Financing the Transition Work Group (FTT)

There are three investor-owned electric distribution companies (EDCs) and 41 municipal utilities, known as Municipal Light Plants, in Massachusetts, with the EDCs serving approximately 90% of electricity consumers. 

EDCs build, maintain, and operate the electric grid to serve their customers, including, transmission and distribution lines, substations, poles, and transformers. The way electricity is produced, delivered and consumed is changing, requiring investment in the grid to connect more clean energy, support increasing amounts of electrification from heating and transportation, and make the it more resilient. 

In January 2024, the EDCs filed Electric Sector Modernization Plans (ESMPs) with the Department of Public Utilities (DPU). These ESMPs serve as strategic plans establishing the investments the EDCs deem necessary to enable Massachusetts to meet its climate and other public-service mandates. The DPU approved the ESMPs with modification on August 29, 2024, and will conduct further proceedings on cost recovery associated with the investments anticipated in those plans. 

The DPU regulates the prices and other terms and conditions of the rates EDCs charge for building, operating, and maintaining the local electric distribution system. EDCs may not adjust revenue or rates without approval by the DPU. Currently, the primary financing mechanism for these electric distribution infrastructure investments is collecting revenue via electricity rates. Energy efficiency and other programs have helped to avoid the need for some grid investments in the past and, in so doing, mitigate bill impacts. The pace of needed investment growth over the coming decades, however, is expected to increase and outpace the ability of efficiency and other programs to offset bill impacts under traditional forms of investment recovery through customers’ electricity bills.

The Office of Energy Transformation convened the Financing the Transition (FTT) Focus Area Work Group (FAWG) to facilitate stakeholder input on alternative mechanisms for financing/funding electricity distribution system infrastructure upgrades necessary to achieve the Commonwealth’s clean energy and climate mandates that minimizes impacts on consumers' electricity bills, while providing an affordable, sustainable, and timely source of revenue to support investments. the LDCs' evaluation of alternatives to EMT. The work group launched with a public informational webinar in October 2024 that provided an overview of its purpose, scope, structure, and process. The webinar recording and slide deck are available below. 

The FAWG brought together stakeholders from labor, business, finance, environmental justice (EJ), clean energy, consumer advocacy, investor-owned utilities (IOUs), technology providers, affordable housing development, and other sectors. Through this collaborative process, the work group developed a final report that provides background on utility financing, describes the FAWG process, presents alternative financing mechanisms, and offers findings and recommendations to the Energy Transformation Advisory Board. The recommendations outline a strategic portfolio of financing mechanisms to help mitigate electric bill impacts while supporting the grid needed to Massachusetts' clean energy transition. The report is linked above.

The work group concluded its activities with a public webinar on June 25, 2026. The webinar covered how grid upgrades are financed today, the menu of alternative tools examined by the FAWG, and the tools and pathways the working group recommends. The webinar recording and slide deck are available below. 

For questions about the EMT Focus Area Work Group or other efforts of the OET, please email energytransformation@mass.gov.