Massachusetts recently updated its flagship Mass Save energy efficiency program. The changes will affect AIM member companies in areas served by an investor-owned electric or gas utility – companies such as Eversource, National Grid and UNITIL.

The changes took effect on January 1. Massachusetts reviews its energy efficiency programs every three years. 

What will the changes mean to your company? Many commercial and industrial (C&I) programs will continue, some with modifications.   

Greenhouse-gas reductions are now counted in the calculations to determine energy savings 

A 2021 Massachusetts law mandated economy wide greenhouse gas (GHG) reductions beginning 2030. As a result, the new energy efficiency programs include the social value of carbon in the cost-effectiveness analysis calculations for most measures.      

The result is that previously marginally cost-effective programs may now be eligible for programs when the benefits of greenhouse-gas reductions are included.  The new three-year plan is expected to reduce the equivalent of 845,000 metric tons of greenhouse-gas by 2030, equal to the emissions from about 180,000 cars. 

New emphasis on heat-pump technology 

Reducing greenhouse gases will eventually require a switch from fossil fuels to electric options for building heating, water heating and some industrial processes. The new plan will emphasize electric heat-pump technology for commercial and industrial customers, particularly for smaller businesses where residential-sized options may work.

Larger companies may have a tougher time electrifying, but electrification may still make sense in areas of your facility, particularly if you are served by delivered fossil fuels such as oil and propane.  

New C&I Deep Energy Retrofit programs  

Focused primarily on enhanced insulation rebates, this program will ensure that new energy efficiency measures are effective.      

A new C&I working group will be formed 

The new plan establishes a working group to address the concerns of commercial and industrial customers. The group will facilitate direct engagement (surveys for instance) between the Program Administrators (utilities), customers and contractors with experience in the programs. The feedback will be used to modify or enhance programs.  

Most lighting rebates are eliminated 

Since its inception, Mass Save has offered rebates for energy efficient lighting. Now that such lighting is often required by code and ubiquitous, rebates are not allowed, except when new lighting is paired with controllable technologies.  

Combined Heat and Power (CHP) is no longer eligible for rebates  

Combined Heat and Power systems produce electricity and recover the exhaust heat to produce heating, cooling, and process steam for manufacturing and other uses.

Many AIM members have installed combined heat and power to manage their energy costs and ensure reliability. AIM has long supported this effort. The new greenhouse-gas law makes natural gas and other fossil fuels ineligible for rebates. AIM has long supported CHP and disagrees with the elimination of incentives for Combined Heat and Power.

Electricity and natural-gas costs will rise 

The Mass Save program is primarily funded by a surcharge on a customer electric and gas bills.

In the previous three-year plan (2019-2021), the total costs (gas and electric) were about $1.1 billion for commercial and industrial customers, representing about 40% of the total program costs. Rebates are generally sector specific, so money collected from commercial and industrial customers is mostly returned to those customers.

The new program will see commercial and industrial sector costs rise to about $1.56 billion dollars over three years. The impact on company energy bills will vary, but the increase will have a measurable impact on overall energy costs. More information will be available as programs are rolled out.

For electricity customers, any increase will show up on under the Energy Efficiency Reconciliation Factor (EERF) on the bill. For gas customers, the increase will show up under the local distribution adjustment factor (LDAF) on your bill. 

Use of fossil fuels for heating, industrial use and transportation will likely be phased out in the coming decades.  

Questions? Contact Robert Rio at rrio@aimnet.org