Why you can’t get Verizon FiOS in New York City

 

You can’t get Verizon FiOS in much of New York City because Verizon has broken its agreement to build out its network, the city says.

Mayor Bill de Blasio ripped Verizon’s failed promises in an audit released June 18 that says Verizon has failed to comply with its October 2008 franchise agreement with the city. The scathing report “documents far-reaching failures and reveals that more than six years after its agreement with the City, Verizon has yet to deliver on the commitments spelled out in the franchise agreement,” a press release from de Blasio’s office says.

It all comes down to the definition of the word “passed.”

Verizon logoUnder the 2008 franchise deal, Verizon agreed that FiOS lines would have “passed” all homes by the end of 2014. “Passed” is a term of art in the cable and communications business that apparently is so common the city and Verizon did not bother to define it in the franchise agreement. That was a bad call by the city’s negotiators: Verizon’s parsing of the word “passed” is in line with Bill Clinton’s parsing of the word “is” in the days of the Monica Lewinsky scandal.

In the audit, the city cites the definition of “passed” used by the Fiber to the Home Council, an industry group:

The number of “Homes Passed” is the potential number of premises to which an operator has capability to connect in a service area, but the premises may or may not be connected to the network. This definition excludes premises that cannot be connected without further installation of substantial cable plant such as feeder and distribution cable (fiber) to reach the area in which a potential subscriber is located.

That’s not how Verizon saw it. It decided the term means:

[G]oing by, past, beyond, or through a place (such as a building), and include[s] no requirement as to how close a place must be approached in order to constitute a ‘passage.’

In practice, the city says, this is how Verizon’s use of the word “passed” has panned out:

Verizon considers all the addresses on a block “passed” if their fiber is in conduit under or on poles over any street that serves as a boundary to that block. Verizon does not deem it necessary for that fiber to have been pulled to a point of entry on the block for the block to be deemed passed.

So the way Verizon sees it, if you live, say, at the corner of West 138th Street and Edgecombe Avenue in Harlem, and Verizon has a FiOS line on Frederick Douglass Boulevard, then Verizon would say FiOS has “passed” your home because its line existed a block away. By this definition, Verizon says, FiOS has “passed” 100 percent of the city’s homes.

Even Time Warner Cable and Cablevision — companies not known for decent customer service — have a better definition of the word “passed.” As the audit explains:

Our understanding is that the cable television industry defines a building as “passed” if it is immediately adjacent to cable facilities and an order for service can be processed by the cable company.

The city got on to this issue because of consumer complaints. As Verizon’s buildout supposedly progressed last year, the city Department of Information Technology and Telecommunications [DoITT] “began to receive anecdotal evidence, largely in the form of consumer complaints, suggesting that Verizon was simultaneously taking credit for ‘passing’ households and declining to accept orders for nonstandard service installations from those households.” A nonstandard service installation is the first installation in an apartment building.

Verizon won’t even go in to buildings in the Manhattan’s richest neighborhoods:

[O]ne property manager from a well-known firm complained that Verizon would not complete the NSI [non-standard installation] at a building on Sutton Place unless 100 percent of the apartment dwellers committed to Verizon FiOS. This property manager also said only two of the eleven multiple dwelling properties he managed had Verizon FiOS and that installations took anywhere from six months to two years.

Verizon’s response to the audit is longer than the audit itself. The company is unhappy that the de Blasio administration is poking around in its business. It said the audit “repeatedly sets forth a variety of irresponsible, inaccurate, and unsupported factual and legal claims about Verizon’s compliance with the Agreement.” Verizon also complains that the audit relies too much on “anecdotal evidence.”

One reason the study is based on “anecdotal evidence” is that Verizon wouldn’t provide the information the city needed to do a firmer audit. To hear the city tell it, Verizon stonewalled its query at every point.

Verizon typically staffed its audit meetings with a battery of attorneys, who regularly interceded between DoITT’s auditors and Verizon’s operational and administrative staff, obstructing and delaying DoITT’s ability to obtain answers to questions and access to documentation and electronic systems.

