The Empire (State) Strikes Back: New York consumers brace for even higher energy prices

In the state of New York electricity is one of the 3 major costs to run a business. Recent statistics


In the state of New York electricity is one of the 3 major costs to run a business. Recent statistics from the Energy Information Agency (EIA), the federal agency that reports energy statistics, say that on average, New Yorkers pay more for electricity than any other major metropolitan area.

Most people assume this is the case due to the overwhelming demand for energy in such a small geographic area. Some blame the current administration of New York State Governor, Andrew Cuomo, who have brought many promises of energy reform projects only to create another bill for New Yorkers to foot. The number of programs and projects that have failed to yield results have soured the public’s perception of any proposed rate increase to their energy services cost.

Unfortunately, according to recent reports, those costs will continue to rise over the next year.

Consolidated Edison, who has the highest electric rates of any major U.S. utility, is seeking another rate increase. Energy consumers in New York were charged an average 26.99 cents for a kilowatt hour of electricity in 2013 from ConEd. This was more than double the national average of 12.12 cents, new federal data shows.

If this electric increase was not enough, National Grid gas customers in New York City are bracing for additional rate hikes that would be integrated in their bills by January 2017. This is according to a proposed tariff NGrid submitted at the end of January 2016 to the state Public Service Commission. If the commission deems that an increases of up to 14 percent is too steep a jump for 2017, the gas distribution company has proposed phasing in the boost over several years.

So, what are the latest round of energy cost increases for?

Con Ed says the $368 million, the product from the rate hike in 2016, is needed to fund storm readiness and technological improvements in its system. This is a byproduct of the aftermath of Hurricane Sandy. National Grid says their price increase will be allocated to its pipe replacement program of 165 miles per year in New York City and Long Island. This will increase capacity and reliability to natural gas customers.

However, New Yorkers are finding it harder to swallow yet another planned energy project. Recent results show these projects continuously cost consumers money without the benefit of anything in return. New York Governor Cuomo has built a track record of presenting programs with inspiring names like the “Energy Highway” and the “Reforming the Energy Vision” plan. The people who are left footing the bill, are getting fed up with the lack of results.

There are countless programs and initiatives that are currently going on in New York that are needed, and in most cases wanted. Some are considered progressive utilization of consumers funds such as the “Green Bank”, which is an organization funded through charges on customers’ utility bills for clean-energy projects. The NY-Sun program receives similar funding to promote the development of solar power. The NY-Prize is a $40 million program providing grants to individual communities to help identify their ability to utilize microgrid technology.

These programs are aimed at improving efficiency, exploring renewable options, and modernizing a deteriorating energy grid. Other projects such as the previous mentioned “Reforming the Energy Vision”, will take decades to implement, and even when completed, it is not certain what impact they will have on New York energy users. What is further frustrating consumers is that officials are not even able to definitively state whether this program would lower or raise customers’ electric bills.

Confusing legislation like this does not instill confidence in the people of New York. Government officials continually prop up energy policy that results in higher taxes, lost jobs and a more expensive, less reliable energy future. For every one solid, thought out energy program, there seems to be two reckless, inept projects that wastes time, money and resources that could be better utilized.

The Shoreham Nuclear Power Plant has never generated a single kilowatt hour of commercial electricity. The good people of Long Island have been stuck with the bill for this debacle. The State of New York also has provided $750 million of state resources to Solar City, which stands to lose more than $700 million in 2015 alone.

New York legislators forced the NYPA (New York Power Authority) to enter into an agreement to purchase energy for power that wasn’t needed, and will result in more than $1 billion of losses over the next 20 years. They commissioned “The Hudson River Transmission Project”, which is an underground power cable that runs from New Jersey to Manhattan. In April of 2014, Albany signed a long-term deal to buy power from the project with no customers lined up for the electricity. For a period of 12 months, between 2014 and 2015, the power was unused 75 percent of the time.

So will the ConEd and National Grid rate hikes be more of the same? Sadly, it doesn’t matter. Both Commercial and Residential New York Consumers are beholden to pay whatever their utilities charge for the delivery portion of the bill. As long as the state regulators and federal agencies continue to approve the funding of these projects, John Q Public will continue to have to pay for them.

What can consumers do?

New Yorkers do have a choice. Through the New York “Power To Choose” program, consumers can shop for the supply portion of their energy bills. The fact that supply makes up more than half of the costs of the total bill, allows customers to implement a strategy that can reduce their overall budget. With energy costs at the lowest point in 16 years, there is great opportunity to lock in long term rates near the market bottom, which will result in freezing their costs, and preventing further supply rate increases.

For more information on how you can lower your energy budget visit: “CLICK HERE”


Matt Helland
SVP – N.A.E.A.




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