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.

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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