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

Prices up, but cool weather eases summer Con Edison electric bills

 

New York had fine summer weather this year — not too hot, and only a few days when temperatures jumped into the 90s. Electricity prices were up a bit this summer, but you probably used your air conditioner less. That means you bought less power, and thus shaved a few bucks from your Con Edison electric bills.ol summer weather lowered electricity use and eased Con Ed electricity bills

Con Ed’s data tells the story. This graph shows the cost of electricity in July 2014 was lower than in July 2013. Customers who used 300 kilowatt hours of power in both July 2013 and July 2014 paid 5.2 percent less this year than last.

But the good times did not last all summer. Con Ed prices in August 2014 were higher than in August 2013. Customers who used 300 kilowatt hours in both August 2013 and August 2014 paid 10.6 percent more this year.

Generation costs drove the difference. Con Ed’s charges to maintain wires, cables and transformers — labeled as delivery charges on your bill — changed hardly at all this year. In February, the Public Service Commission froze that part of your Con Ed bill for this year and next.

But supply charges — what Con Ed pays generating companies — have fluctuated. During the summer of 2013, generating companies’ charges spiked when the weather got hot in July. Cooler weather helped keep generating companies’ prices steady from July to August in 2014. But overall, generators’ prices were slightly higher this summer than last.

For an imaginary customer who uses 300 kilowatt hours of electricity every month, July and August bills in 2014 were about 2 percent higher than July and August bills in 2013. But hardly anyone uses the same amount of electricity one month to the next. This summer’s cool weather meant people used less electricity to run air conditioners. Because they used less, their bills were probably slightly smaller, despite this year’s higher prices.

All of the above assumes you bought your power directly from Con Edison, and not from an energy service company. There’s no reliable data on energy service companies’ prices, but they are probably higher than Con Ed’s charges.

Con Ed’s own data shows it delivered a lot less electricity during the summer of 2014 than the summer of 2013.

Cool summer weather lowered electricity use and eased Con Ed electricity billsThis graph shows the total number of megawatt hours Con Ed sold in July and August both years. You can see that electricity use was off quite a bit this year. Con Ed sold 8 percent less electricity in July 2014 than in July 2013. It sold 2 percent less electricity in August 2014 than in August 2013. Added up, the numbers show that total electricity sales in Con Ed’s territory in New York City and Westchester County was down 5.2 percent in July and August 2014 compared to the same period in 2013.

Here’s a fun way to understand just how much less power Con Ed customers used in the summer of 2014: Imagine that everyone who lived in 1.78 million apartments in New York City simply packed up and headed for the Hamptons or the Jersey Shore or the Catskills for all of July. That’s the figure you get when you divide the drop in electricity usage in July by the 300 kilowatt hours used in a typical apartment each month.

If the 1.78 million figure sounds outlandish, understand that most of the power Con Edison sells goes to businesses. In 2013, Con Ed told investors that 70 percent of the electricity it sells goes to commercial customers, and 2 percent goes to industrial customers. The company’s residential customers use just 28 percent of the power it sells. The city’s office buildings, shops and businesses use far more electricity than its residences.

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Most readers come to this blog looking for information on how to lower their electric bills. Over the last few months, I’ve written several news articles about how alternative energy technology is rapidly becoming cheap enough for home use.

This article in The Wall Street Journal discusses how Con Ed’s high electricity prices are expected to spur more of its residential customers to install home solar electric generating systems. I also wrote a story for MarketWatch.com about how to finance home solar setups. This MarketWatch.com story discusses solar and other alternate energy technologies that are ready for home use.

I really liked this recent story in The New York Times about how solar and wind power are cutting into the traditional electricity generating business.  Alternative energy isn’t so alternative anymore.

Posted in Alternate energy, Con Ed, electricity | Leave a comment

Sunny days ahead for solar electricity in New York

 

Alternative energy isn’t a big part of the electric power mix in New York. Renewables like solar, wind, and biomass account for just 6.5 percent of the electricity generated in the state. The US Energy Information Administration says natural gas is the most-used fuel for electricity generation, followed by nuclear and hydro.

