THE MASSACHUSETTS SENATE recently advanced an energy affordability bill intended to lower costs, but the fine print tells a different story.

It approved a complex proposal called “securitization” that has been promoted as a way to save customers billions of dollars on energy costs. But this financing tool deserves scrutiny to determine whether it will actually save money or simply move costs around.

In simple terms, securitization turns certain utility costs into long-term bonds that are repaid by customers over time through their energy bills. Because these bonds are backed by a dedicated charge on customer bills, they can often be issued at lower interest rates.

That may sound like a cost saver. While customers may see some short-term bill relief, securitization does not eliminate costs. It shifts them, and consumers ultimately still pay the same amount, or more.

To be clear, this tool has been used responsibly in moderation to target one-time, unexpected expenses, such as in Michigan, Florida, and Louisiana. When I served as chairman of the Michigan utility regulator, we enabled seven coal plants to retire early by securitizing the remaining $378 million of costs at a lifetime savings of $135 million. Florida and Louisiana have successfully securitized the costs of storm recovery from one-time unexpected hurricanes.

But the Senate’s proposal takes a different approach. It would expand securitization beyond limited use and allow it to be applied repeatedly to routine grid investment costs associated with the Commonwealth’s energy transition.

This will compound over time and drive higher bills for households and businesses.

For example, Massachusetts energy efficiency programs, Mass Save, run in three-year cycles. Under this proposal, each new cycle could be financed with new bonds before earlier bonds are fully repaid. Rather than reducing costs, this would layer additional repayment charges onto customer bills, creating multiple overlapping charges.

For consumers and businesses already facing high energy prices and a rising cost of living, this cost layering is concerning. It does not meaningfully lower energy prices; it simply changes the timing of payment.

There is also a broader issue that has received little attention. Massachusetts’s utility system is built on a long-standing framework. Utilities invest private capital to build and maintain infrastructure, and those investments are reviewed, scrutinized, and approved by the Department of Public Utilities. In return, customers pay rates that include a limited, regulated return. That structure helps ensure accountability while attracting the investment needed to keep the system safe and reliable over time.

Excessive use of securitization changes that model.

Instead of utilities financing investments and earning a regulated return, customers effectively take on that role by repaying long-term debt directly. At the same time, utilities remain responsible for operating the system and meeting strict safety and reliability standards.

Using securitization broadly to finance ongoing investments shifts risk to customers and undermines the long-term investment framework that keeps the system safe and reliable. Rather than investors bearing the financial risk, more of that responsibility is transferred directly to customers through long-term charges on their bills.

There are also practical financial implications. When more costs are shifted off the traditional model and into long-term bonds, it can weaken a utility’s financial profile. That, in turn, can lead to higher borrowing costs for investments that still rely on conventional financing. Over time, those higher financing costs are passed back to customers, offsetting some or all of the intended savings.

The Senate has suggested this proposal, which is now part of negotiations with the House over a final version of the energy bill, could deliver billions in savings, but that assumption deserves scrutiny. Securitization becomes less effective when it is overused. Repeated securitization transactions will dull the savings. Savings successfully achieved from targeted, limited securitization transactions cannot be broadly extrapolated to repeated overlapping transactions involving routine grid investment costs.

For employers and ratepayers, the relevant question is straightforward: What will this mean for bills not just next year, but five or 10 years from now?

To maintain its competitive edge and attract investment and talent, Massachusetts needs to focus on meaningfully lowering major cost drivers, including energy.

Energy policy should be grounded in transparency and long-term value, not short-term optics. Complexity should not be a substitute for clarity, especially when the stakes for Massachusetts families and businesses are so high.

John Quackenbush served as the chairman of the Michigan Public Service Commission from 2011 to 2016 and is a chartered financial analyst. He is the president of JQ Resources LLC and serves as a regulatory strategy consultant for National Grid.