People across New York state have opened their mailboxes in the last few weeks to find a nasty surprise waiting in the form of unseasonably high electric bills.
Governor Kathy Hochul has since called for Con Edison to reform its billing practices, and regulators at the Public Service Commission (PSC) say the utility company needs to better prepare its energy reserves – and its customers – for times when prices spike.
But that doesn’t immediately help the many New Yorkers who are suddenly seeing bills two or three times higher than usual for the winter months. These uncertainties paired with the complex nature of New York’s energy utilities has left ratepayers upset by the unexpected bills, confused about why this happened, and what can be done about it.
Here are some answers:
Why are prices so high? Are only Con Ed customers affected?
While Con Ed has borne much of the brunt of complaints during the last month, it is just one of several utility companies around New York state that surprised customers with big bills recently. PSEG ratepayers on Long Island saw the price of electricity rise about 26% compared to February 2021, Central Hudson Gas & Electric Corp. says its customers in the Hudson Valley could see electric bills rise as much as 46% this winter, and some New York State Electric & Gas ratepayers have reported bills spiking 121 % higher than the month before.
About 70% of the energy used in New York state comes from natural gas, and Con Ed says that’s the primary reason for the sudden increase in electricity costs. While the utility owns the power transmission lines that criss-cross the five boroughs, it does not actually produce energy itself. The PSC sets the rates that Con Ed and other utilities can charge to deliver electricity to homes and the utility passes the cost of the energy to its customers. That means in years like this one where the price of natural gas goes up, New Yorkers will see that reflected on their electric and heating bills.
Would switching to another power company give me cheaper service?
Probably not, and because that power would still be using Con Ed’s transmission lines, you would still have to pay them for that service. While New Yorkers can legally choose what companies supply their electricity, that market is not regulated as closely by the state as utilities like Con Ed and National Grid. William Ferris, the AARP’s New York State Legislature representative, told Gothamist that these private companies often end up charging customers even more.
“The Public Service Commission has well-documented that you really, at the end of the day, don’t get a better deal,” said Ferris. “[You] sometimes may save money in the first three months, but you’re paying more at the later part of the year.”
The commission does publish a list of these “energy service companies”, or ESCOs, that it regulates, but Richard Berkeley, the executive director of the Public Utility Law Project, says switching wouldn’t make much of a difference because many of those companies still buy their electricity from the same suppliers as Con Ed.
“The only options that you have are various types of actual renewable energy. If you can put solar panels on top of your house or your apartment building, [or] if you could put up a windmill [on your property],” Berkeley said.
How are these high prices affecting households around New York state?
No one likes a surprisingly high bill, but advocates say this price hike is coming at a particularly bad time as millions of New Yorkers are still financially struggling due to the COVID-19 pandemic. An analysis of data from utility companies by the Public Utility Law Project found about 1.3 million households in the Empire State are currently facing their service being cut off in the coming months as a result of unpaid utility bills, and adding this extra cost on top of that only further drags down those in debt.
“So many people lost income, family members passed away and we’re still not recovered from the economic crisis,” Berkeley said. “Collectively, New Yorkers owe more than $1.7 billion in unpaid energy bills through the energy utilities. And they have little possibility of being able to pay these back.”
Advocates are urging Hochul and the Legislature to dip into the $12.5 billion bucket of federal pandemic relief funds that the state received last year in order to give low-and-moderate income households dealing with overdue utility bills some relief. The AARP and the Public Utility Law Project are lobbying the governor and legislative leaders to put $1.25 billion of those funds toward eliminating some of the debt in the next budget, which is in the process of being finalized.
What are state officials doing, and what power do they have over utility companies?
Con Ed in particular has long been a favorite scapegoat for public officials, and so far that has not changed. While there has been a lot of public outcry over this issue in recent weeks, elected officials have primarily called for investigations into the utility, while Public Service Commission chair Rory Christian urged Con Ed to amend its billing practices in the coming months.
“While Con Edison included bill inserts and sent out messages on other platforms that natural gas commodity prices were expected to be higher this winter, it did not inform customers that electric commodity prices were also expected to be higher, or in its billing for last month that there was a spike in electric commodity prices,” Christian wrote in a February 11 letter to the utility. “Con Edison should have foreseen the likely electric commodity price spikes and done more to provide advance notice to their customers and other stakeholders.”
But again, Con Ed can’t control the price of power generation, so as long as electricity is reliant on fossil fuels, the price of energy will be tied to the price of gas and oil. Lawmakers would have to fundamentally restructure the state’s power market in order to change that. Several proposals are underway to build new transmission lines that would bring renewable energy from upstate and Canada but those lines are years away from being constructed.
A healthy portion of the utility bill is also made up of state-imposed taxes and fees, and it’s unlikely Albany would roll back any of those.
How long will energy prices be this high?
It’s hard to say, and that is a concern among lawmakers and advocates with the summer months approaching. So far, Con Ed representatives have said they are taking steps to address rising energy costs and how that passes on to consumers.
“We are reviewing all of our practices that affect customer supply costs, including our energy-buying practices, the tools we use to reduce supply price volatility, the way we communicate changes in supply prices, and our programs to help customers who have fallen behind on their bills,” Con Ed spokesman Alan Drury said in a statement.
However, the utility is also currently requesting a rate increase from the state. Con Ed officials say the company needs more than $1.2 billion to upgrade its energy and gas systems to be more resilient to climate change, deliver more power from renewable energy sources, and shore up transmission in the outer boroughs.
That would mean electric bills would increase by 11.2% increase, and gas bills would go up by 18.2%. However, while state lawmakers have expressed frustration with Con Ed’s proposal, Queens State Senator Leroy Comrie, who chairs the Committee on Corporations, Authorities, and Commissions, says utility rates are ultimately up to the Public Service Commission to decide.
“We don’t have a direct legislative position that we can utilize, but the weight of public pressure, the weight of public opinion, and the fact that, I think to a person, every elected official will be willing to admonish Con Edison and request that they make this less hurtful on their consumers, would be respected by Con Edison,” Comrie told Gothamist.
What can people who are having trouble paying their utility bills do?
Advocates and elected officials are urging ratepayers hit with unusually high bills to file a complaint with Con Ed as well as with the New York State Department of Public Service. There are a variety of state programs to help New Yorkers get aid in paying their utility bills depending on household income and size, and you can reach out to your elected representatives for help connecting with those services. Utilities like Con Ed also offer the option of setting up a payment plan, which allows people to more affordably pay back their debt over time. In the meantime, advocates recommend paying what you can afford (even if it’s not the full bill amount) in order to help avoid your service from being shut off for nonpayment.