2014-04 NY elecricity generation by source from EIASolar will be a bigger part of the mix in coming years, say electric industry experts. Analysts at Sanford C. Bernstein, a Wall Street research firm, say solar electricity is poised for big growth. And surprisingly, Bernstein says, New York is a prime market for solar – even though our weather isn’t as sunny as Arizona or Florida.

One reason for New Yorkers to seek power from the sun is high Con Ed electricity prices. Electricity costs so much in New York that it’s cheaper for Con Ed customers to get electricity from solar panels, Bernstein says. The firm figures solar could end up taking 14 percent of Con Ed’s electricity revenue.

Nationwide, Bernstein says, home and business solar panels contribute just 0.2 percent of the US retail electricity supply. But the firm’s researchers say home and commercial solar electricity installations are increasing at a rate of around 50 percent per year. It expects solar to keep growing at that pace as the price of solar equipment comes down.

New York regulators are trying to figure out how to accommodate solar and other alternate energy sources, and are seeking advice from consumers and the energy industry. [Here is my earlier post on the topic.]

But New York is already well ahead in the game.

The state passed a law in 1997 providing for net metering, which requires Con Edison and other utilities to account not just for the electricity its customers take from the grid, but also for the power they put back into it. The state’s decision in the mid-1990s to deregulate electricity markets – which likely has raised electricity prices – has aided the growth of solar and other alternative energy sources. Because of deregulation, Con Ed today generates very little power. Its main business now is maintaining the local electric grid. Deregulation has made the company agnostic on whether electricity comes from big power plants in Astoria or home solar panels.

Plenty of businesses are getting in on the solar trend. Companies like Sunrun and Solar City will arrange financing and hire local contractors to install home solar systems. You can get a solar setup with a lease, or you can buy one outright with a loan or cash. If you lease a system, you make a monthly payment similar to an electric bill. The installer retains ownership of the system, and will come around to your home every few months to make sure everything works properly.

Of course, solar isn’t the only possibility for homeowners. See my MarketWatch.com story for more on how new technology will let you make your own electricity.

 

Posted in Alternate energy, Deregulation, electricity, Public Service Commission, Solar | 1 Comment

State swears it can improve New York’s cable and Internet service

 

Cable TV and Internet operator Comcast is raising its profile in New York. For one thing, it wants to pull the GE sign from atop 30 Rockefeller Plaza, and put its name up in its place.

Comcast-LogoBut the biggie is Comcast’s wish to take over Time Warner Cable, the state’s dominant cable and Internet operator. Time Warner operates in nearly all of New York’s 62 counties. It’s in four of the five New York City boroughs — it serves all of Manhattan, Queens and Staten Island, as well as the northwest corner of Brooklyn.

The merger faces a gantlet of reviews by Washington bureaucrats and politicians. It also faces scrutiny in New York, thanks to a state law passed in April that gives the Public Service Commission the power to veto cable franchise agreements if they are not in the public interest.

What does that mean? Public Service Commission chairperson Audrey Zibelman explains: “To determine whether the proposed transaction is in the public interest, the Commission will examine the proposal to ensure services the merged company would provide will be better than the service customers currently receive.”

Another clue about the state’s intentions for the merger, from a press release by Gov. Cuomo’s office last month:The PSC will critically review the protections being offered to low-income customers as well as how the proposed merger might impact consumer pricing and telecommunication competition overall.”

Almost everybody hates the cable company.  A study last year found that consumers are more likely to curse when they call the cable company than almost any other business. The only companies that hear more cursing from clients are home contractors and — get this — satellite TV companies.

Who can blame us customers for hating the cable people? If you’ve ever looked at your cable bill, you might wonder what all the fine print means. A few months ago, I couldn’t get a Time Warner phone rep to explain why I was paying $10 per month for something called a “variety pack,” one of several unexplainable items on my bill.