From the city’s press release:

Currently, some 22 percent of New York City households have no Internet connection; that number jumps to 36 percent for families living in poverty. But even for those who have it, most pay too much for what they get, with the best $40 per month package available to New Yorkers, for example, featuring download and upload speeds that are a fraction of those available in other major cities like San Francisco and Seoul. The lack of competition in the City’s broadband market is one of many issues at the root of this problem.

Verizon FiOS was supposed to compete with Time Warner Cable and Cablevision. So far, its rollout has failed so badly, millions of potential customers can’t even buy it. Now that the city has called out Verizon on its lapses, what action will it take next?

Posted in Cable TV, Internet, Verizon | Leave a comment

Con Edison electricity rates frozen for another year

 

Consumers scored a partial win when the Public Service Commission voted June 17 to extend its freeze on Con Edison electricity rates for another year. That means whatever you pay now is what you’ll be paying through the end of 2016, excepting fluctuations in the price of electricity generation.

On the upside: The Commission’s decision kills the company’s request in January for a rate hike that would have jacked up retail customers’ electric bills by 3.2 percent. That would have brought the typical 300 kilowatt hour monthly bill — about the power used by a New York City apartment — from $82.06 to $85.94.

For now, that 300 kilowatt bill will stay at $82.06.

On the dCon Ed image off Twitterownside: The Commission put off an opportunity to go over the company’s books and look for ways to save consumers money. The decision also leaves unaddressed issues of whether the company’s shareholders profit more than they should from the company’s electric operations.

Mayor de Blasio’s administration supported extending the rate freeze in a filing with the Commission last week. “Perhaps most significantly, there generally will not be any bill impact for New York City customers as a result of the settlement,” the filing said.

The city and environmental groups also appreciated that as part of the settlement, the Commission agreed that Con Ed could spend $68.5 million on its effort to install advanced electric meters in homes and businesses across its service area. Advanced electric meters will let you closely monitor your electric use. That should make it easier for you to figure out how to save money by adjusting your air conditioner, or switching appliances on or off.

The advanced meters will also alert Con Ed more quickly about power outages. The company may find that handy. In another decision June 17, the Commission fined the company $5 million because it failed to fix electric outages quickly enough. According to Con Ed’s own data, a typical power outage lasted 3.02 hours in 2014, up from 2.67 hours in 2013. The average doesn’t count outages caused by major storms.

The $5 million fine will be paid from Con Ed profits that otherwise would have gone to shareholders.

The Commission’s decision only affects electricity prices. An order in 2014 set gas and steam rates through the end of 2016. That means next January, Con Ed could file a big case seeking increases in electricity, gas and steam rates that would take effect in January 2017.

Here’s a link to the state’s file on the rate case.

 

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No savings for you! New York consumer advocate plan faces uphill fight

 

A lot is changing in how New Yorkers buy electricity, gas and communications service. About the only thing staying the same is that consumers have little say in decisions by the state Public Service Commission. Plans for a New York consumer advocate again face an uphill battle in the state Legislature.

We consumers are in a tough spot:

Some state legislators want to give consumers a place at the table when utility issues are decided. A bill passed in the Assembly by a 119-24 vote on June 10 would establish a state utility advocate office. The bill now lies in the state Senate.

Too bad if you think the bill is a good idea. All signs are that it was dead on arrival in the Senate. It’s failed to pass twice before, and Gov. Cuomo and the Republicans who more or less run the Senate have long opposed it. Cuomo has said the state’s Utility Intervention Unit, a group in the Department of State, does a good enough job pushing consumer interests. And the PSC says speaking for consumers is part of its job, so there’s no need for a separate advocate.

