Massachusetts depends on oil for more than one-fourth of its electric generation and almost one-half of its home heating. Energy costs in the state are among the highest in the US. Nevertheless, this is an improvement from the early 1980s, when as much as 81% of the state's electric power output was generated from oil. In 2000 Massachusetts's total per capita energy consumption was 271 million Btu (68.3 million kcal), ranking it 42nd among the 50 states.
In 1999, about 41.5 billion kWh of electric power (utility and nonutility) was generated in state, and total installed capacity was over 11.8 million kW. Almost all generating capacity in the state is privately owned. As of 2001, Massachusetts had one operating nuclear plant, the single-unit Pilgrim plant in Plymouth, with a capacity of 667,000 kW. Boston Edison supplies electricity to the city of Boston; the rest of the state is served by 13 other companies, although a few municipalities do generate their own power. Power companies are regulated by the Department of Public Utilities, which establishes rates and monitors complaints from customers.
Massachusetts has no proven oil or coal reserves. After a lengthy court battle, oil exploration off the coast of Cape Cod began in 1979. Environmentalists and fishermen had sought to prevent development of an oil industry in the region, which is one of the richest fishing grounds in the country.
The state consumes but does not produce natural gas. In 2002 about 393 billion cu ft (11.1 billion cu m) of natural gas were delivered. Almost 35% of the gas sold was for residential use, 40% for industries and electricity generation, and 25% for commercial use.
There is one nuclear power plant in Plymouth, with an average operating capacity of 667 MW. Four pumped-storage hydroelectric plants have a combined capacity of 846 Mw. There were also 45 conventional hydroelectric generators, with a combined capacity of 151 MW in 1999.
The state encourages energy conservation and the development of alternative energy systems by granting tax credits to qualifying industries. Private researchers and the state have established demonstration projects for solar energy systems and other alternatives to fossil fuels.