This 2013 report by the American Customer Satisfaction Survey found only one company in America more hated than Time Warner Cable or Comcast — it is the Long Island Power Authority. In the ACSI’s 2014 report, the companies performed even worse. From the report:

Time Warner Cable lags behind the entire industry following its second consecutive yearly  decline, down 7% to an all-time low of 56. The combination of low and downward-trending customer satisfaction for both Comcast and Time Warner Cable is cause for concern amid merger talks between the two companies. The issue at stake is not that the proposed merger will limit competition as the service territories of the two companies do not overlap. Instead, it is the question of whether a combination of two pay-TV providers with such poor records could possibly create a better customer experience, especially given the volume of evidence from ACSI data suggesting that mergers in service industries tend to damage satisfaction—at least in the short term.

Time Warner and Comcast offer several justifications for the merger in this May 15 PSC filing. One is: “The transaction will have no negative effect on competition.” That’s because there’s no competition now between Time Warner and Comcast, the petition says. The corollary, of course, is that the merger won’t have a positive effect on competition either.

The companies’ PSC filing offers some upsides for Time Warner customers, such as better phone service. Comcast is also promising to improve Time Warner’s transition to all digital service, which it says will give customers more Internet bandwidth and faster data speeds.

Comcast offered me this comment on the state’s role in the merger: “We’re cooperating with local and state groups on related inquiries and look forward to these opportunities to further share the consumer benefits of the transaction.”

The state is giving you a chance to gripe about the merger in person. It plans a public statement hearing on the merger on Thursday, June 19, at the Public Service Commission’s Manhattan office, at 90 Church St. The event includes an informational forum at 6 p.m., followed by the hearing at 7:30 p.m.

For a take on another aspect of this issue, check out this Huffington Post story by Bruce Kushnick of the New Networks Institute.

Comcast and Time Warner aren’t the only data and Internet game in town. Check out my Wall Street Journal story on how Verizon has gone all digital in part of the Rockaways in Queens.

Update, July 19: Check out the presentation by New York’s Utility Project at the PSC’s hearing on the merger held July 18 in Albany.

Update, October 2: The PSC has put off a decision on this case to November 13.

Posted in Cable TV, Comcast, Internet, Time Warner Cable | Leave a comment

Natural gas prices drive up summer Con Edison electric bills

 

Summer air conditioning season is upon us – which means your Con Edison electric bills for June, July and August will likely be higher than what you pay in the spring or fall.

How your bills this summer compare to last year will depend a lot on the prices charged by electricity producers. Those prices, in turn, depend on the price of natural gas, which fuels most electricity generators in New York. Federal number-crunchers figure the price of natural gas will be up this summer.

So even if you use the same amount of electricity this summer as last summer, prepare to pay more. If the summer heat has you running your air conditioner more than usual, your bill will be even higher.

That natural gas will be the driving force behind New York’s electricity prices this summer is the result of state officials’ decision last winter to hold level Con Edison’s charges for maintaining the wires and transformers that deliver power to your home. The decision means that Con Edison’s share of your bill – what is called the delivery charge – should be the same this summer as it was last summer.

In recent years, rising Con Ed delivery charges have been the main driver behind rising overall prices. These charts tell the story. They are based on state government’s tracking of typical Con Edison bills for the month of July. The data only runs to 2012.

2014-05-27 Supply price per kWhThe first chart shows the per-kilowatt hour price of generated electricity – what is identified on your bill as the supply charge. It shows that since 2007, the July supply price has dropped. That’s mainly because of declining natural gas prices. This part of the bill is largely unregulated by the state, and rises or falls depending on market prices for electricity.

 

2014-05-27 250kWh delivery

The second chart shows Con Edison’s delivery charge for someone who uses 250 kilowatt hours of electricity in July. That’s about the electric use of someone who lives in a small apartment. A single-family home would use a lot more. I used the 250 kilowatt hour figure because it fits with how the state organizes the data.

The second chart shows that the delivery portion of the bill – Con Edison’s share – has risen steadily since 2004. Con Edison must get permission from the state Public Service Commission when it raises this part of your bill.

2014-05-27 250kWh total billThe third chart puts the numbers together. It shows that despite dropping prices charged by electric generators, the overall bills paid by Con Edison customers for July rose steadily from 2002 to 2011. The decline from 2011 to 2012 looks to be the result of a drop in natural gas prices.