Yet Democratic legislators and AARP are trying again. “New York consumers already pick up the $10 million-plus annual tab for their utility companies to push regulators for rate increases,” said Beth Finkel, the state AARP director. She’s talking about this January 2014 AARP study, which noted that New York is one of just 10 states without an “independent, sufficiently funded utility consumer advocate office to fight rate increases on behalf of residential ratepayers or to appeal a rate increase in court.”

From the bill’s statement of purpose:

In other states where such an office exists residential consumers have seen drastic savings in comparison to the actual amount of funding that goes to these offices. California’s Division of Ratepayer Advocates lobbied over 200 times on behalf of California consumers and saved them over $4 billion in rates saved and increases avoided; in fact, they estimate that for every $1 spent representing and advocating on behalf of California’s public utility customers, the average customer saved $153 per year. The creation or an appointed advocate with the powers allotted in this bill would give New York utility customers a voice at the table [and] save them a considerable amount of money when it comes to the utilities they use every day.

New Yorkers stuck with some of the highest utility bills in the country would be pretty happy if a utility advocate could get them just half of that $153 in savings enjoyed by Californians. But it’s not going to happen this year. No savings for you! You’ll just have to hope the PSC and the utility industry have your best interests in mind.

 

Posted in AARP, Cable TV, consumer advocacy, electricity, natural gas, Public Service Commission | 1 Comment

New York electricity bills low for upstate industry

 

From Capital New York:

This will shock every New Yorker fed up with high electricity prices: there’s a class of electric customers in the Empire State that has sharply lowered its costs to below national averages, thanks to effective lobbying and sympathetic state policy.

Read the rest at this link.

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Con Edison solar rules help customers escape high prices

 

The sun is shining on the solar power business in New York City and Westchester County. One reason is that many people have found that installing solar panels is a good way to beat Con Edison’s high residential and commercial prices. But Con Ed deserves credit: It’s pursuing policies that make going solar easier for its customers.

In 2014, solar panels in Con Ed territory were capable of producing 59.82 megawatts of power. So far in 2015, Con Ed customers have added another 7.7 megawatts. That’s 210 times more solar than was on the system in 2005. When the sun is out, Con Ed solar customers generate enough power for around 27,000 homes. More than 4,700 Con Ed residential and business customers now have rooftop solar setups, the company said in a recent news release.

Con Edison solar growthEveryone watching the utility business expects solar to boom in New York and elsewhere. High utility prices aren’t the only factor. The cost of installing solar panels is falling. A home solar setup can cost $30,000 or more. But the solar industry has come up with financing plans that bring the monthly cost to below your utility bill.

It’s not easy for some utility companies to handle the growth. In Hawaii, sky-high electricity prices helped solar grow so fast, utility companies had a hard time accommodating the power put into the grid by rooftop solar panels. Elsewhere, utilities have fought home solar. Florida adds irony to its Sunshine State nickname with state laws that effectively shut out the rooftop solar panel industry. The state’s utility companies have pushed back hard against anything that makes it easy for homeowners to install rooftop panels.

In New York, the big fight came in the 1990s, when Gov. George Pataki’s administration deregulated electric markets via orders from the Public Service Commission. Many people in the utility industry hated the move, and some [rightly] complained that the state acted without enough public input, especially from the Legislature. Deregulation has probably cost utility customers billions.

But New York’s move may pay off in ways unforeseen at the time it took effect. Deregulation took Con Edison and other utility companies out of the power generation business. Now Con Ed is agnostic about where electricity is generated. The company sees that enabling customers to better use its transmission system is an important goal of its business. For many, the power grid works two ways: They get credit when their solar panels put power into the grid, and pay when they take power out.

And the Public Service Commission is studying new regulations aimed at making it easier for residential and commercial utility customers to use solar and other energy-generating technology. This document offers an easy-to-understand explanation of the aims of the Reforming the Energy Vision effort.

But even without Reforming the Energy Vision, state rules have already let Con Ed customers expand their solar use. In 2014, the company says, 2,138 of its New York City customers installed solar panels; another 1,484 customers installed panels in Westchester. The technology is here, it can save you money, and New York policymakers are trying to make it easy to use.

