EV_updated_filing_12-1-17.pdf
2019	18-120	Exhibit_ES-MQ-79_and_10_Umbrella_Revised.xlsx
2020	19-122	Summary_Rate_Tariff_Compliance_Filing_12-30-19.pd
2021	20-124	M.D.P.U.No.1-21-BNSTARSummaryTariff_Approved.pdf
2022	21-131	NSTARElectricDPU21-131ComplianceSummaryRateTariff
2023	22-131	NSTARElectricDPU22-131RevisedSummaryRateTariffFil
2024	23-111	DPU23-111SummaryTariff.approved.12.29.23.pdf
2025	24-171	NSTARDPU24-171UpdatedRateFiling(11-27-24).pdf

Text last updated on March 16, 2025

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