New Yorkers struggle to pay utility bills as electricity prices soar
More than 1mn customers in arrears prompts action by state government
Energy price inflation is hitting home in New York, where electricity rates have shocked residents
opening their utility bills.
For January, the bill for an New York City residence using 300 kilowatt-hours of electricity was
$123.65 versus $82.80 in December, a 50 per cent increase, according to Con Edison, the local
utility company. Spot market prices dropped from January to February but were still on average 79
per cent higher year over year, according to S&P Global.
New York is experiencing some of the most dramatic increases in a broad national rise in retail
electricity prices, driven by a rebound in demand and an increase in the cost of natural gas burnt at
power stations. The price of power is helping feed US consumer price inflation that is the highest in
40 years.
Across all of New York state, roughly 1.3mn residential customers are behind on payments worth
$1.7bn, a historic record, according to the Public Utility Law Project of New York.
“It’s a terrible time for something like this to happen,” said Avi Singh, who owns a restaurant in
Brooklyn. His electricity bill jumped 50 per cent from December to January.
Electricity bills are broken down into delivery and supply charges. While utility companies cannot
alter delivery charges without approval from their regulator, supply charges are determined by the
market.
Average supply charges for Con Edison jumped from $0.08 per kWh in December to $0.20 per
kWh in January, similar to the increase in electricity prices on New York’s spot market.
Con Edison said that an increase in wholesale power prices driven by generators’ gas costs, as well
as higher demand because of cold weather and their billing process, were the factors behind the
recent rise in utility bills.
“We buy the energy on the wholesale market and provide it to customers at the same price we
paid,” the company said.
In addition to the spot market, utilities buy contracted power in advance to help smooth price
volatility. Con Edison said it would apply the full value of its contracted buying programmes to
help reduce supply costs this month by about 9 cents a kWh, responding to a request from the New
York Public Service Commission.
Approximately 14 per cent of Con Edison’s 3.4mn residential and commercial customers are more
than two months behind on their bill payments. The total number in arrears has increased by 42
per cent since before the pandemic. Over 175,000 customers received “final termination” or
disconnection notices in February, according to documents the utility sent to the NYPSC.
“There’s a lot that can happen from these unanticipated expenses,” said Diana Hernández, an
energy insecurity expert at Columbia University, including potentially sending households into a
“downward spiral” in which they cannot pay for food and rent.
New York state lawmakers have proposed at least $400mn in next year’s budget to assist
households that are behind on utility payments. On March 1, Kathy Hochul, New York governor,
announced a campaign to raise awareness about energy assistance programmes.
But customers say the programmes are difficult to
use and provide too little to cover the jump in
electricity costs.
Jennifer Vargas, a Bronx resident, said the 50 per
cent rise in her January Con Edison bill cancelled out
the $25 Home Energy Assistance Program cheque
she normally receives.
“I’m just going to have to put the credit cards
together. I put it on the card or pay it late, because
it’s a big difference I wasn’t anticipating,” she said.