Update, April 29: This post was edited for clarity.

Posted in Alternate energy, Con Ed, Public Service Commission, Solar | Leave a comment

Comcast-Time Warner merger collapses

 

So much for the worries over a Comcast-Time Warner merger. Bloomberg news reported Thursday, April 23 that Comcast is calling off its plans to absorb Time Warner because of federal government opposition to the $45.2 billion deal.

As The New York Times figures it, after the merger Comcast would have ended up with 57 percent of the nation’s broadband market, and just under 30 percent of the pay television market. The deal would have had a big impact across New York. Comcast would have gained 2.2 million Time Warner customers in the state. If the merger succeeded, the New York market would have amounted to about 8 percent of Comcast’s cable and broadband business.

2015-04 Time Warner Comcast logoOne issue raised by merger opponents was that Comcast broke promises made to the federal government when it acquired NBCUniversal. Sen. Al Franken, the Minnesota Democrat and the leading opponent of the merger, cited some of Comcast’s broken promises in an opinion piece for TechCrunch. He notes that Comcast lied about promises to fairly locate cable channels that compete with NBCUniversal’s networks. For example, Franken said, Comcast gave CNBC network a prime spot on its lineup and pushed CNBC competitor Bloomberg TV to the back channels. Franken saw that as a breach of Comcast’s promise to put similar channels near each other.

Franken wrote that if Comcast was allowed to buy Time Warner Cable,

This colossus of a company would have unmatched power to destroy its competition, abuse its customers, and bully the government agencies charged with regulating it. Consumers would face even higher prices, even fewer choices, and, if you can believe such a thing is possible, even worse service.

The merger’s collapse frees New York regulators from their promise to thoroughly review the deal. Public Service Commission officials threatened to block the merger in New York if it was found not in the “public interest.” But the commission never decided the matter. PSC chairwoman Audrey Zibelman said the commission was waiting to see how the federal government handled the issue.

Public Service Commission staff worried that the merged company would “discourage new entries into these markets, stifling technological innovation and further competition, while keeping prices artificially high.” The PSC staff also noted that Comcast promised to boost capital spending on its system if the merger was approved, but did not make any specific commitments. There’s a good argument that the discussion over the merger overlooked some big issues facing consumers, including high prices, poor customer service and misleading bills.

Downplayed in some stories about the merger’s collapse is whether it made economic sense given growing customer defection from cable TV. Lots of cable customers are ditching traditional cable TV in favor of Internet services like Netflix, Hulu, and CBS All Access that offer all the programming they want for a lot less money. With more people getting TV over the Internet, one has to wonder whether Time Warner was worth Comcast’s price.

Posted in Cable TV, Comcast, Public Service Commission, Time Warner Cable | Leave a comment

Con Edison customers buy more power at higher prices

 

Despite rising prices, Con Edison customers have been using more and more electricity over the last two decades. The trend ought to please Con Ed shareholders. But it’s tough on New Yorkers’ wallets.

Here’s one reason your Con Ed bill has grown over the years: Adjusted for inflation, the per-kilowatt hour price of Con Ed’s electricity was up 9 percent over the 20-year period from 1994 to 2013. This chart tracks the annual per-kilowatt hour price change, adjusted for inflation into 2013 dollars. Notice that the price was fairly steady — and even declining — for much of the 1990s. But once New York’s policy of utility deregulation hit with full force around 1999, prices began fluctuating and heading higher.

2015-04 shows Con Ed residential prices in inflation-adjusted 2013 money

 

 

We grumble a lot about our power bills. These high prices are a big part of that — year after year, Con Edison’s residential prices are the highest of any big-city utility.

But there’s another reason your bill is up: You’re probably using more power. A typical Con Edison residential customer used 405 kilowatt hours of electricity per month in 2013. That’s 17.4 percent more than the 345 kilowatt hours of electricity a Con Ed residential customer used in 1994.

