Massachusetts Electricity Rates: Valley Green Hike Still Saves

A rate increase that still comes in under the utilities

On November 1, households in three Hampshire County communities will start paying more for electricity. In most cases they will still pay less than their neighbors on standard utility service. Valley Green Energy is the community choice aggregation program serving Northampton, Amherst and Pelham. It has signed a two-year supply agreement with Direct Energy Services, and the new prices are fixed through November 2028.13 Even after the increase, the program's prices are projected to stay below standard utility supply prices for most residential customers.13

The contract also changes how Valley Green sets its prices. The program used to charge one blended rate across all three towns. It will now price by utility territory, because National Grid serves Northampton while Eversource serves Amherst and Pelham.13 The stated goal is to keep rates competitive and keep savings possible across the program.12

The numbers show why the change was needed. In Northampton, National Grid's residential supply price is 17.185 cents per kilowatt-hour. Valley Green's basic tier will cost 16.29 cents and its 100% renewable option 18.79 cents.11 In Amherst and Pelham, Eversource's supply price is 15.934 cents. Valley Green's basic tier there will be 15.83 cents and the green tier 18.33 cents.11 So basic-tier customers in Eversource territory will save only about a tenth of a cent per kilowatt-hour, while Northampton customers get a wider margin.11

Read the fine print on "savings"

The headline promise of savings needs some qualifiers. The comparison depends on utility prices that are fixed only through January 31. After that, National Grid and Eversource will reset their basic service rates and the gap could shrink, grow or flip.13 Massachusetts basic service rates change every six months, in January and July, and are set through competitive procurements overseen by the Department of Public Utilities.14

The savings also don't apply to everyone. Small business and commercial customers will pay slightly more than utility rates under the new contract.13 Households that choose the 100% green tier will pay noticeably more than basic utility service in both territories.11 Anyone can leave the program at any time without a fee or penalty, and the new prices will first show up on December bills.13

In short, this is a story about losing less ground, not about electricity getting cheaper. For basic-tier customers, aggregation still works as a modest hedge. But when wholesale prices rise, community programs go up along with the utilities. They just start from a slightly lower base.

The backdrop: a state that pays near the top

The small per-kilowatt-hour differences matter because Massachusetts electricity is so expensive. One market tracker puts the average residential rate at 29.61 cents per kilowatt-hour, about 61% above the national average of 18.34 cents, with a typical monthly bill around $172 to $175.1415 Federal data compiled by another tracker show a July 2026 average of 30.49 cents.

The sources broadly agree on the long-term trend but differ on recent direction. Bloomberg's analysis of federal data found the state's average power price rose 38% from 2020 to 2025.16 The Boston Globe reported that residents pay about 40% more than they did five years ago.19 An EIA-based tracker puts the five-year increase at 33.3%. The year-over-year picture is less clear. One dataset shows Massachusetts down 2.4% from a year earlier, while the same publisher's state page lists a 7.7% increase.1415 The EIA-based figure is a 1.4% rise. Whatever happened in the past twelve months, households are paying far more than they did at the start of the decade.

Supply prices are still climbing. Eversource's Massachusetts basic service rate rose from 14.884 cents to 15.629 cents on February 1, then to 17.32 cents on August 1.17 For a household using 1,000 kilowatt-hours a month, the August step alone adds about $16.90 a month.17

The utility's business model is also part of the picture. Bloomberg found that National Grid's average residential price in Massachusetts rose nearly 10 cents per kilowatt-hour, or 40%, since 2020. Over the same period, Shrewsbury's municipal utility rose just over 3 cents.16 Community choice customers still pay their investor-owned utility for delivery, and delivery costs have grown sharply in their own right.16 That limits what any aggregation deal can do, since it only lowers the supply portion of the bill.

Heating season arrives with a fuel shock

The Valley Green change takes effect as winter heating costs are rising fast. The Globe reported heating oil averaging $6.23 a gallon in Massachusetts, up 75% from a year earlier. The paper linked the spike to fuel prices that have surged since the war in Iran began in February.19 Separate reporting put heating oil at $6.12 a gallon, a 74% year-over-year increase, and noted that about one in five Bay State households heat with oil, mostly in western Massachusetts.4 Hampshire County is part of that region.

Governor Maura Healey declared an "energy emergency" this month. The goal is to temporarily expand home heating assistance for eligible households and lower electric bills for a few months.19 Households are also finding their own ways to cope. Firewood dealers report record demand, wood pellet prices have reportedly more than doubled, and some residents are relying on space heaters and draft stoppers.19 Space heaters run on the same high electricity rates, so for many families the cost simply shifts from the oil bill to the electric bill.

Heat pumps get a better winter rate

State regulators have been pulling the hardest on the price of electric heating. Eversource, National Grid and Unitil customers who heat with a heat pump can get a discounted seasonal rate, and enrolled customers will automatically receive the updated winter rate starting November 1.1 The discount comes through lower distribution charges from November through April. Eversource's base distribution rate, for example, drops from about 6.3 cents to about 2.1 cents per kilowatt-hour, and Eversource also cuts its transmission charge.2

In July the DPU approved deeper winter discounts from National Grid and Unitil. More than 65,000 households are expected to benefit, with an estimated $9.8 million in additional bill reductions on top of the more than $37 million saved under the earlier policy last winter.918 The think tank Switchbox estimated that under the new rates, most Massachusetts households could save money by switching from gas heating to a heat pump.18

Estimates of what different heating fuels cost are consistent. One heating-cost model estimates monthly winter costs in Hampshire County at about $759 for oil, $494 for gas and $450 for a heat pump.6 Last winter, state officials had projected that oil and heat pumps would cost about the same to run, but that assumed oil at $3.10 a gallon.4 With oil now near double that price, the case for converting from oil is much stronger.

Rebates shrink as installation costs bite

The biggest barrier is the upfront cost of a remodel or system replacement, and here the support has become less generous. Mass Save's whole-home heat pump rebate fell for 2026, from $3,000 per ton with a $10,000 cap to $2,650 per ton with an $8,500 cap.37 The federal 25C tax credit of up to $2,000 no longer applies to installations completed after December 31, 2025.38 Systems using R-410A refrigerant were dropped from the qualified products list on January 1, so homeowners now need equipment using newer refrigerants to qualify.8 Income-qualified households can still receive up to $16,000 for an air-source system, and the 0% HEAT Loan still covers up to $25,000.3 Federal HEAR funds are being folded into Mass Save's income-eligible track rather than offered as a separate standalone rebate.8

The program funding these rebates is under political pressure. Mass Save's three-year budget has grown from about $3 billion to $4.5 billion, paid for through surcharges on customer bills.4 The House proposed cutting $1 billion, and the Senate rejected that plan.5 The DPU has warned that savings for program participants "can no longer be assumed" if gas-to-heat-pump conversions lower gas bills but raise electric bills.5 Supporters point to an Acadia Center analysis finding that $8.4 billion in program spending from 2016 through 2024 produced $16 billion in savings.4

The bottom line

For most residents of Northampton, Amherst and Pelham, the Valley Green contract means somewhat less bad news, not cheaper power. Basic-tier households will likely keep a small edge over utility supply prices at least through January. Over the longer term, two things will matter more for household budgets: how expensive oil heating becomes, and whether Massachusetts keeps funding the discounted rates and rebates that make switching to electric heat affordable. The supply contract offers stable prices through 2028, while the state's support for electric heating is still being fought over in the Legislature.