To read more about your electricity costs – whether you get power from Con Edison or some other company – check out my recent article on MarketWatch.com on six things you don’t know about your electric bill.

Posted in Con Ed, electricity | Leave a comment

PSC looking to update regulation of New York energy markets

 

In an order that uses the word “paradigm” in the very first paragraph, New York utility regulators are trying to figure out if they’re taking the right approach to new technology for delivering gas and electricity.

If nothing else, the Public Service Commission’s April 25 order and an attached report by the Commission’s staff shows the state at least recognizes issues faced by consumers:

  • Volatile natural gas prices whacked small businesses and residential utility customers during this year’s unusually cold winter.
  • Deregulation “has led to increased dependency on natural gas” despite its volatile price. Because natural gas is the cheapest fuel for making electricity, the report says, generating plants favor it over other technology, including those more environmentally friendly.
  • Utilities’ biggest customers have lowered their costs under deregulation — but “small-usage customers have not experienced the same value.” That comes across as a wordy way of saying deregulation has not lowered consumer prices.
  • New York is more dependent on electricity than ever, but its infrastructure is aging and needs $30 billion in new investment over the next decade.

Those are the current problems. In coming years, the, uh, “paradigm” by which residential customers use electricity could change a lot.

  • Homeowners might use solar panels to help power their air conditioners on sunny, hot days — and maybe send the excess power into the electric grid.
  • Time-of-use plans could compel people to charge their electric cars overnight, when rates are cheapest. They might also charge home electric storage systems overnight — giant batteries that would let them store electricity until they need it.
  • Automated devices could also help people manage their energy use — say, by adjusting thermostats as the time-of-use price of electricity rises or falls.

People who run big buildings employ elaborate strategies to manage their energy use. Most residential utility customers do not. But the costs of energy-efficient technology are declining, the commission says, so it’ll make more sense for people to use such technology at home.

The commission is trying to figure out how to encourage new thinking about energy use, and what it’ll mean to utilities like Con Edison. The commission envisions that it’ll be up to Con Ed, National Grid and other wire-and-transmission utilities to figure out how the new technology will work. It plans to study the problem over the next year or so.

Critics of this plan say the commission is white-washing the fact that deregulation has raised prices for residential consumers [see the bottom part of this Albany Times Union story].

Here’s Gov. Cuomo’s news release announcing the PSC’s initiative.

Update, May 5: Here’s an interesting New York Times story on how some people view the state’s initiative.

Posted in Deregulation, Public Service Commission | Leave a comment

Feds investigating New York’s winter electricity price surge

 

Investigators from the Federal Energy Regulatory Commission are looking into New York’s winter electricity price surge, Sen. Charles Schumer said today as he urged another agency, the Federal Trade Commission, to also start a probe.

Schumer said he wasn’t sure of the nature of the FERC investigation. “They don’t say much other than that they are looking,” the senator said at a news conference.

“They obviously smell something going on. Who knows what?” he added.

In the utility world, asking for a FERC investigation is the equivalent of calling the cops to report a possible crime. Nobody is really sure that anything illegal or untoward happened in the energy markets over the winter, but people in the utility business want FERC to make sure.

When prices surged in February, state Public Service Commission chairwoman Audrey Zibelman wrote to FERC asking for a probe of high natural gas prices. In New York, most electricity is generated with natural gas, so the price of natural gas is an important factor in residential electric bills.

Zibelman’s letter specifically suggested FERC compare what gas pipeline owners had contracted to deliver to their customers with the amount of gas they actually delivered. Such a comparison “would indicate whether any market power concerns exist,” she wrote. In plainer English, Zibelman was worried about the possibility someone was manipulating gas prices.

The New York Independent System Operator — which operates the power grid — asked for a FERC investigation of natural gas prices on the same day as Zibelman.

Schumer says the electric price increases have outpaced natural gas prices. He also noted that though electricity prices rose quickly, they are not falling as fast as they should now that the gas shortage is over. “We are asking that the FTC look at the second half of the chain, from the supplier to the consumer,” he said.