Put together higher prices and higher power use, and an average Con Ed residential bill — adjusted for inflation — was 28 percent higher in 2013 than in 1994.

This chart illustrates how residential power bills have changed over the years. The squiggly blue line, indexed on the left side of the chart, shows how much power a typical Con Edison residential customer uses each month. The squiggly red line, indexed on the chart’s right side, shows how much typical bills changed.

2015-03-20 graph shows typical Con Ed usage and prices 1994-2013

 

Notice that the squiggly blue line on the second chart peaked in 2004, when a typical Con Ed customer was using about 434 kilowatt hours of electricity per month. Usage has been more or less dropping since then, and seemed to bottom out in the depth of the Great Recession. It’ll be interesting to see if per-customer electricity use fully rebounds from that trough — or if conservation and more efficient electric appliances further cut in to that number.

It will also be interesting to see if Con Edison can continue extracting more revenue from its residential customers, no matter how much power they use.

Con Ed’s rates have been frozen since 2013. Con Ed bosses are now in talks with the state Public Service Commission over whether to extend that freeze through the end of 2016. An agreement would suspend a rate increase request Con Ed filed in January. It would also spare Con Ed an exhaustive state review of its spending that would be aimed at ensuring consumers are paying fair prices.

Of course, Con Ed’s rate increase request only applies to the portion of your bill that covers the cost of the transformers, cables, wires, meters and other equipment that brings power to your home. It doesn’t cover the price of power itself. Con Ed was forced to sell off its generators when the state deregulated electricity back in the 1990s, and now buys nearly all its power on the open market.

So while the transmission part of your bill is still regulated by the state, the price of the actual electricity you use can fluctuate a lot.

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Con Edison customers aren’t the only people afflicted with high electricity rates. See my recent piece on Capital New York that discusses the high rates charged by other utilities in the state.

A lot of readers visit this blog looking for ways to reduce their energy costs. I’ve written before that home solar panels are one way to beat Con Ed’s prices.  Solar is not the only game in town — here’s a rundown of the different types of technology available to utility customers.

Be wary of energy service companies — better known as ESCOs — which say they can lower your Con Ed bill. They can’t back up their claims of lower prices, and the state has struggled to figure out how to make their pricing more transparent.

Posted in Con Ed, Deregulation, electricity | Leave a comment

Con Edison wants big electric rate increase

 

Con Edison wants a big electric rate increase in January 2016. It filed with the New York Public Service Commission on January 30 for a one-year rate hike it says will boost electric charges an average 3.2 percent.2015-01 Con Ed 2016 Rate Proposal

What you’ll really pay depends a lot on who you are and how much power you use. It’ll also depend on the price of electricity itself, so be skeptical about Con Ed’s claims about the overall size of the rate hike. In the end, you may pay more or less, depending on energy prices. Con Ed doesn’t control its supply charge, which is based on the price of the electricity it buys from generating companies.

But you can take to the bank Con Ed’s statements about the delivery charges, which it wants to raise an average 7.2 percent. That’s what the case is really about. You’d be right to question whether anyone in Albany will let the company raise its delivery rates by 7.2 percent, which is far ahead of the general inflation rate.

Keeping all that in mind, let’s go to the Con Ed press release:

A typical bill for a New York City residential customer using 300 kWh per month would rise from $82.06 to $85.94, an increase of 4.7 percent (7.9 percent for delivery).  A typical bill for a Westchester residential customer using 450 kWh per month would rise from $114.98 to $119.68, a 4.1 percent increase (7.2 percent for delivery).  For a typical commercial customer using 10,800 kWh per month with a peak demand of 30 kW, the monthly bill would rise from $2,173.08 to $2,236.71, a 2.9 percent increase (6.5 percent for delivery).

Note that the proposed delivery charge increase is higher for New York City residential customers — 7.9 percent — and lower for commercial customers — 6.5 percent.

