With colder-than-average temperatures this winter, skyrocketing energy prices have been top of mind for many Bostonians, including Mayor Michelle Wu, who addressed the squeeze felt by consumers in her Wednesday State of the City address.
“Household budgets are strained by higher energy bills,” she said. “If your home isn’t well insulated, you are spending too much to keep warm.”
But just how expensive are energy costs in Boston? Federal data tracking average prices across the nation show that Boston metro’s prices are much higher than the national average.
The average electricity price in the Boston metro area was 31 cents per kilowatt-hour in December 2024, the most recent data available from the Bureau of Labor Statistics. That was about 73 percent higher than the national average of 18 cents. Natural gas prices were around 65 percent more expensive than the national average, while gasoline prices were roughly even.
These numbers come from the federal statistics bureau’s Consumer Price Index, which uses surveys and other data sources to calculate average prices change over time.
There are many factors that explain why energy costs are so high in the city and state compared to much of the rest of the nation. One factor is that Massachusetts relies on oil and gas pipelines from other states and Canada, which are vulnerable to price jumps. It also consumes a lot more energy than it is able to generate on its own.
The age of Boston’s energy system also makes keeping cost down difficult, said Belleh Fontem, assistant professor of operations management at UMass Lowell.
Old systems and equipment waste more heat, are often more likely to break, and are less able to adapt to sudden changes in temperature, Fontem and others said. There have been some efforts by the state to modernize the aging energy system. But it takes time to adjust such a complex grid, and moving too quickly could cause energy companies to pass increased costs onto consumers, Fontem said.
The city’s cold winter climate also puts a major strain on the energy system, which can lead to an overall increase in prices, said Harvey Michaels, a lecturer in energy management innovation at the Massachusetts Institute of Technology. This winter was also colder than average, so more people have been cranking up the heat to stay warm.
Because winter temperatures in Boston can dip so low, the city has intentionally built a vast but costly energy system capable of supplying heat during those cold dips, Michaels explained. Although the whole system isn’t typically used in warmer months, it still costs a lot of money in upkeep.
“It’s like having a fleet of planes flying around with very few passengers on them,” he said. “It’s going to be very expensive for the passengers that do fly” to make it worth it.
Boston, along with the rest of New England, also relies more heavily on natural gas imported from Canada than most of the US.
If trade relations between the two countries continue to sour, and more tariffs are imposed on energy, prices are very likely to climb in Boston and across New England, experts say.
Scooty Nickerson can be reached at scooty.nickerson@globe.com.