A news release from Schumer’s office says the FTC should be involved because “there are multiple ways utilities or natural gas providers could artificially inflate electric bills, including withholding natural gas from the market or overcharging ratepayers.”

There was no shortage of natural gas last winter — but there is a shortage of pipelines delivering gas to the northeast US. Because there was no way to get enough gas to market, prices rose. But the impact across New York seemed to vary by geography and by utility company.

Con Edison’s rates spiked by 20 to 25 percent, Schumer reported last month. Con Edison customers actually caught a break compared to customers of utility companies elsewhere, Schumer’s data shows: PSEG customers on Long Island saw their bills rise by 25 percent, and Central Hudson customers saw their bills rise by 35 percent. National Grid’s upstate electric customers got walloped, with increases of 60 to 75 percent.

Schumer’s numbers seem very rough — and they don’t show whether people who buy electricity from energy service companies rather than through utility companies’ default plans have paid more or less.

I’ll post a link to the news release about Schumer’s request as soon as it’s available.

Whether or not there was any price collusion, the shortage of natural gas pipelines remains a problem and could cause another power price surge next year. My earlier posts on this topic are here and here.

Don’t be quick to blame Con Edison for this problem — it passes on electricity generating costs to customers on its default plan without markup. Here’s a statement Con Ed issued about Schumer’s news conference:

We support the Senator’s efforts to examine this past winter’s high energy prices.  We and other utilities had asked the Federal Energy Regulatory Commission look into market performance, particularly as natural gas pricing impacts electricity costs, and there is an ongoing FERC proceeding to look into this issue.  The brutal winter’s high energy demands and resulting high costs impacted consumers all across the Northeast this year.

Update, April 17: National Grid’s prices are reportedly easing in the Albany region.

Posted in Con Ed, electricity, Federal Energy Regulatory Commission, natural gas, Public Service Commission | 1 Comment

Price surge over, but New York electric charges will spike again

2014-04-07 graph of Con Ed default kWh supply rate

 

This winter’s punishing power price surge is over, and New York’s electric supply charges headed back to normal in March.

This graph shows the default supply charge paid by a typical Con Edison residential customer for the last six months. Supply charges cover the cost of generating electricity. Note that the per-kilowatt hour supply charge doubled from December to January.

This customer’s last billing period was March 3 to April 1. Billing periods vary from customer to customer. Don’t worry if your charges look different – supply prices change daily, so everyone’s prices even out over time.

The graph does not include the delivery charge, which is what you pay Con Ed to maintain the wires and transformers that bring electricity to your home. The delivery charge is a separate item on your bill. Delivery charges are regulated by the state and don’t change month to month. Supply charges are not regulated.

Blame spiking natural gas prices for the winter electricity price surge. Natural gas sold at premium prices this year because frigid winter weather boosted its use for home heating. The chill extended to electric ratepayers because natural gas fuels most of New York’s electric generators.

The nasty price spike – which brought Con Ed bills to summer levels – will probably happen again next winter, say analysts with investment firm UBS. The problem is that there are not enough pipelines bringing gas to the northeastern market. “[T]here is a clear physical problem that cannot be fundamentally resolved without action to increase capacity on gas pipes,” the UBS analysis says.

Con Edison’s prices this winter were up from 20 to 25 percent, Sen. Charles Schumer said in a news release on April 2. On Long Island, prices charged by PSEG were up about 25 percent. Hardest hit were National Grid electric customers upstate whose bills jumped 60 to 75 percent, Schumer said.

Schumer wants a federal investigation of the price surges. “These bills have gone up so much that we need to take a good, hard look at what is really going on here,” the senator said.

Thinking about switching from the Con Edison default plan to an energy supply company? Be careful – there’s no guarantee you’ll get a better deal.

Update, April 8: The winter price spike is such a hot issue in National Grid’s upstate territory, PSC chairwoman Audrey Zibelman discussed it with an Albany TV station.

Posted in Con Ed, electricity, energy service companies | Leave a comment