Cliche alert: This post is about to use the phrase “kabuki dance.”

It takes 11 months for the Public Service Commission to decide big rate cases like this. So now the PSC and Con Ed will enter into a long kabuki dance over whether the rate increase is fair, whether the company’s expenses are in order, and myriad other issues.

Like an, uh, kabuki dance, the whole thing will be choreographed in a way well understood by the participants.  The PSC’s staff will investigate as best it can whether the company’s spending is in line with customer needs. Con Ed, advocacy groups and others with a stake in the company’s pricing will argue for and against the request.

One thing worth noting about Con Ed’s proposal is that it asks for a 10 percent return on equity, which is the percentage return the company is allowed to make from the estimated value of its gas mains, transformers, transmission wires and other infrastructure.

Con Ed’s current rates, which will stay in effect at least to the end of 2015, allow for a maximum 9.8 percent rate of return. So though it wants to increase your delivery charges by an average 7.2 percent, the company expects little of that increase will land on its bottom line. Con Ed says it plans to spend most of the $368 million it would raise in the increase on storm hardening and other infrastructure upgrades.

It’s early days yet for this case. Con Edison has already filed hundreds of pages of documents with the Public Service Commission. It’s not light reading. Here’s a fact sheet with some wonky information about the proposal. And here’s a link to the PSC case file on the proposal.

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It’s a fair question whether consumers will be adequately represented in this rate case. Gov. Cuomo’s Utility Intervention Unit has been criticized by advocates as underfunded and not aggressive enough in its representation of average ratepayers. The Public Service Commission’s staff does exhaustive study of rate cases, but not necessarily with consumer interests in mind.

One voice likely to be missing in the Con Ed case this year is Gerald Norlander, who is retiring as executive director of the Public Utility Law Project. Gerry advocated for low-income people. But he was often a de facto advocate for all New Yorkers, given the poor state of consumer advocacy in New York utility cases. He was also a valuable source for reporters who cover New York utility issues. NYP&L wishes him a long and happy retirement.

Update, February 1: See my story about the new Con Ed rate case in the New York Post.

Posted in Con Ed, consumer advocacy, electricity, Public Service Commission, PULP | Leave a comment

State seeks to improve aid to New Yorkers who can’t pay utility bills

 

Lots of New Yorkers can’t pay their utility bills.

As of November, 1.2 million people were 60 or more days behind with Con Edison, National Grid and other utilities. Their total arrearages topped $756 million. Last year, electric and gas companies cut service to 277,000 customers, and wrote off $195 million worth of bills they expect to never collect, Public Service Commission data shows.

Sometimes falling behind leads to tragedy. Three Bronx children died in an October 2013 fire set off as they played with candles their mother set out after Con Edison cut power to their apartment for nonpayment.

The Commission wants to improve its programs to help low-income people with their utility bills. It has ordered its staff “to conduct an investigation of utility low income programs, to identify best practices, and develop a set of recommendations for how best to optimize” the programs.

In a statement, PSC chair Audrey Zibelman said the review will “assess the adequacy of the Commission’s low-income programs to ensure regulated utilities adhere to best practices in regards to the services provided to all low-income customers throughout New York. The review will provide the opportunity to standardize utility low-income programs to reflect best practices and will help inform future rate cases, improve transparency, and help stakeholders, especially low-income advocates, participate more fully in the process.”

Low-income people get a variety of discounts on their utility bills. The appendix to the Commission’s January 9 order establishing the proceeding shows the variation between different utility companies.

Con Edison, for example, gives low-income electric customers a $9.50 monthly discount. It discounts gas bills according to low-income customers’ use. In National Grid’s upstate territory, low-income people get a flat $5 per month discount on their electric bills, a $15 per month electric bill discount if they use electricity for heat, and a flat $10.50 per month discount on their gas bills. [If you pull up a copy of the order, note that the Commission still refers to National Grid’s upstate territory by its old name, Niagara Mohawk.]

