LAST FALL, the Legislature passed a bill mandating a massive purchase of industrial energy storage batteries. I wrote about the staggering cost of this endeavor. However, since this ill-advised effort is proceeding, it is important to minimize its fiscal damage.

Massachusetts ratepayers have a newfound interest in charges on their utility bills since the large price spikes of recent months. With a self-imposed deadline of 2050 for Massachusetts to reach net-zero emissions, costly large-scale battery storage is now a key component of the state’s strategy to keep the lights on, given the intermittency and unreliability of alternative energy.

The bill calls for 5,000 megawatts of battery storage. Assuming this would involve four-hour duration batteries, which make up most grid-scale battery systems, this gives 20,000 megawatt hours of storage, which would power the state for just three and a half hours, on average.

The Department of Energy Resources conducted a public comment period on this costly battery procurement. By law, 1,500 megawatts of the 5,000 megawatt total must be purchased by July 31 of this year, with a forthcoming request for proposals. The cost was a concern when we learned of this massive battery buy, and more questions of cost arose once we looked at the logistics.

First, who will pay? Ratepayers across the state are already feeling the financial burden of energy transition policies like this, and minimizing their impact should be a top priority.

There are both supply charges and delivery charges that make up ratepayers’ bills. Supply charges represent the amount of electricity used and distributed by a supplier, and delivery charges include transmission, transition, distribution, and other charges.

Just because distribution companies are responsible for procuring battery storage does not mean their retail customers should bear the full cost. In fairness, the municipal utilities, co-ops, and electricity retailers should also share the billions in costs, with any rate increases fairly apportioned.

We also question whether the Department of Public Utilities has the authority to set rates for these entities unilaterally, or whether new legislation would be required. This complex issue of rate fairness must be resolved before any battery purchases move forward.

Another major cost concern is the unpredictability of site and facility expenses. Unlike offshore wind projects, where lease costs and site development expenses are known before power purchase agreements are negotiated, the specifics of these battery storage sites remain largely unknown. Without knowing their locations, estimating total costs is nearly impossible, making contract pricing highly problematic.

Additionally, the proposal includes the procurement of “environmental attributes,” which can be loosely defined as benefits from avoiding emissions produced by traditional energy sources, which will ultimately shift costs elsewhere.

While these attributes can reduce contract prices, they still require payment—often by ratepayers. For example, clean peak energy certificates, or CPECs, which are credits earned by renewable generators or storage systems that provide energy during peak demand, are typically funded by ratepayers. The goal of the RFP should be to minimize the total cost to the people of Massachusetts, not just the contract price.

The proposed 30-year contract term raises further concerns. Grid-scale lithium batteries typically last 10-15 years, so they would require full replacement at least once, possibly twice, within the contract period. Depending on usage, this could push costs into the tens of billions of dollars over the 30-year term. Locking into such an expensive commitment today would be reckless and replacement should be handled through separate contracts.

Conversely, some predict that grid battery costs could decline significantly—potentially by as much as 80 percent. If that happens and contract payments remain unchanged, developers could reap enormous windfall profits at the expense of ratepayers. The RFP must be structured to account for potential cost reductions to avoid this scenario.

Considering the recent attention to the spike in utility bills, and particularly the added fees related to climate policies, the new industrial battery mandate should be executed with the tangible costs to ratepayers and taxpayers in mind.

Laurie Belsito is the policy director at Massachusetts Fiscal Alliance.