Media stories from across the state are reporting the same thing – New York’s energy prices are going up, a lot. One ConEd customer in New York City was reported to have seen her utility bill triple in one month from $163.73 in December to a whopping $512.07 by the end of January.
She’s not alone: Electricity prices in and around New York City are up 28.2%.
And the problem is not limited to New York City. For example, one New York State Senator pointed out that one Hudson Valley utility “issued an alert regarding increased energy costs stating that they are projecting that natural gas bills would increase 19%, electric bills by 46%, and combination electric and natural gas bills by 29%.”
It’s clear that all of us are feeling the pinch, but those who are struggling financially are facing the breaking point. According to a report released by the Public Utility Law Project, nearly 1.3 million New York households were more than $1.7 billion in arrears on energy bills in December 2021, before the recent rate hikes.
So, what happened?
First, let’s take a step back and look at your utility bill. In general, there are three main charges to your bill – taxes and fees, the “delivery charge,” and the “supply charge.”
The delivery charge is for maintaining the system that transports the energy from where it’s generated to your home: the wires, towers, and other related infrastructure. Your utility assesses that charge, and that financial decision is regulated by the state, through the Public Service Commission (PSC).
The supply charge, on the other hand, is not the result of a utility decision. Utilities typically do not generate their own energy, but they are responsible for transporting it to ratepayers. A third party generates the power and sells that energy to the consumer. It is the supply charge that is currently on the rise.
This winter the cost of natural gas, which is used to heat homes and generate electricity, has risen sharply. These bill increases are being fueled by a global increase in natural gas prices due to the colder-than-normal weather driving up usage, increased economic activity, and increased international demand for natural gas.
Of course, that could all get worse depending on the level of Russian aggression toward Ukraine.
Why does New York have this complicated system? It’s the result of decisions made decades ago to “deregulate” energy in New York. The selling point was that deregulation would provide competition that would limit energy costs. It hasn’t worked out like that. New York had some of the highest electric rates in the nation prior to deregulation and it still does now.
New York – like much of the rest of the nation – has a complicated system that results in utility ratepayers suffering from a double whammy of increasing rates and a bewildering marketplace. It is incredibly difficult for most New Yorkers to remain on top of the goings-on of the PSC. The only people who can attend PSC meetings on a regular basis are most likely those whose job depends on it, i.e., industry lobbyists.
Ironically, New York has an organization that existed to fight for ratepayers but was all-but-eliminated in the early 1990s. In 1991, then-Governor Mario Cuomo issued Executive Order No. 141, establishing a Citizens Utility Board. CUB’s purpose was to provide a seat for ratepayers in the regulatory process. The CUB would have lawyers and economists defending ratepayers before the Public Service Commission (PSC), ensuring that their viewpoint be heard when decisions impacting millions of consumers were being made. Over 20,000 New Yorkers quickly joined.
As an independent entity entirely reliant upon voluntary contributions, the most invaluable section of this Executive Order gave CUB access to state agency mailings. However, in 1995, then-Governor George Pataki revoked this privilege. He claimed that since the goal of the Public Service Commission was to protect consumers, allowing CUB even this minimal privilege was unnecessary. Since that time, CUB has been dormant.
As ratepayers face big hikes in utility rates, it is clear that New York should bring its Citizens Utility Board (CUB) out of hibernation. Getting CUB started up will take some time, but there is no reason to wait.
Yet, what can you do to offset utility costs today? If you’ve been hit with an astronomical electric bill, here are three example of immediate steps that you can take:
- File a complaint with your utility and with the Department of Public Service.
- Look into state programs that may help in paying your utility bills. Governor Kathy Hochul recently publicized a list.
- Utilities also offer the option of setting up a payment plan that could help you pay off big price hikes more easily.
Over the longer haul however, more aggressive ratepayer protections are needed. And there needs to be a grizzly bear of an advocate to do it. Now’s the time for Governor Hochul to bring CUB out of hibernation.
Blair Horner is executive director of the New York Public Interest Research Group.
The views expressed by commentators are solely those of the authors. They do not necessarily reflect the views of this station or its management.