Electric bills in New York haven’t been this high for a decade, and they’re about to rise even more. Here’s why.
By Colin Kinniburgh, NYFocus.com
You may have noticed your energy bills going up recently. It’s not just you, and it’s about to get worse.
Electric bills in New York are the highest they’ve been in over a decade, even when taking inflation into account. More than a million households are at least two months behind on payments, owing utilities close to $2 billion. And record numbers of households had their electricity or gas shut off this spring, including more than 61,000 in May — the highest number the Public Utility Law Project (PULP), a decades-old consumer advocacy group, has ever seen.
Anxiety about unaffordable bills only mounted over the summer. Laurie Wheelock, PULP’s executive director, said this August was the group’s busiest month ever, with a surge in calls to its hotline. The top concern on people’s minds: rate hikes.
Utilities are successfully jacking up prices. At the same time, electricity demand is surging: New York, like many other states, is bringing new data centers, high-tech manufacturing, and other energy-hungry industries onto the grid, while also electrifying more home heating and transportation. And President Donald Trump’s onslaught of policies aimed at hindering renewables is only adding fuel to the fire.
Meanwhile, both the federal and state governments are eyeing deep cuts to assistance programs meant to help keep energy bills under control.
What’s behind the surging costs? Here’s what you need to know.
Utility Rate Hikes
Every energy bill in New York breaks down into two main parts: supply, which reflects the costs of producing the energy that you use, and delivery, which reflects what your local utility charges to get that energy to your home.
The delivery side is what’s mainly driven up bills over the last decade, and it’s still the fastest-growing part. It’s set through the state’s well worn “rate case” process: Utilities ask regulators for bill increases to cover their operating costs and pay for new infrastructure. After negotiations, the state’s Public Service Commission, or PSC, approves a compromise deal. Then rates go up, though usually by less than the utility had asked for.
In recent years, utilities have requested far bigger hikes.
“We used to see single-digit rate hikes and now we see double-digit rate hikes,” said Jessica Azulay, executive director of the advocacy group Alliance for a Green Economy. Since the pandemic, several utilities have requested increases of 25 percent or more to their delivery rates — and this year, as much as 39 percent. “That’s a new normal that is unacceptable,” Azulay said.
As of September, some 75 percent of the state’s electric customers and almost half of gas customers had rate hikes pending or recently approved. The latest proposals, from upstate utilities NYSEG and RG&E, would increase electric bills by $33 a month. NYSEG’s proposal would increase gas bills by the same amount — a whopping one-third increase. (Regulators are unlikely to approve the full requests.)
Continue Reading on NYFocus.com
