Overview
On August 11, 2022, the Commonwealth of Massachusetts enacted G.L. c. 164, §§ 92B-92C, through An Act Driving Clean Energy and Offshore Wind, St. 2022, c. 179, § 53, that requires the electric companies operating in Massachusetts to each submit an ESMP with the DPU every 5 years. The first ESMPs were submitted to the DPU on January 29, 2024, and identified proposed ESMP investments beyond those investments already planned by the companies during the 5-year ESMP investment term.
On August 29, 2024, the DPU issued the D.P.U. 24-10/24-11/24-12 Order approving with modification the electric companies' inaugural ESMPs and identifying several next steps with the process.
The DPU determined that the ESMP filings complied with the statutory requirements outlined in G.L. c. 164, §§ 92B. DPU identified the ESMPs as strategic roadmaps for accelerated electric company investments. These investments are above and beyond planned company investments and geared towards modernizing and upgrading the electric grid at a pace to enable an affordable, equitable clean energy transition. The DPU established the first ESMP investment term as July 1, 2024 through June 30, 2030. The DPU did not pre-approve any costs or specific investments, explaining that it would determine in a subsequent phase of the proceedings how the electric companies may recover costs for ESMP investments. The DPU explained that the subsequent phase would also address near-term ESMP reporting requirements and ESMP investment metrics.
The anticipated investments identified in these strategic plans aim to:
- improve grid reliability and resiliency. This is important to address expected more frequent and extreme weather events in the Commonwealth.
- prepare the grid for rapid deployment of renewable energy sources,
- support energy storage and emerging electrification technologies essential for reducing carbon emissions, and
- enable increasing electrification in transportation and buildings.
Specific aspects of the ESMPs and the DPU's findings are described below. The DPU’s findings relied on:
- interpreting legislative intent behind the comprehensive ESMP statutory directives, and
- extensive DPU precedent, in particular, associated with DPU reviews for previous grid modernization investments.
Investment proposal summary
ESMP investment category descriptions
| Investment category | Description |
|---|---|
| Customer investments | New programs and demonstrations to advance virtual power plants (VPPs) and use of distributed energy resources (DER) for grid services, and investments in new clean energy customer portals & enabling technologies |
| Platform investments | Investments identified to leverage data, digitalization, and other platforms to optimize infrastructure and meet evolving customer needs |
| Network investments | New substation and distribution line upgrades to support electrification load growth and DER interconnections, as well as investments to install and manage additional technology hardware to improve network operations and management |
| Resiliency | Undergrounding, reconductoring and other storm hardening infrastructure upgrades |
| Capital investment project (CIP) | Substation and line upgrades to enable DER interconnections with cost allocation |
| EV program | Continuation of existing electric vehicle (EV) make ready and charging infrastructure enablement programs |
| Solar | Programs to support adoption of solar and storage technologies in environmental justice populations |
| Program administration | Program administration of incremental ESMP projects |
Summary of Estimated Spending ($ Nominal) 2025-2029
Note: The below numbers are initial estimates subject to revision and exclude totals associated with each company’s planned investments outside the ESMP framework. The electric companies did not propose particular ESMP investments for every investment category and identified for informational purposes non‑ESMP investment plans where certain investments, e.g., resiliency and network investments, may otherwise be accounted for.
| Investment category | Eversource ($ million) | National Grid ($ million) | Unitil ($ million) |
|---|---|---|---|
| Customer investments | $58.5 | $99.7 | $1.0 |
| Platform investments | $55.5 | $400.1 | $0.7 |
| Network investments | N/A | $1,634.0 | $42.6 |
| Resiliency | $225.0 | N/A | $5.0 |
| CIP | $261.8 | $71.8 | N/A |
| EV program | $168.9 | $299.2 | $1.2 |
| Solar | $50.0 | N/A | N/A |
| Program administration | N/A | $20.1 | $0.4 |
Net benefits of the ESMPs
The electric companies estimated that their proposed ESMP investments would collectively provide over $7.5 billion in net benefits and would indirectly create over 5,200 jobs between 2025 and 2029. The DPU found that the electric companies calculated net benefits for their ESMP investments using reasonable methods and inputs for the purpose of strategic planning. The DPU determined that the net benefits analysis in the ESMPs met statutory requirements and that the plans provided net benefits for customers. The DPU analyzed the net benefits based on the full suite of investments as a plan, rather than based on each individual investment or category.
Minimization of customer costs
The DPU identified and acknowledged the substantial costs and corresponding benefits associated with the proposed ESMP investments. The DPU directed the electric companies to aggressively seek to minimize ESMP costs charged to ratepayers through diligent pursuit of:
- grants,
- tax incentives, and
- low-cost financing programs.
Ensuring affordability and minimizing customer costs for electric investments are DPU priorities. The DPU explained that we would continue to consider these issues in future stages of the ESMP proceedings. The DPU also explained that the ESMPs are only one of several initiatives overseen by the DPU to further the Commonwealth’s critical energy policy goals that deliver substantial benefits to its residents, all with associated costs charged to customers. In consideration of the costs and benefits of these essential policy programs, the DPU noted the value in a process where policymakers, stakeholders, and the DPU can work together to comprehensively address the cumulative effect of these programs on customer bills now and in the future.
Equity and stakeholder engagement
In their ESMPs, the electric companies proposed to incorporate into their distribution system planning a common overall equity framework with company-specific elements applicable to both ESMP and non-ESMP investments to guide stakeholder engagement efforts and assist in addressing the needs and concerns of their customers and the communities they serve. This proposed equity framework was the electric companies’ first comprehensive strategy to incorporate equity principles into their distribution system planning processes.
