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.

About Bill Sanderson

I'm a New York-based journalist, and a former reporter at the Concord Monitor in New Hampshire, the Bergen Record in New Jersey, and the New York Post. My work has appeared in The Wall Street Journal, MarketWatch.com and Politico New York. Twitter: @wpsanderson.
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