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.

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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