To ensure direct benefits for communities that host clean energy infrastructure projects, the electric companies proposed to enter into community benefit agreements (CBAs) with host communities on a case-by-base basis. The companies also proposed to establish a Community Engagement Stakeholder Advisory Group (CESAG) to develop a statewide community engagement framework to inform stakeholder engagement efforts involving proposed clean energy infrastructure projects. The CESAG would consist of members from:
- the electric companies,
- community-based organizations, and
- an environmental or equity advocacy organization.
The DPU found that the equity framework is consistent with the Commonwealth’s public policy goals and DPU policies but determined that certain modifications to specific elements of the electric companies’ proposed equity framework was appropriate, including requirements to:
- Develop equity policies, including environmental justice and language access policies, in coordination with the CESAG,
- Develop best practices for incorporating plain language into public-facing materials,
- Develop policies and practices on how to integrate environmental justice principles into their siting decisions for large electric distribution system infrastructure projects,
- Provide regular trainings for their employees on internal equity-related policies, and
- Report on how they are addressing equity in the implementation of their ESMPs, and distribution system planning generally, and to describe how any lessons learned could shape the next iteration of their equity framework.
The DPU also:
- Found that the electric companies’ CBA proposal requires a discussion with a broader group of stakeholders, including the Energy Facilities Siting Board, and that it is premature for the Department to consider cost recovery for CBAs while legislation is pending that would address CBAs and CBA cost recovery,
- Will consider proposals for equity-related metrics at a later time, and
- Acknowledged that the equity framework is only the first step in an ongoing process for the electric companies to meaningfully engage, educate, and respond to stakeholders and communities and to address inequities by mitigating the negative impacts on those communities that bear the burden of hosting electric distribution system infrastructure that provides benefits that often extend beyond the impacted communities.
Electric load forecasts
Each electric company develops a 5 and 10-year demand forecast to inform their capital investment plans and to fulfill their obligations to provide safe and reliable service. These forecasts are updated annually to account for up-to-date data and trends, including electrification and EV usage, on the company’s electric system and to inform reprioritization of and updates to planned investments. The forecast inputs and assumptions vary between the companies, in part, due to varying characteristics of each company’s service territory. These forecasting and planning practices were in place long before the ESMPs, and are reported annually to the DPU by the companies on March 31st through their annual reliability reports.
The electric companies relied on their existing forecasts and planning practices, with additional inputs derived from the Commonwealth’s electrification estimates, to inform their proposed ESMP investments. For purposes of the ESMPs, the electric companies also developed a longer term assessment of electric demand out to 2050, which also helped to inform their proposed ESMP investments.
The DPU found that each company’s forecasting methods and assumptions were reasonable, appropriate, and reliable, and that variations in forecasting between the companies is necessary and allowable. The DPU also determined that each company’s ESMP complied with the statutory forecasting and demand assessment requirements. For purposes of ESMP reporting, the DPU required the electric companies to provide a comparison of forecasted and actual demand, separated by categories by year, determining that this would allow the DPU and stakeholders to assess the reliability of each company’s forecast.
Investments to support electric vehicles, heat pumps, and energy storage
In their ESMPs, the electric companies identified accelerated investments in the electric system to meet the Commonwealth’s projected electric vehicle, heat pump, and battery energy storage adoption targets for customers. Although the DPU did not pre-approve the proposed ESMP investments, the DPU noted that our approval with modification of the ESMPs as strategic plans was a significant step towards equitably achieving the Commonwealth’s clean energy goals and greenhouse gas emissions reductions.
Interconnecting clean energy resources to the electric grid
In a prior proceeding (D.P.U. 20-75), the DPU investigated the possibility of establishing a Long Term System Planning Program, or LTSPP, to help interconnect clean energy sources including solar and other distributed energy resources into the electric grid. A LTSPP is intended to:
- reduce interconnection costs,
- accelerate deployment of clean energy resources,
- provide benefits to ratepayers, and
- support the Commonwealth’s clean energy policies.
In its ESMP order, the DPU directed the electric companies to create a LTSPP Working Group with stakeholders, beginning a 6-month process towards developing a LTSPP framework informed, in part, by the information identified in D.P.U. 20-75. By April 4, 2025, the electric companies must submit a report to the DPU that summarizes all issues on which the electric companies and stakeholders agree, as well as areas of disagreement. The DPU will review this report and then direct next steps.
Given the time needed to establish a LTSPP, and the number of solar and distributed energy resource projects currently waiting to interconnect to the grid, the DPU extended the existing Provisional Program for Capital Investment Projects (CIPs). This will allow the companies to file proposed CIPs included in the ESMPs in the near term, subject to certain criteria and filing requirements described in the ESMP order.
Climate change resilience
In their ESMPs, each electric company described their plans to proactively upgrade the distribution system to improve grid reliability and resiliency and prepare for climate risks. The electric companies also described their planned climate vulnerability assessments, which will be used to target both ESMP and non-ESMP resiliency investments. The DPU found that the electric companies complied with statutory requirements regarding climate change resilience. However, the DPU directed the electric companies to modify their targeted resiliency planning processes, including their climate vulnerability assessment frameworks, to ensure more consistency and to meet certain requirements outlined in the order. The electric companies must also provide detailed explanations of their planned resiliency investments in their ESMP reports.
Next steps
In future proceedings, the DPU will consider issues not addressed in its initial ESMP order, including ESMP cost recovery mechanisms, performance metrics, and reporting requirements.
Contact
| Last updated: | December 10, 2024 |
|---|