First Utility Rate Hike Hits NY in August
Though many in New York are already having a hard time with their bills, our utility bills are about to get steeper. Utility companies, like Con Ed, will increase electric and natural gas delivery rates more than once over the next few years. The first rate hike, from Con Ed, hits New York City and Westchester County this month. Let’s look into all the details behind the NY utility rate hike.
Why Utilities Are Raising Rates
New York utility companies can increase the delivery charge portion of your electric bill. This charge covers the cost of delivering electricity, modifying or improving the grid, and returns for investors. But these must be first approved by the PSC.
Following changes to NY’s green energy requirements, electric companies are under pressure to make changes to comply. When asking the PSC for the latest rate hikes, moving our state away from fossil fuels is a primary justification. From a report on ABC 7 NY quotes a Con Ed spokesman saying, “The system as it is now probably couldn’t handle everyone switching to electrification, so we have to update the grid.”
The utilities also want the extra funds to improve the reliability of current infrastructure. For example, in a recent rate case National Grid listed pipe replacement costs at $500 million per year.
How Much More Will You Pay for This Rate Hike?
The Con Ed rate increase this August will bump up electric bills by about 9%. For a New York City resident using around 280 kWh per month, this translates to more than $7 per bill. Westchester residents consuming about 425 kWh per month will pay over $10 more per bill.
Again, the August rate hike is just the first in a long line of increases for utilities in NY. Central Hudson filed a request to increase electric distribution charges by 16% and gas by 19%. In June, NYSEG asked for a 22% increase in distribution charges over the next three years. And Con Ed will hit customers again with more rate increases in 2024 and 2025.
Are Utility Rates Unaffordable?
In March 2022, 1.2 million New Yorkers were behind on utility bills. That equals about 6% of the state population. Their combined bills totaled $1.8 billion. In January 2023, Governor Hochul announced over $800 million in debt forgiveness and discounts for New Yorkers struggling to pay utility bills.
A reliable electric grid and decrease in fossil fuel consumption are important. However, it’s clear many New York residents do not have the means to keep up with utility rate hikes.
Stay informed on this story and more at https://www.nyenergyratings.com.