Eligibility rules vary. Some utilities enroll those in the state’s Low Income Home Energy Assistance Program. Others, including Con Ed, take customers from a variety of programs, including Food Stamps and Medicaid.

The commission wants more consistent rules that would make its rate cases easier to handle. “We expect a majority of the utilities to have rate cases pending before the Commission in 2015,” the January 9 order says. “While low income programs, in aggregate, account for less than 0.8% of utility revenues, a substantial amount of time is spent by the parties in rate cases litigating or negotiating settlement of low income program designs and funding levels. This proceeding is expected to assist the parties, especially low income advocates, in efficiently managing their finite resources.”

AARP, the Public Utility Law Project, NYPIRG and Consumers Union issued a joint statement calling the Commission’s decision a “major and unprecedented step that could help millions of utility consumers across New York State.”

Posted in AARP, Public Service Commission, PULP | Leave a comment

Home electricity and heating costs forecast to drop this winter

 

Expect lower electricity and heating costs in New York this winter, government energy experts say.

Electricity prices statewide should be about 20 percent lower this winter compared to last winter, the Public Service Commission says. In a news release October 23, the commission also forecast lower natural gas prices, though it didn’t say by how much. Con Edison says the price of natural gas for heating should be about 10 percent less than last year.

Lower prices are expected despite the fact that the natural gas industry appears to be a long way from solving the shortage of pipelines serving New York and New England. The pipeline shortage combined with frigid weather led to a shocking spike in electricity and natural gas prices across the state last year.

There’s plenty of gas available, notwithstanding New York’s reluctance to approve fracking in the western part of the state. Getting it to customers remains a problem, the US Energy Information Administration says. But the EIA’s forecasters do not believe the shortage will be as much of an issue this year. They do say, however, that supplies remain tight in New York, and are even tighter in the New England states.

Nationally, natural gas prices will drop about 5 percent from last winter, and electricity prices will drop 2 percent, the EIA forecasts. People who heat with oil can cheer too. Their costs should drop about 15 percent, thanks to the global collapse in oil prices.

Whether the Energy Information Administration estimates prove accurate depends on the weather. If temperatures are 10 percent colder than forecast, electricity prices will rise 2 percent, and natural gas prices will rise 6 percent. If temperatures are 10 percent warmer than forecast, electricity prices will drop 5 percent and gas prices will drop 12 percent.

Maybe you’re thinking about switching to an energy service company, or ESCO, to shave your electric or gas bill even further. Think carefully – there’s no evidence these companies have met their promise of lower gas and electricity prices. Also, keep in mind that ESCOs mark up their prices to make a profit. Con Edison and other utilities sell you gas or electricity at cost.

In its October 23 news release, the Public Service Commission suggests consumers worried about price spikes like the one last year could sign up for an ESCO’s flat-rate plan. The commission has successfully encouraged ESCOs to offer more such plans. “In Con Edison’s service territory … only five of the approximately 60 ESCOs offering electricity, offered fixed price products last year,” the release says. “Now, nearly 40 ESCOs in Con Edison’s service territory offer fixed-price electricity products.”

However, the plans may be a bad deal for you. If the state and federal forecasters are right that prices will drop this winter, why would you lock in a high price with one of these plans? Certainty costs money. You should approach these plans skeptically.

If you must go with an ESCO, start by visiting the state’s Ask PSC site. You can compare advertised prices on the state’s Power to Choose site. But I’m going to stay it again – be skeptical. The information on the Power to Choose site won’t tell you what you will really pay if you take an ESCO’s deal, and the state has still not figured out how to give consumers reliable information about ESCO pricing.

Keep in mind: Whether or not you go with an ESCO, you’ll still have to pay utilities like Con Edison to deliver your electricity or gas. There’s no escaping the power company.

Update, October 25: This post has been edited for clarity.

Posted in electricity, energy service companies, natural gas, Public Service Commission | Leave a comment